Paid Family and Medical Leave Premium Increase

Beginning Jan. 1, 2023, the Paid Family Medical Leave (PFML) premium rate will increase to .8%, with employers with more than 50 employees paying for 27.24% of the premium and employees paying 72.76%. By law, the Employment Security Department (ESD) recalculates the PFML premium rate each September based on contributions from premiums and benefits paid during the previous year.

What Does This Mean for Employers?

Employers will need to withhold at the new PFML premium rate starting Jan. 1, 2023, and first quarter premiums and reports under the new rate are due by the end of April 2023. Businesses with fewer than 50 employees are not required to pay the employer premium; however, they must still collect the employee portion or pay the employee premium on behalf of their workers. Additionally, employers will still report total gross wages for each employee, excluding tips, and collect PFML premiums up to the Social Security cap. After the cap, which will be $160,200 in 2023, wages must still be reported but premiums can no longer be collected. Employers should notify workers that the PMFL premium will increase on Jan. 1, and plan to collect the new rate from employees each pay period as PMFL premiums cannot be retroactively withheld.

For employers using a voluntary plan for family or medical leave, the premium rate calculations may be different. ESD maintains a voluntary plans page, which offers guidance and more information on PFML compliance for businesses offering PFML through a voluntary plan.

Next Steps

In November, ESD will begin sending reminder letters to employers regarding this upcoming change. More information including resources such as a premium calculator, can be found on the ESD PFML website. ESD will be updating the ESD PFML website with additional resources over the next several months.