On October 23, the Employment Security Department (ESD) announced that premiums for the Paid Family and Medical Leave (PMFL) program will rise from 0.74% to 0.92% on January 1, 2025. By law, ESD recalculates premium rates each October based on premiums collected and benefits paid over the previous year.

The rate hike was anticipated back in 2023, when new rate calculation procedures went into effect under legislation intended to stabilize the PFML program. The legislation and infusion of state general funds prompted lower rates in 2024, but it was expected that higher rates would be necessary in 2025 to keep up with program expenditures.

Employers will be responsible for 28.48% of the total premium, with employees picking up the remaining 71.52%. This is close the same employer/employee split that we saw in 2024. As a reminder, employer premiums only go towards funding medical leave benefits, while employee premiums go towards both medical leave and family leave. Only employers that have 50 or more employees are required to pay employer premiums.

According to ESD, continued increases in total benefits payments are due to continued growth in the program, rising employment following the pandemic making more people eligible for benefits, and sunsetting a provision of the PFML law which did not apply PFML to employees under certain collective bargaining agreements.