Paid Family Leave: Which States Have It and What It Costs

The first time I had to answer this properly, I had one employee in Washington and one in a state with no program at all. I assumed their obligations would be similar, but one generated a quarterly filing, a payroll deduction and a mandatory notice, and the other generated nothing. This guide shows, state by state, which position you are in and what it costs.

Paid family leave in the United States is not a national benefit. It is a set of separate state insurance programs, each with its own contribution rate, its own funding split, its own wage replacement formula and its own maximum duration. An employer with people in three states can be running three different systems, and an employer in Texas or Florida can be running none.

For every state that has enacted a program, you will find what it takes out of payroll, who pays it, how much of a wage it replaces and for how long. Then the guide answers the question that applies to more employers than any other: what you owe when your state has no program.

I build leave records and document workflows into FirstHR for businesses without a dedicated HR person. State programs change every year, so treat this as general information rather than legal advice and confirm the current figures for the states you actually employ in.

What These Programs Are

A state paid family leave program is social insurance, not an employer benefit. Employees, employers or both pay a payroll contribution into a state fund, and the state pays a percentage of an employee’s wages while they are out on qualifying leave. The employer does not write the benefit check.

That structure has three consequences for you. Your direct payroll cost is a contribution percentage, not the employee’s salary while they are out. Your administrative cost is registration, withholding, quarterly reporting and employee notices. And during an actual leave, your problem is covering the work, not paying the wages, because the state pays them.

The last figure puts the rest in perspective. Paid family leave was available to 27 percent of private industry workers in March 2023, according to the Bureau of Labor Statistics National Compensation Survey. Most American workers are covered by neither a state program nor an employer policy.

Every State Program in One Table

Here is every state with an enacted mandatory program, with the 2026 contribution rate, who pays it, the wage replacement formula and the maximum duration. Rates and caps are set annually by each state’s program agency, so verify before you build a budget on them.

Three patterns fall out of that table immediately. The first is duration: twelve weeks is the common entitlement for bonding with a new child, with California and Rhode Island as the eight-week outliers. Leave to care for a family member runs shorter, at six weeks, in Delaware and in the District of Columbia from October 1, 2026.

Second, wage replacement is almost always progressive, replacing a high share of low wages and a much lower share above a threshold. Third, every program caps the weekly benefit, which means a senior employee on leave receives a fraction of their normal pay no matter how generous the headline percentage looks. Those caps run from $900 in Delaware to $1,765 in California.

The contribution caps, the wage level above which nothing more is owed, matter as much as the rates. New Jersey applies its 0.23 percent to the first $171,100 of wages and Rhode Island stops at $100,000, while Washington, Oregon, Delaware, Maine and Minnesota all cap at the Social Security taxable wage base, which is $184,500 for 2026 (IRS Topic 751).

California is the exception that trips people up. Since 2024 there is no wage ceiling at all on the State Disability Insurance contribution that funds its paid family leave program, so the 1.3 percent applies to every dollar. On a high-salary payroll that is a real number, even though employees carry it rather than the business.

Who Pays and What It Costs

Funding splits into three models, and which one you are in decides whether a state program is a payroll cost or only a paperwork cost. Five states put the whole contribution on employees, nine share it, and the District of Columbia puts all of it on the employer.

Put actual money against that and the differences get concrete. On a million dollars of covered payroll, the employer share is zero in California, Connecticut, New Jersey, New York and Rhode Island. In Washington it is about $3,200, because the employer pays 28.57 percent of the 1.13 percent premium set by the Employment Security Department.

Oregon and Delaware set the employer minimum at 0.4 percent, about $4,000 on the same payroll. Colorado and Minnesota land around $4,400, Massachusetts around $4,200 on the medical portion, Maine around $5,000, and the District of Columbia at $7,500.

The Massachusetts figure has a short shelf life. The state moves its employer share from the medical to the family portion on January 1, 2027, so from then the employer cost turns on the family rate alone.

All of these figures are ceilings on a simplified payroll rather than forecasts, since wage caps pull the effective rate down wherever salaries run above the contribution base. Still, the spread is the point: the same headcount can cost nothing in one state and several thousand dollars a year in contributions in another.

The contribution sits inside your broader benefits cost per employee rather than alongside it, and it belongs in the same budget line as your other payroll tax obligations. Budget it per state rather than as one company-wide percentage, because the rate and the split both change at the state line.

One more cost hides in plain sight. Every program has a notice requirement, a registration step and a quarterly wage report, and in several states the employer must also tell employees about the deduction before it starts appearing on their pay stub.

Tax Withholding on Contributions and Benefits

FMLA leave is unpaid, so nothing is withheld from it and no tax question attaches to it. Everything taxable in this area belongs to the state programs, and the Internal Revenue Service set out the treatment of both the contributions and the benefits in Revenue Ruling 2025-4, issued January 15, 2025.

Three footnotes belong with that table. First, if you volunteer to cover an employee contribution rather than withholding it, the ruling treats that pick-up as additional compensation, so it becomes W-2 wages for the employee. Second, the Form 1099 threshold moved to $2,000 for payments made from January 1, 2026.

Third, the medical leave row is the unsettled one. Notice 2026-06 extended the transition period on the employer-funded portion through calendar year 2026. That is a window in which the IRS asserts no penalties for withholding and reporting failures, so confirm where it stands before you build a payroll rule on it.

Where Small Employers Get a Break

Most states relieve the smallest businesses of the employer contribution while keeping them inside the program. That is the distinction that matters: the break is almost always on the money, not on the coverage or the paperwork.

Read that table as a warning as much as a relief. In eight of those nine states, a business with one employee is still inside the program: registered, withholding, filing quarterly and posting notices once collection starts. The employee is fully covered and can claim benefits from day one of eligibility. What the exemption removes is a line item, not a system.

Delaware is the genuine outlier. Its smallest employers sit outside the program altogether, and a tier above that owes only the parental leave module rather than the medical and caregiving ones. Growth across those thresholds triggers new duties, which is why headcount changes are worth tracking deliberately rather than noticing at year end.

Colorado makes the same point from the other direction. Its own Family and Medical Leave Insurance (FAMLI) division is explicit that businesses below the threshold pay no employer premium. They must still withhold employee contributions and send them in with wage data every quarter, and their employees keep full access to benefits. That is the shape of nearly every small business exemption in this area.

Enacted but Not Paying Yet

Two states have laws on the books that are not yet moving money. Maryland and Virginia both have statutory dates, and both are far enough out that employers there have real planning time rather than a compliance emergency. Maryland Labor has opened employer registration ahead of its collection date.

Maryland has moved its dates more than once, which is a useful lesson about this whole category. Enacted is not the same as live, and a program can slip by a year while employers are already budgeting for it. Do not withhold anything until the state says to, and do not assume a published date is final until contributions actually start.

Virginia is worth watching for a different reason: it is the first program in the South. It will replace 80 percent of an employee’s average weekly wage, up to a cap set at the statewide average, and only businesses above the smallest tier will pay an employer share. If it holds, the argument that paid leave is a coastal-state phenomenon stops being true.

States With No Program

In most of the country there is no state paid family leave, and an employer there owes unpaid leave at most. Florida, Texas, Illinois, Georgia, Ohio, Pennsylvania, North Carolina, Michigan, Arizona, Tennessee, Indiana, Missouri, Wisconsin and the rest have no mandatory program, no contribution and no state benefit. Short paid sick leave laws aside, none of them requires you to pay an employee during family leave.

The federal layer is the one people misread. The FMLA provides up to 12 weeks of unpaid, job-protected leave in a 12-month period, and the entitlement itself is written into 29 U.S.C. 2612. Those twelve weeks are not a national floor, though, which surprises a lot of owners.

The FMLA covers employers with 50 or more employees in 20 or more workweeks of the current or preceding year. An employee qualifies after a year on the job and 1,250 hours worked in the past year, at a worksite with 50 or more employees within 75 miles. A business below that threshold has no federal leave duty whatsoever.

What the FMLA does require of covered employers is worth stating precisely, because that is where the real cost sits. The job, or an equivalent one, has to be there at the end. Group health coverage continues on the same terms throughout the absence, with the employer still paying its share. And the leave has to be designated properly, on paperwork with fixed deadlines rather than through an informal understanding.

Some states without a paid leave program still have their own unpaid family leave statute with a lower coverage threshold than the federal one, and many have paid sick leave laws that cover short absences but not a twelve-week bonding leave. Those are separate obligations that survive the absence of a paid family leave program, and they catch employers who checked only one box.

Florida, Illinois and the Other Big No-Program States

Florida has no paid family leave program, and state law reaches past mere silence. Section 218.077 of the Florida Statutes bars a city or county from requiring a private employer to provide employment benefits, and the definition there names paid or unpaid days off for holidays, sick leave, vacation and personal necessity. The FMLA is the only floor.

Texas runs the same way: no contribution, no state benefit and no mandatory disability coverage sitting behind a maternity absence. In both states every paid day during a leave comes from a policy you wrote yourself, which is why the design decisions later in this guide carry more weight there than in a program state.

Illinois is the one worth a second look. It runs no family leave program either, but since January 1, 2024 the Paid Leave for All Workers Act has required most employers in the state to let employees earn an hour of paid leave for every 40 hours worked, up to 40 hours a year, usable for any reason without an explanation.

Forty hours is a week, not a bonding leave, so it does not do the job a state program does. It is still paid time a Florida employer does not owe. Chicago and Cook County sit outside the state law and run their own paid leave ordinances, so an employer with staff both inside and outside them works from two rulebooks.

State Disability Is a Different Thing

A short list of states requires temporary disability insurance, which pays an employee during their own non-work medical condition, including recovery from childbirth. It is not family leave. It does nothing for bonding with a healthy baby, nothing for caring for a sick parent and nothing for a partner who did not give birth.

California, New Jersey, New York and Rhode Island run disability coverage alongside their paid family leave programs, so employees there move from one benefit to the other during a pregnancy leave. Hawaii is the only state with mandatory temporary disability coverage and no paid family leave program at all.

Under Hawaii’s rules, the employer must provide the coverage and may deduct up to half the premium cost from employees, subject to a statutory ceiling on the employee share. Benefits run for up to 26 weeks per disability period, according to the state Disability Compensation Division.

For an employer in a state with neither, short-term disability is a voluntary product you can buy rather than a mandate you must satisfy. It is also the cheapest way to make a maternity leave partially paid without committing to full pay for the whole absence, which is why so many small employers reach for it first.

Building a Voluntary Policy

If you are in a no-program state, your policy is the entire benefit, and writing one is a series of five decisions rather than a legal exercise. The federal tax code now rewards the employers who make that choice.

The Section 45S employer credit for paid family and medical leave was made permanent and expanded starting in 2026, and it runs from 12.5 percent to 25 percent of wages paid to a qualifying employee on leave, per Treasury and Internal Revenue Service guidance issued in August 2026.

The tax credit is the part small employers most often miss. If you already pay for leave in a state with no program, you may be leaving a general business credit unclaimed on wages you spend anyway, and that changes the arithmetic of a two-week or four-week policy considerably. That is a conversation for your accountant with your actual numbers in front of them.

Two states offer a middle path. New Hampshire and Vermont run voluntary paid family and medical leave insurance markets rather than mandates, where an employer can buy into a state-arranged plan instead of self-funding a policy or doing nothing. It is a genuinely different model, worth a look if you are in either state and want a paid benefit without designing one from scratch.

Payroll Across Several Programs

Coverage follows where the employee works, not where the company is registered. A remote employee living in Washington creates a Washington obligation for a company headquartered in Texas, and no headquarters policy changes that.

That single rule generates most of the multi-state administration. Each program requires separate registration with its state agency, separate withholding at that state’s rate, separate quarterly wage reporting and its own employee notices in its own timing. The rates change annually and rarely in step, so a January payroll update is not optional.

The way to keep that manageable is one page per state, filled in from the state agency rather than from an article, with the date you verified it written on it. Copy the sheet below once for every state where somebody actually works, and re-verify each one in January when the rates move.

Private plan exemptions are the main tool for simplifying this. Most program states let an employer run an approved private or equivalent plan instead of the state plan, provided the benefits are at least as generous and employees pay no more than they would under the state scheme. One carrier can then consolidate administration across several states, though claims handling moves onto you or your broker.

The rest is record keeping, and it is where small teams lose the most time. Knowing who is on leave, under which program, with what job protection running in parallel, and when they are due back is exactly the sort of thing that decays in a spreadsheet.

Keeping leave and absence records in the same place as employee profiles is the difference between answering a state audit in an hour and reconstructing a year of absences from email. It also survives the departure of whoever set the spreadsheet up.

Where Employers Get This Wrong

Five patterns account for most of the trouble, and the first is the most expensive.

The first is assuming company size exempts you from a state program. It almost never does. Size affects the employer contribution in several states and the entire obligation in essentially one, but employees are covered either way and the withholding duty survives.

The second is treating a state benefit as job protection. In several states the program pays wages without guaranteeing the job, and protection comes from the FMLA or a separate state statute. Assuming the two travel together produces a reinstatement dispute at exactly the wrong moment.

The third is failing to run FMLA leave concurrently, at the same time as the state benefit. If a covered employee draws state benefits during an absence you never designated as FMLA, you may have handed them a fresh twelve-week entitlement afterwards. The designation paperwork is dull and it is the whole defense.

The fourth is missing the employee notice. Every program has a notice requirement: several states want written notice before the first deduction, and most expect a posted notice after that. These are the violations state agencies find first, because they are trivially verifiable.

The fifth is writing a policy that only covers birth mothers. It is the most common drafting error in voluntary policies, and it converts a benefit meant to attract people into a discrimination claim waiting for a father or an adoptive parent to ask the obvious question.

All five are far cheaper to prevent than to unwind, and prevention here is a matter of routine rather than expertise.

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