News & Thought Leadership from Sulloway & Hollis

September 16, 2022

New Hampshire’s New Paid Family and Medical Leave Program

Paid family leave is an increasingly desirable workplace benefit. In today’s competitive hiring environment, businesses that enable employees to take paid leave to help with critical family situations have the edge over those that do not.

The State of New Hampshire’s voluntary, state-sponsored Paid Family and Medical Leave program (“PFML”) is the first of its kind in the United States. The Granite State plan was signed into law in June 2021, enrollment begins in December 2022, and the program goes into effect on January 1, 2023.

The State will provide paid family leave benefits to its roughly 11,000 employees via an insurance plan with MetLife. In a unique twist, private sector employers can voluntarily opt-in to the Granite State plan. The PFML provides up to 60% wage replacement (up to the security wage cap) for covered workers for up to 6 weeks per year. Employers can negotiate coverage terms and premium costs with Metlife, but workers may enroll as individuals if their company does not enroll.

The State’s plan may be an option for employers that do not currently offer employees a paid family leave benefit. An added incentive for employers to purchase coverage is a business enterprise tax deduction for up to 50% of the premium paid. To claim the tax credit, employers must submit their most recent Schedule of Business Profits Tax Credit.

For private employers, the plan is voluntary and works like a typical insurance plan. If employers opt-in to the program, they will have three options to fund the premium costs. They can fully fund the plan on behalf of the employee, split the premium cost, or pass the full cost on to the employee.

As an employer, you may be subject to certain obligations. For example, employers with 50 or more workers enrolled in the plan pay the PFML premiums through payroll deduction, whereas those who do not provide PFML (or equivalent) coverage must collect premium payments through payroll deduction for individual workers enrolled in the PFML. On the other hand, small businesses arrange to pay directly with the insurance carrier, MetLife.

Throughout the rest of this month, the New Hampshire PFML site has introductory webinars available to employers interested in learning more. The Employment Law team at Sulloway & Hollis will continue to monitor developments in the New Hampshire PFML as the enrollment period grows closer and the plan goes into effect.