In the ever-evolving landscape of workplace regulations, it's crucial to stay abreast of the changes that may impact your business. In this blog post, we bring your attention to an important update from Employment Security Department.

Changes to 2024 Paid Family & Medical Leave Premiums

Overview of Changes:

Starting January 1, 2024, the total premium rate for the Paid Leave Program is set to decrease to 0.74%. Employers will contribute 28.57%, while employees will contribute 71.43%. Businesses with fewer than 50 employees in the 2024 calendar year are exempt from paying the employer portion. However, they must collect the employee premium or cover it on their behalf.

Next Steps for Employers:

1. Notify Your Employees: Inform your employees about the new rate, effective January 1, 2024.

2. Utilize Updated Resources: Take advantage of the updated employer toolkit, mandatory poster, and paycheck insert available in the Paid Leave Help Center.

3. Start Collecting New Premium Rate: Commence collecting the new premium rate from your employees' total gross wages each pay period, excluding tips, from January 1, 2024.

4. Manage Social Security Cap: Cease collecting premiums from an employee once they reach the Social Security cap, set to increase to $168,600 for the 2024 calendar year.

5. Submit First-Quarter Premiums: Ensure timely submission of first-quarter premiums, using the new rate, by the end of April 2024. Remember that retroactive withholding of premiums from employees is not permissible.

Paid Leave Calculates Business Size Annually on Sept. 30

For the calendar year 2024, businesses are subjected to a meticulous evaluation process. Paid Leave determines business size by averaging the number of employees across reports for quarters three and four of 2022 and quarters one and two of 2023. If your business size experienced any changes, you were promptly notified through a letter mailed in early October.

Implications Based on Business Size Calculation:

1. 50 or More Employees:

   • If Paid Leave calculates that your business has 50 or more employees, certain responsibilities follow.

   • You will be required to pay the full premium rate, encompassing the employer share of premiums, on wages paid from January 1 to December 31, 2024.

2. Fewer Than 50 Employees:

   • In contrast, if your business size is determined to be fewer than 50 employees:

     • Beginning January 1, 2024, you are relieved from the obligation of paying the employer share of premiums.

     • There is an option to voluntarily contribute the full premium rate to the program by opting in on an annual basis.

     • The enrollment period for calendar year 2024 remains open until March 1.

Opting In for Small Businesses: For businesses falling under the category of fewer than 50 employees, the opportunity to contribute to the program voluntarily is presented through an opting-in mechanism. This allows you to support the Paid Leave Program by choosing to pay the full premium rate.

For more detailed information about opting in, we encourage you to visit the Paid Leave for Small Businesses.

To learn more please click here.