Employer pick-up contributions
States that require employers to provide Paid Family and Medical Leave insurance fund these programs through premium payments made up by employer and employee contributions. Employee contributions are deducted from their pay, but these programs allow employers to pick up a portion, or all, of their employees' premium payments. This is called an "employer pick-up", and it's considered "additional compensation" by the IRS.
As of January 1st, 2026, when employers "pick up" their employees' premium payment for PFML plans, these pick-up contributions are considered taxable income, and are included in subject wage amounts. OnPay automatically makes this adjustment to employee subject wages when you set an employer pick-up contribution.
States with paid leave requirements
The following states have Paid Family and Medical Leave plan requirements, with an employer pick-up option.
Colorado
The Family and Medical Leave Insurance (FAMLI) program allows Colorado workers to take paid time off for important life events that impact the health and safety of their family, or themselves. This paid leave is jointly-funded by contributions from employer and employee taxes, with some exemptions for the employer portions only.
What you need to know
- All company employees pay into this program through withheld taxes, regardless of company size or headcount
- Employers with fewer than ten employees are exempt from the employer contribution, only
- Employers can choose to cover a portion of employee contributions, up to 100%
Delaware
Delaware Paid Leave provides paid time off (up to 80% of their wages, or $900 per week) to employees who need support during a health or family event, such as:
- Up to twelve weeks per year to care for a new child
- Up to six weeks per two years to address a serious health condition of their own, or of a family member
- Up to six weeks per two years to assist while loved ones are on overseas military deployment
What you need to know
The program is funded by employer-paid premiums of less than 1% of an employee’s weekly salary. Employers can require employees to contribute up to half the cost.
- Employers with 9 or fewer employees are exempt
- Employers with 10 to 24 employees are required to offer coverage for parental leave, but are exempt from offering medical and family leave
- Employers with 25 or more employees must offer full coverage
More about Delaware Paid Leave→
Maine
If you pay employees in Maine, you'll need to remit a premium of 1% of covered employee wages toward Maine's Paid Family and Medical Leave Program. Employers may withhold and deduct up to half of this amount from covered employee wages, or pick up the payment themselves. Small employers may have a reduced premium of 0.5% of covered wages, with the option to withhold and deduct the entire amount from covered employee wages, or pick up the payment themselves.
What you need to know
Employers with 15 or more employees
- Contribute 1% of covered employee wages
- May withhold and deduct up to 50% of this 1% rate contribution from the employee wages
Employers with fewer than 15 employees ("Exempt")
- Contribute 0.5% of covered employee wages
- May withhold and deduct up to 100% of this 0.5% rate from employee wages
You must register for a PFML ID by going to The Maine Paid Leave Contributions Portal. Once you've received your PFML ID, you'll need to enter it into OnPay in order for us to report your contributions to the state. You can also set the percentage of your rate that you wish to withhold and deduct from employee wages (if any), as well as indicate you're an employer of fewer than 15 employees.
Massachusetts
The Massachusetts Paid Family and Medical Leave program is funded by both employer and employee payroll contributions and is intended to provide wage replacement and job protection to employees who need time away from their jobs to tend to family or medical needs. The program is jointly funded by employees and employers, though small employers may not be required to contribute the employer portion of the tax. Employers may also choose to "pick up" the employee portion for some, or all employees.
Contribution rates
- Employers with fewer than 25 covered employees - 0.46%
- Employers with 25 or more covered employees - 0.88%
What you need to know
- This statewide benefit plan requires employers to report employee wages, hours worked, and additional information every quarter.
- Workers can take up to 26 weeks of paid leave for qualifying events.
- Employers must withhold PFML contributions from employees’ paychecks.
- Individual contributions are capped by the Social Security taxable maximum.
- Employers must contribute at least the minimum share of the contribution described below; however, they may choose to cover a larger share of the contribution for some or all of their employees (employer pick-up).
- Employer pick-up amounts are subject to tax, according to the IRS.
- Businesses with fewer than 25 qualified individuals are not required to pay the employer portion of the premium, but are still required to collect and remit the employee portion of the premium and abide by all reporting requirements.
- Your Massachusetts workforce determines your responsibility as an employer for making contributions under the Paid Family and Medical Leave (PFML) law. For the most part, PFML follows the unemployment statute (M.G.L. c. 151A) for determining what qualifies as employment and excluded employment.
More information at Paid Leave Massachusetts→
Minnesota
Paid Leave Minnesota is funded by employer-paid premiums. Rates are based on quarterly wage reports submitted for Unemployment Insurance. Employers may deduct up to 50% of the cost of the Paid Leave premium from employee wages. Additionally, small employers may have their contribution reduced.
What you need to know
- The Employer premium rate is 0.88%
- Employers may deduct an employee portion of up to 50% of Paid Leave premiums from employee paychecks
- Employers may also choose to "pick up" any or all of the employee portion
- Employer pick-up amounts are considered subject to taxation by the IRS
Employers may start deducting Paid Leave premiums from employee paychecks beginning January 1, 2026, when benefits become available. The first premium payments for Paid Leave are due on April 30, 2026. The first premiums will be based on wage details reported between January 1, 2026, and March 31, 2026.
More information at Paid Leave Minnesota→
Oregon
The Oregon Employment Department's Paid Leave Oregon (PLO) program allows workers to take paid time off for important life events that impact the health and safety of their family, or themselves. This paid leave program is jointly-funded using tax contributions from employees and employers. The tax rate is 1% of employee gross wages, with employers paying a rate of .4%, and employees contributing at a rate of .6%. These rates apply for all employers and employees in Oregon, with the following exceptions:
- Employers with fewer than 25 employees are exempt from the employer contribution
- Employers may choose to "pick up" a portion of employee contributions, up to 100%
What you need to know
State plan
- Employers can choose to lessen the tax burden for employees by covering the employee portion of this tax
- Employers can choose how much of the employee portion they want to cover, up to 100%
Learn more about Paid Leave Oregon→
Washington
Washington's statewide Paid Family and Medical Leave insurance program which launched in 2019 is intended to provide wage replacement and job protection to employees who need time away from work to tend to family or medical needs. The program is funded by both employer and employee payroll contributions.
What you need to know
- This statewide insurance plan requires employers to report employee wages, hours worked, and additional information every quarter.
- Premiums are 0.92% of gross wages paid up to the Social Security wage limit of $184,500.
- Workers can take leave for qualified events for up to 12 weeks generally, and up to 18 weeks under exceptional circumstances.
- Businesses with fewer than 50 employees are not required to pay the employer portion of the premium but are required to collect and remit the employee portion of the premium and abide by all reporting requirements.
State resources and support
For more information on the program, please contact the Washington state customer care team:
Email: paidleave@esd.wa.gov
Phone: (833) 717-2273
More information about Washington Paid Family and Medical Leave→
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