Canada (EN)
The U.S. government amended its Paid Family and Medical Leave (PFML) law to expand how much employers may deduct from employee wages to cover PFML premiums. These changes were enacted through House Bill 2345 and take effect June 11, 2026.
Summary of key changes:
- Medical leave premium withholding expanded
Employers may now deduct 100% of medical leave premiums from employee wages. Previously, deductions were capped at 45%, with employers responsible for the remainder. - Revised family leave premium calculation
The maximum family leave premium that may be withheld is calculated by taking the full family leave premium adding 45% of the medical leave premium, and subtracting the full medical leave premium. - No change to overall PFML premium rate
As of January 1, 2026, the total PFML premium rate remains 1.13% of gross wages (excluding tips) up to the Social Security wage cap.
Employer action steps:
- Review PFML payroll deduction practices to confirm compliance with the revised medical and family leave premium rules.
- Coordinate with payroll vendors and internal HR and legal teams to ensure updated withholding calculations are applied correctly.
- Communicate any changes in employee deductions, as appropriate, ahead of the June 11, 2026 effective date.
How Alight supports employers navigating the PFML law
Alight Leave Solutions will incorporate and implement the required changes where they affect Alight’s leave administration services. This includes updates on paid and unpaid family and medical leave offerings, as well as training our internal teams on the changes.
Disclaimer
This material is provided for general information purposes only and does not constitute legal advice. The information contained in this article reflects the legislative, statutory and/or regulatory landscape as of the date of publication. Given the evolving nature of laws, regulations and interpretive and official guidance, portions of this content may no longer be current. Readers should not rely on this content as a substitute for current compliance guidance and should consult the most up-to-date statutes, regulations and guidance, and/or seek legal advice before acting on any information referenced herein.
