Virginia Enacts Paid Family and Medical Leave Program to Apply to Most Private Employers

Virginia has enacted legislation (House Bill 1207/Senate Bill 2) establishing a state-administered paid family and medical leave insurance program, which will provide individuals with paid leave benefits in various circumstances including those covered under the federal Family and Medical Leave Act (FMLA) as well as others. For Virginia employers that have been required to comply with federal law only when it comes to leaves of absence, this marks a significant change.

The Virginia Employment Commission (VEC) will establish and administer the paid family and medical leave insurance program to begin providing benefits to covered employees by December 1, 2028, with employers and employees paying into the program beginning April 1, 2028.

Program Establishment and Contributions

By January 1, 2028, the VEC must establish a paid family and medical leave insurance program. Employers and employees will begin payroll contributions by April 1, 2028. By December 1, 2028, the VEC will begin receiving claims and paying benefits to covered individuals. The VEC Commissioner is tasked with adopting the regulations needed for the processing of claims. 

Benefits will be paid from a Family and Medical Leave Insurance Trust Fund, which will also fund the administration of the program and “start-up costs” associated with the program. Employers and employees will make payroll contributions to the Fund to finance the payment of benefits and administration of the program, as described below. 

No later than October 1, 2027, and annually thereafter, the Commissioner must establish the contribution rate for the coming year, taking into account repayment requirements (discussed below). The contribution rates for calendar years 2028 and 2029 shall be established based on sound actuarial principles. From calendar year 2030 forward, the Commissioner will certify and publish:

• The total amounts of the previous fiscal year’s expenditures for paid benefits and program administration;
• The total amount remaining in the Fund at the close of the fiscal year; and
• The amount by which the contribution rate will be adjusted to ensure the projected balance of the Fund does not fall below 40% of total program expenditures. 

Employers with more than 10 employees will be required to deduct up to 50% of the required contribution from employee wages, or may choose to pay a larger share. Employers with 10 or fewer employees will be required to deduct 50% of the required contribution from employee wages, and will not be required to make additional employer contributions. Deductions may not reduce an employee’s compensation below minimum wage.

Employers may seek the VEC’s approval to meet their statutory obligations using a private plan, as long as the plan meets the specific requirements enumerated in the statute. Employers with approved private plans must still reapply to the Commission to renew approval of their private plans every two years.

The statute empowers the Commission to take enforcement action against employers, including filing civil actions, for unpaid contributions at an interest rate of 1.5% per month from the date payment is due. 

Benefits Eligibility

Beginning December 1, 2028, individuals will be eligible to receive family and medical leave benefits from the Fund for the following reasons:

• To care for a new child during the first year after birth, adoption, or placement through foster care;
• To care for a family member with a serious health condition;
• For an individual’s own serious health condition that makes the individual unable to perform the functions of their position of employment;
• To care for a covered service member who is the covered individual’s next of kin or other family member;
• Qualifying exigency leave arising out of a family member of the covered individual on active duty, or an impending call or order to active duty, in the Armed Forces; or
• To seek safety services for a covered individual or family member related to domestic violence, sexual assault or stalking. 

Individuals claiming benefits from the Fund are required to provide certain documentation and information to the Fund concerning the reason(s) they are seeking benefits. Individuals may take continuous, intermittent, or reduced schedule leave, and are required to make a “reasonable effort” to schedule family and medical leave such as not to unduly disrupt the operations of their employer. Individuals are required to provide their employer with prior notice that they will be taking leave, to the extent practicable. Employers may not use paid family leave taken on a reduced schedule basis to reduce the total amount of leave an employee is entitled to beyond the amount of leave actually taken.

Fraudulent attempts to obtain family and medical leave benefits are subject to criminal penalties.

Duration and Amount of Benefits

Individuals may receive up to 12 weeks of benefits per benefit year (except that leave to seek safety services is limited to four weeks). The amount of benefits is calculated as 80% of an individual’s average weekly wages during the first four of the last five completed calendar quarters or, if they have worked less than five calendar quarters, 80% of their average weekly wages during the quarters in which they worked, subject to a statutory maximum of 100% of the state average weekly net earnings, which the Commission will adjust by September 30 of each year to apply beginning on January 1 of the following calendar year. The minimum weekly benefit shall not be less than $100 per week unless the covered individual’s average weekly wage is less than $100 per week.

Leave under the statute that also meets eligibility requirements under the FMLA shall run concurrently with FMLA leave.

Notice Requirements

Employers will be required to provide written notice of this statute to employees upon hire and annually thereafter, as well as when an employee requests leave pursuant to the statute or when the employer “acquires knowledge” that an employee’s intent to take leave may meet the eligibility requirements of the statute. The notice is specifically required to include (1) the terms under which employees may use benefits; (2) the amount of benefits available; (3) the procedure for filing a claim for benefits; (4) a statement of the right to job protection and benefits continuation; (5) a statement that discrimination and retaliatory personnel actions are prohibited; and (6) a statement that the employee has a right to file a complaint for a violation of the statute. 

The statute also includes a posting requirement including in English, Spanish, and any language that is the first language spoken by at least 5% of the employer’s workforce.

Employment Protections

Employers are prohibited from retaliating against any employee or otherwise discriminating against an employee who requests, files for, applies for, or uses benefits under the statute; communicates an intention to file a claim or complaint with the VEC or a court; or testifies in or intends to testify in, or otherwise assists in an investigation, hearing or proceeding under the statute. 

Further, an employer’s absence control policy may not count paid family and medical leave under the statute as an absence that may result in any adverse action. Employers that use attendance points or similar systems should plan to update those policies as appropriate.

An employee returning from family and medical leave, who worked for the employer for at least 120 days prior to the commencement of leave, is entitled to be restored to the same position as when leave commenced or to a position with equivalent seniority, status, employment benefits, pay, and other terms and conditions of employment to which they were entitled when the leave commenced. 

Employers are also required to maintain a covered individual’s healthcare benefits while on leave as if the individual had worked continuously during the leave period. The covered individual is still required to pay their share of the cost of health care benefits.

Employees have a private right of action under this statute. An individual who brings a claim against an employer for violating the statute may seek damages including: (1) wages, salary, employment benefits, or other compensation denied or lost due to the violation; (2) if none, then any actual monetary losses sustained by the individual due to the violation such as the cost of providing care up to a sum equal to 12 weeks of wages or salary for the covered individual; (3) interest calculated at the legal rate for lost pay, benefits, or other compensation; (4) liquidated damages equal to the amount of lost pay, benefits, and other compensation and interest unless the employer can establish it had reasonable grounds to believe it was not violating the statute; (5) attorneys’ fees and costs; and (6) equitable relief.

Employees may file suit within one year after the last event constituting the alleged violation or up to three years in the case of a willful violation. 

The Commissioner of Labor and Industry or, upon referral, the state attorney general, are also empowered to investigate alleged violations and institute administrative or court proceedings.

What Can Employers Do Now?

Employers should update their leave and attendance policies and begin preparing their notices to comply with this new Virginia requirement. Employers that already maintain paid leave programs related to family and medical leave should consider whether those programs will satisfy the Virginia statute.