By Vicky Petties, CPP, Checkpoint News
Paid family and medical leave (PFML) remains one of the fastest-moving compliance areas affecting payroll. Although Congress has not enacted a national paid leave program, legislative activity continues at both the federal and state levels, and state programs already in place continue to expand. For payroll professionals, the result is a growing need to monitor new deduction requirements, employer contribution rules and reporting obligations across jurisdictions.
For 2026, the payroll focus is less about whether PFML will continue to grow and more about how quickly payroll systems, processes, and vendor relationships can keep up.
Federal Proposal Remains Pending
At the federal level, lawmakers in September 2025 reintroduced the Family and Medical Insurance Leave Act (FAMILY Act) in both chambers of Congress. The FAMILY Act would create a federally administered PFML insurance program, run through Social Security Administration and backed by a federal trust fund.
The legislation remains pending in committee and faces substantial political obstacles. As a result, payroll departments are not confronting immediate implementation concerns at the federal level. Even so, the proposal remains significant because any future federal PFML framework could require coordination with, or potentially alter, existing state programs. For multistate employers, that possibility warrants continued monitoring.
States Continue to Drive PFML Expansion
In practice, PFML compliance remains primarily a state payroll issue. A growing number of states and the District of Columbia have enacted PFML programs, and several of those programs are entering new phases in 2026.
This state-by-state expansion continues to increase payroll complexity. Program rules differ on contribution rates, taxable wage base limits, employer-size thresholds, funding splits between employees and employers, notice requirements, and the timing of deductions versus benefits.
For payroll professionals, the compliance burden does not begin when employees start taking leave. In many jurisdictions, contribution collection begins well before benefits are payable, meaning payroll systems must be configured in advance of program launch.
As of March 2026, several states and the District of Columbia had enacted PFML programs, including: California, Colorado, Connecticut, Delaware, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New York, Oregon, Rhode Island, and Washington.
See Payroll Guide ¶19,022 for more information on state PFML plans.
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