Two Important Changes Impacting Your Business

Vermont Childcare Contribution

During the 2023 Legislative Session, Act 76 became law. The Act addressed the availability and affordability of childcare statewide, which impacts businesses, who have seen parents leave the workforce or struggle to meet scheduling demands and have struggled to recruit new staff. The Act invests $130 million in Vermont’s childcare system. The investments will support stability for childcare programs, affordability for families, and create more childcare slots around the state, providing much-needed relief for families and employers.

Funding will come from the taxpayer supported state general fund ($50 million) and a new payroll tax. The payroll tax will be 0.44%, with 0.33% paid by employers and 0.11% paid by employees. Self-employed individuals will pay only the employee share of 0.11%. Collection of the Childcare Contribution will start on July 1, 2024.

Download a guide from the Vermont Department of Taxes on the Vermont Childcare Contribution here.

For more details from the Vermont Department of Taxes on the Vermont Childcare Contribution, click here.

As with any tax related issue, consult with your tax accountant or CPA.

Family & Medical Leave Insurance

The State of Vermont and The Hartford, a leading provider of employee benefits and leave management, will begin offering the Vermont Family and Medical Leave Insurance (FMLI) program for employers on February 15. Employers with two or more employees will have the opportunity to design a plan to fit the needs of their employees and business, with benefits beginning on July 1.

The FMLI benefits provide partial income replacement for workers who need to take care of a family member with a serious health condition, bond with a new child, tend to their own serious health condition, care for a military service member’s serious injury or illness, or address certain needs related to a family member’s covered active military duty or call to active duty.

The FMLI plans are flexible, which allow employers who opt in to design a plan that best meets the needs of their business and employees. Some key features include:

• Option to provide family and medical leave combined or stand-alone family leave insurance; 
• Contributions can be fully paid by the employer, split between the employer and employees, or fully paid for by the employees as a voluntary benefit;
• Benefit duration options of six to 26 weeks per 12-month period; and
• Sixty to 70% wage replacement, with additional options available with underwriting review.

The first phase of the program was implemented for Vermont State employees in July 2023. In 2024, private and non-State public employers with two or more employees will have the ability to select from a number of plan design options that allow them to best support the needs of their employees and their business. Beginning in 2025, individuals who work for Vermont employers that do not offer VT-FMLI, self-employed Vermonters, and employers with one employee can purchase coverage through the VT-FMLI individual purchasing pool, which will be insured by The Hartford.

Employers in Vermont can work with their employee benefit brokers to learn more about the Vermont FMLI program or visit https://fmli.thehartford.com.