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August 5, 2026

New Federal Guidance Expands Employer Incentives for Paid Family Leave

The U.S. Treasury Department announced new guidance Wednesday designed to encourage more employers to offer paid family and medical leave, according to Reuters.

The existing federal tax credit applies when businesses provide workers with at least two weeks of qualifying leave at no less than half their regular wages. Under the expanded guidance, employers may also claim the credit when they pay premiums for insurance policies that cover the cost of those benefits.

The change does not create a national paid-leave requirement, but it could make the benefit more affordable for employers and broaden access for workers who need time away to care for a new child, a sick relative or their own health.

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