Federal Update
Internal Revenue Service (IRS)
Beginning in 2026, businesses can take advantage of a significantly expanded Employer-Provided Child Care Tax Credit (IRC § 45F). These businesses may now claim a 40% tax credit, up to $500,000 annually, for qualified expenses related to child and dependent care. Eligible costs include innovative solutions like the Larkin Family Care Concierge.
This credit is designed to help businesses attract and retain talent while offsetting the cost of providing meaningful, productivity-boosting benefits to working caregivers. Ask your CSM about leveraging the tax credit by adding the Care Concierge, which now includes backup care.
State Updates
California
AB 2499 was signed into law last October by Governor Newsom. The bill made changes to the California Labor Code as it pertains to victims of a crime or abuse. You can read the details from our past newsletter. The law required the California Civil Rights Department (CRD) to develop a model notice that must be provided to employees upon hire, annually, upon request, and to any employee who informs their employer that they or their family member are a victim of violence. The model notice is now available and you can find it here.
Maine
Great news for Maine employees, Earned Paid Leave was recently amended, with changes coming into effect as of September 24, 2025. Accrued and unused hours of earned paid leave from the previous year of employment must now be made available for use by an employee in the year of employment immediately following. Any accrued and unused hours that are carried over to the following year cannot reduce the total amount of hours the employee is entitled to earn, which is up to forty hours or an accrual limit specified in the employer’s policy, if it is a higher amount.
Minnesota
Governor Waltz signed SF 17, and as a result, there will be a couple of changes down the pipeline for both paid sick leave as well as the incoming Minnesota Paid leave program.
Paid Sick Leave
Effective July 1, 2025:
- Previously, employers could require employees to give notice of the need for earned sick and safe time “as soon as practicable” when the need was unforeseeable. However, the notice requirement has been updated to “as reasonably required by the employer”. The notice requirement for foreseeable usage of earned sick and safe time has not changed – employers may require up to 7 days advance notice.
- The law previously allowed employers to require reasonable documentation only when an employee used earned sick and safe time for more than 3 consecutive scheduled workdays. Now, employers can require reasonable documentation if an employee uses earned sick and safe time for more than 2 consecutive scheduled workdays.
- An employer may not require an employee to seek or find a replacement worker to cover the hours the employee uses as earned sick and safe time, nor can they prohibit an employee from voluntarily seeking or trading shifts with a replacement worker.
Further on the topic of sick leave, this update is effective January 1, 2026: Employers can advance earned sick and safe time to an employee based on the hours the employee is anticipated to work for the remaining accrual year. If the amount advanced is less than what the employee would have accrued based on actual hours worked, the employer must make up the difference by providing additional earned sick and safe time.
Lastly, regarding Minnesota Paid Leave, the amendments confirm that adjustments to the following calendar years premium rates for the program will be confirmed by July 31, 2026 and July 31 of each subsequent year. As a reminder, the program’s total premium rate for 2026 is currently set at 0.88% (0.61% for medical, and 0.27% for family). For further information on this upcoming law, we recommend you see the Minnesota page on our Compliance Center.
Missouri
Well, it’s official – Governor Kehoe has repealed paid sick leave in Missouri, a change which will go into effect as of August 28, 2025. In response to this, a proposed ballot initiative has been submitted to the secretary of state to reinstate the repealed provisions, so we’ll see if the state gets a second chance at paid sick leave. Employees will have until August 28 to utilize any paid sick leave they have accrued, or will accrue, until paid sick leave is officially repealed.
Puerto Rico
Governor Jenniffer González Colón recently signed Act 29-2025, amending protections for nursing employees and amending existing law Act 427-2000, known as the Act to Regulate the Period of Breastfeeding or Expressing Breast Milk. These changes go into force immediately.
An employee cannot be discriminated or retaliated against based on their request or use of lactation breaks. Employers cannot take harmful actions against employees such as, but not limited to, reductions in working hours, reclassification of positions, changes of shifts or replacement of the time used in the period of breastfeeding or pumping. Performance reviews must be conducted objectively, and unfavorable reviews cannot be based on an employee’s use of lactation breaks. Further, an employee’s use of such breaks cannot be used when determining raises, promotions, or bonuses, nor disciplinary measures such as warnings, suspensions, or dismissals. Employers cannot interfere with an employee’s right to take lactation breaks, and such breaks must be provided during working hours.
Rhode Island
The end of the legislative session resulted in more changes for the Ocean State. Thanks to HB 6065 and SB 829, employees will now be able to file for temporary disability insurance (TDI) or temporary caregiver insurance (TCI) benefits to participate as a bone marrow transplant donor or a living organ donor, effective January 1, 2026. Employees may claim benefits for time needed for any procedures, medical tests, and surgeries related to the donation, including no more than five business days of recovery from a bone marrow transplant or no more than thirty business days recovery from a living organ donor transplant. Employees cannot file for both TCI and TDI benefits for the same purpose.
HB 6066 and SB 974 will increase the taxable wage base needed to qualify for the maximum weekly benefit amount and the maximum duration for TDI and TCI claims from $38,000 to $100,000. This change is effective January 1, 2026. Further, as of January 1, 2027, the benefit rate payable to an eligible individual will increase from 4.62% to 5.38% of the wages paid to the individual in the calendar quarter (within their base period) with the highest wages. In 2028, the benefit rate payable will increase again to 5.77%.
Additionally, both HB 6066 and SB 974 add “sibling” as a new family member for whom employees may provide care and claim TCI benefits. Sibling means children with a common parent, including biological siblings, half-siblings, step-siblings, foster siblings, and adopted siblings. This change also goes into effect as of January 1, 2026.
Lastly, the state’s Fair Employment Practices law has been amended per HB 6161 and SB 361. In addition to requiring reasonable accommodation of pregnancy-related conditions including childbirth, lactation, and breastfeeding, employers will also need to reasonably accommodate an employee’s or prospective employee’s menopause-related medical condition(s). The Rhode Island Commission for Human Rights has released a model version of the required notice which must be conspicuously posted at an employer’s place of business in an area accessible to employees and given to new hires and within ten days to any employee who notifies the employer of her menopause.
Washington
Violence Leave
While the state currently has an existing leave law for domestic violence, sexual violence, and stalking, effective January 1, 2026, the law will now include employees who are a victim of a hate crime or require leave for an family member who is a victim of a hate crime. In the approved amendments, a hate crime is defined as the commission, attempted commission, or alleged commission of assaulting another person; causing physical damage to or destruction of property; or threatening a specific person or group of persons and placing them in reasonable fear of harm to person or property. The definition of hate crime includes, but is not limited to, offenses committed through online or internet-based communication. The full text of the bill can be found here.
Also, as a reminder, the state’s required paid sick leave law covers reasons for absences that qualify under the domestic violence leave law. This means that because the domestic violence leave law is being expanded to include victims of a hate crime, so too will paid sick leave. Both of these laws apply to employers with at least one employee in the state, so be sure to review and revisit your policies and handbooks to ensure you are compliant with these changes coming in the new year.
Pregnancy and Lactation Accommodations
The Washington Healthy Starts Act will undergo several amendments with the passing of SB 5217, effective January 1, 2027. The Healthy Starts Act will be added under Washington’s Law Against Discrimination and will now apply to employers with at least one employee in the state.
Covered employers must provide reasonable accommodation to pregnant employees, such as the following specified within the Act:
- Providing more frequent, longer, or flexible restroom breaks;
- Modifying a no food or drink policy;
- Job restructuring, part-time or modified work schedules, reassignment to a vacant position, or acquiring or modifying equipment, devices, or an employee’s work station;
- Providing seating or allowing the employee to sit more frequently if the employee’s job requires the employee to stand;
- Providing for a temporary transfer to a less strenuous or less hazardous position;
- Providing assistance with manual labor and limits on lifting;
- Scheduling flexibility for prenatal and postpartum visits;
- Providing reasonable break time for an employee to express breast milk for two years after the child’s birth each time the employee has a need to express milk and providing a private location, other than a bathroom, if such a location exists at the place of business or worksite, which may be used by the employee to express breast milk. If the business location does not have a space for the employee to express milk, the employer shall work with the employee to identify a convenient location and work schedule to accommodate their needs; and
- Any further pregnancy accommodation an employee may request, and to which an employer must give reasonable consideration in consultation with information provided on pregnancy accommodation by the department or the attending health care provider of the employee.
Additionally, it will be considered an unfair practice for any employer to fail or refuse to reasonably accommodate an employee for pregnancy, barring undue hardship; to take adverse action against those requesting, declining, or using an accommodation related to this Act; deny employment opportunities to an otherwise qualified employee based on accommodation needs under the Act; or require an employee to take a leave of absence when another reasonable accommodation can be provided.
Employers are not required to create additional employment, discharge any employee, transfer any employee with more seniority, or promote any employee who is not qualified to perform the job, unless the employer would do so for other classes of employees who require accommodation. Break time or time traveling to a location to express milk must be paid at the employee’s regular compensation rate and be provided in addition to regular meal and rest periods. Employees cannot be required to use paid leave during breaks or travel time to express milk during work.
Canada Update
Quebec
A recently announced regulation would change the contribution rates for the Quebec Parental Insurance Plan (QPIP), effective January 1, 2026. If approved, the premium rates for the plan would be 0.455% for employees, and 0.636% for employers. This is a decrease from 2024-2025’s rates of 0.692% for employers and 0.494% for employees.
The regulation may be approved by the Government, with or without amendment, after 45 days from the date the regulation was issued (which was June 18, 2025). We will keep an eye on further updates and let you know if it does come to be in effect.
