New Hampshire Governor Chris Sununu vetoed a bill (SB 1) that would have established a paid state family and medical leave program funded by a payroll tax on employees. Sununu called the employee withholding an income tax masquerading as paid family leave program.

Effective January 1, 2020, the bill would have established the Family and Medical Leave Insurance Program (FMLI), funded by an initial 0.5% payroll tax that would have been withheld from employees' wages and remitted quarterly to the New Hampshire Department of Employment Security. Employers could have opted to fund part or all of the premium, rather than withholding from employees' wages. The Department would have had the option of increasing or decreasing the premium rate based on the solvency of the FMLI fund.

Employers having a private family and medical leave plan could have opted out of the program upon application.

Ernst & Young LLP insights

Governor Sununu has instead proposed establishing a voluntary family and medical leave program, the Twin State Voluntary Family and Medical Leave Insurance Plan, in partnership with the state of Vermont. The program would be administered by a third party, most likely an insurance carrier such as Anthem or MetLife, and be funded by insurance premiums.

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