Virginia Governor Glenn Younkin vetoed S.B. 373, which effective January 1, 2026, would have established a state paid family and medical leave (PFML) insurance program to be administered by the Virginia Employment Commission (VEC). Under the program, the PFML contribution cost, as determined by the VEC, would have been shared equally between employers and employees.

The Senate failed to meet the required two-thirds majority to override the veto.

In his veto statement, Governor Younkin explained that he rejected the proposal because it provided a one-size-fits-all solution for PFML and removed incentives for the private sector to provide these benefits. He also noted many employers already have PFML policies. Additionally, he called the proposal unfair because the PFML requirement would have applied to small businesses and nonprofits but not the Commonwealth of Virginia.

Ernst & Young LLP insights

This is the third time that a governor has vetoed legislation to implement a mandatory state program for PFML. In 2020, Vermont Governor Phill Scott vetoed legislation for a mandatory state PFML program and instead implemented a voluntary program. In 2022, the Maryland legislature overrode former Governor Larry Hogan's veto of SB 275 to establish a mandatory state PFML program. (See Tax Alerts 2022-0686 and 2024-0882.)

Six jurisdictions (California, Hawaii, New Jersey, New York, Puerto Rico and Rhode Island) operate state disability insurance (SDI) programs. Another 16 jurisdictions (California, Connecticut, Colorado, Delaware, District of Columbia, Maine, Maryland, Massachusetts, Minnesota, New Hampshire, New Jersey, New York, Oregon, Rhode Island, Vermont and Washington) now have, or soon will have, PFML insurance programs. See our special report for more information.