Paid leave is a social insurance program much like Social Security. All workers pay a small amount in, and in return, everyone has access to paid leave when they need it. This ensures that:
Workers who most urgently need paid time off are actually covered.
Contributions are shared across all workers, keeping costs predictable, fair, and low for everyone.
Funding the Program
Most successful paid leave programs are funded through a small payroll deduction. This works well because:
Payments are based on a worker's wages, so everyone contributes in proportion to what the program will pay out.
The program’s funding automatically grows in step with the economy.
The deduction can be handled in different ways:
Paid by workers only
Paid by employers only
Split between workers and employers
The example above is based on a 2023 paid family and medical leave bill passed by the Vermont House. While future programs may look different, it shows how paid leave can give strong coverage for workers across the state.