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Funding Mechanisms for State Paid Family and Medical Leave Programs

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Statewide paid family and medical leave (PFML) programs are designed to be self-sustaining, funded through small payroll contributions from workers, employers, or both. Although states may allocate general revenue to cover initial start-up costs, these programs are built to operate without ongoing state funding.

How a state finances its PFML program plays a critical role in its overall success. Policymakers considering the implementation of a new program can benefit from examining how other states have financed their existing programs.

This policy brief outlines the key financing decisions that states must make to ensure the long-term viability of their PFML programs. Topics include whether to provide start-up funding, who should contribute to premiums and to what extent, how premium rates should be determined, and which wages should be subject to the premium.

©January 2025, Prenatal-to-3 Policy Impact Center, All Rights Reserved. The Prenatal-to-3 Policy Impact Center at Peabody College of Education and Human Development, Vanderbilt University translates research on the best public investments into state policy actions that produce results for young children and society.

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The Prenatal-to-3 Policy Landscape in 2026

This blog post outlines the state policy changes in effect since the release of our 2025 Roadmap, providing timely and up-to-date context for consideration as policy discussions continue in 2026.
This blog post outlines the state policy changes in effect since the release of our 2025 Roadmap, providing timely and up-to-date context for consideration as policy discussions continue in 2026.
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New Reports Illustrate Historical Patterns of Inequity in Policy Design and Their Impact Across Generations

Tracing policy decisions from early America to today, the reports reveal how long-standing choices continue to shape access and outcomes for families  Press Contact: Sydne Lewis, 615-343-9946, sydne.lewis@vanderbilt.edu The Prenatal-to-3 Policy Impact Center at Vanderbilt
Dr. Cynthia Osborne, professor of early childhood education and policy at Vanderbilt University’s Peabody College of Education and Human Development, and executive director of the Prenatal-to-3 Policy Impact Center

Prenatal-to-3 Policy Impact Center Executive Director Cynthia Osborne elected president-elect of APPAM

Osborne will lead the nation’s premier public policy research association, shaping its 2026 Fall Research Conference and advancing excellence in policy analysis and management Press Contact: Sydne Lewis, 615-343-9946, sydne.lewis@vanderbilt.edu Dr. Cynthia Osborne, professor of early