The Virginia Chamber of Commerce is pleased to submit comments in response to the Virginia Employment Commission’s Notice of Intended Regulatory Action regarding the establishment of a paid family and medical leave program as required by Chapters 981 and 1093 of the 2026 Acts of Assembly. As the largest business advocacy organization in the Commonwealth, representing thousands of employers of all sizes and in all industries, the Virginia Chamber has a direct interest in ensuring the rulemaking process results in regulations that are workable, clearly understood, and implemented in a manner that gives employers and employees alike sufficient time and guidance to comply. Recognizing that this regulatory process will be among the most significant ever undertaken in Virginia, the purpose of this comment is to underscore the breadth and technical complexity of the process—technical complexity that is magnified for employers given the passage of separate legislation mandating employer provision of paid sick leave. As this work begins, we also respectfully urge the Commission to ensure the rulemaking process reflects that complexity and to recognize the importance of adequate time, transparency, and stakeholder engagement throughout the regulatory development period.

Chapters 981 and 1093 require the promulgation of rules and regulations governing the program by April 1, 2028, less than two years from enactment. The scope of those rules must be recognized at the outset: the claims filing and processing system, certification standards, employer notification requirements and timelines, contribution rates and actuarial assumptions, private plan approval and certification processes, procedures for self-employed individual election, coordination of intermittent leave, appeals procedures, and enforcement.

Coordination of intermittent leave is critical, as it presents unique operational challenges for employers, especially small and mid-sized businesses. The Commission should provide clear, workable guidance on the administration of intermittent leave and the Virginia Chamber strongly recommends the Commission adopt rules that align intermittent leave standards with those established in federal law under the Family and Medical Leave Act (FMLA), where applicable, to avoid creation of a duplicative or conflicting compliance burden. Virginia employers will require clear definitions of qualifying leave increments, certification requirements, notice obligations, and protections against abuse to effectively manage workforce operations while adhering to the intent of the law. Without such clarity, intermittent leave provisions risk creating significant and unnecessary confusion for Virginia employers. In all areas of the rulemaking, we believe that efforts to reduce this complexity through shortcuts, rather than addressing it fully and directly, are likely to create ambiguities and compliance challenges that introduce uncertainty for both employers and employees.

Stakeholder Engagement

Stakeholder engagement should be emphasized from the outset and should not be limited to formal comment periods. We respectfully request the Commission convene a regulatory advisory panel that reflects the broad diversity of Virginia employers. Such panel should include a representative sample of employers of all sizes across the Commonwealth, including nonprofit organizations and the self-employed, as well as representatives from the insurance industry and legal and human resources professionals. We believe a collaborative approach to the rulemaking process would best ensure the quality and credibility of any regulations to be promulgated.

We would also respectfully request the Commission ensure a formal comment period for proposed regulations of at least 60 days. A 30-day window will be inadequate for evaluating regulations of the anticipated breadth and complexity. A longer window will ensure Virginia employers have sufficient time to consult with counsel, model financial impacts, and prepare comments that are informative to the Commission.

Contribution Rates

Perhaps the most impactful of the regulations to be developed are those concerning the contribution rates for the program. The requirements of Chapters 981 and 1093, particularly those made at the outset regarding initial contribution rates, will directly effect every employer and covered employee in Virginia. Uncertainty is inherent in this process, as Virginia has no direct experience upon which to draw and actuarial assumptions will have to be made.

As such, we respectfully request that the Commission, prior to proposing contribution rate regulations, commission and make publicly available a full actuarial analysis of the program’s projected costs, utilization assumptions, and fund solvency scenarios under a range of possible conditions. Employers will be unable to meaningfully plan or budget unless there is confidence that the underlying assumptions have been independently examined and disclosed. As Virginia will be the 14^th state to establish a program of this type, the experiences of other states should be incorporated into this analysis and made publicly available.

Job Restoration and Tenure Requirements

Chapters 981 and 1093 condition job restoration on an employee having been employed with their employer for at least 120 days prior to the commencement of leave. The application of this rule in practice is heavily dependent on the Commission’s regulations, and there are numerous questions which must be addressed with maximum precision. How is the 120-day period calculated—calendar days, workdays, or hours worked? How are gaps in employment to be treated? How will an employee who transfers between affiliated entities of a larger corporate family be treated? The regulations to be developed on this front must reflect the realities of the modern workforce. The regulations to be developed must address these questions, and others, with precision and specificity; leaving these issues to be addressed on a case-by-case basis through the claims and appeals process only serves to create uncertainty for employers, employees, and the Commission.

Impact on Small Businesses

Although the statute anticipates unique impacts for Virginia’s small employers—limiting the contribution obligation of employers of ten or fewer to the per employee share only—most Virginia businesses exceed that threshold. However, the impact on an employer of ten or fewer is likely to be similar to the impact on employers that would otherwise be considered small businesses. The disruptions experienced by an employer of 9 employees due to extended leave will not be dissimilar from the disruptions experienced by an employer of 11 employees. Indeed, in either example an employee taking 12 weeks of leave represents the loss of about ten percent of the employer’s workforce for a full quarter, in addition to costs that no insurance benefit can offset, such as lost productivity and temporary replacement costs. We respectfully urge the Commission to conduct a rigorous economic analysis of the projected impact of employers of 50 or fewer employees, including estimated contribution costs as a percentage of payroll, projected utilization rates, and the consequences, financially and operationally, of simultaneous or consecutive leave events. Such analysis would benefit both the Commission, by informing regulatory design, and small employers who must plan now for the program’s implementation. We would encourage the Commission to make this analysis as part of the larger process and to make it publicly available for review and comment.

Clarity for Private Plans

Finally, Chapters 981 and 1093 provide that an employer may satisfy its obligations under the statute through a private plan, subject to the approval of the Commission. The Chamber strongly supports robust development of this pathway, as many Virginia employers already provide paid family and medical leave benefits at levels that meet or exceed the statutory minimums. We strongly believe these employers should not face unnecessary barriers to approval and certification by the Commission. We respectfully urge the Commission to develop regulations in this area that are clear, predictable, and which include transparent standards and a streamlined application process with defined timelines for decision by the Commission. Any ambiguity in the private plan option serves only to discourage employers from pursuing it, potentially limiting benefits for Virginia employees to the statutory minimum amount.

The Virginia Chamber of Commerce thanks the Commission for its thoughtful consideration of this comment, and we look forward to continued engagement and active participation with the Commission at every stage of this process.