The Virginia Manufacturers Association (VMA) appreciates the opportunity to provide comments regarding the Virginia Employment Commission's Notice of Intended Regulatory Action to implement Virginia's Paid Family and Medical Leave (PFML) program.

The VMA represents manufacturers across the Commonwealth, ranging from small family-owned businesses to some of the world's largest industrial employers. Manufacturers operate in highly competitive national and global markets and rely on predictable regulatory frameworks that protect employees while allowing employers to effectively manage complex operations, production schedules, and workforce needs.

Throughout consideration of the underlying legislation, the VMA worked extensively with members of the General Assembly, the Governor's Office, and other stakeholders to improve the legislation's clarity, consistency, and administrative workability. As the Commission develops regulations, we respectfully encourage continued stakeholder engagement to ensure the program is implemented efficiently, transparently, and consistently with legislative intent.

At this early stage of the rulemaking process, the VMA respectfully offers the following recommendations to help ensure the program is implemented in a practical, transparent, and administratively efficient manner.

Private Plan Administration

The legislation appropriately authorizes employers to satisfy their obligations through approved private plans. The regulations should establish an efficient, predictable, and timely approval process with objective standards, reasonable review timelines, streamlined renewal procedures, and practical mechanisms for plan modifications. Employers should have confidence that private plan applications will receive prompt review and consistent administration. The regulations should also establish clear standards for plan amendments, renewals, and transitions between private and state-administered coverage to minimize administrative disruption for employers and employees.

Coordination with Existing Leave and Wage Replacement Programs

Many manufacturers already provide paid leave benefits that exceed statutory minimum requirements. The regulations should clearly explain how employer-provided paid leave, federal Family and Medical Leave Act requirements, disability benefits, workers' compensation, and other leave programs interact with Virginia's PFML program.

The statute permits but does not require coordination of PFML benefits with employer-funded disability coverage. It does not define what it means for benefits to be "coordinated," does not cap combined benefits, or address how employers may administer employer-funded disability or paid leave benefits in conjunction with PFML while complying with the statute's anti-diminishment provision. Without regulatory clarification, employers may be unable to effectively coordinate overlapping wage replacement benefits, resulting in duplicative employer costs and the potential for employees to receive combined wage replacement that exceeds their normal compensation. Clear coordination rules will reduce confusion for both employers and employees, minimize unnecessary administrative burdens and duplicative employer costs, and help preserve employer-sponsored benefits that exceed statutory minimum requirements and support the recruitment and retention of a talented workforce.

The regulations should also provide clear guidance regarding coordination when employees receive wage replacement or leave benefits through other federal or state programs, such as workers' compensation or benefits under the federal Longshore and Harbor Workers' Compensation Act.

Contribution Rate Methodology

Because Virginia is implementing a new program without historical claims experience, the VMA encourages the Commission to make publicly available, to the extent practicable, the actuarial assumptions, utilization projections, and other analyses used to establish contribution rates. Transparency regarding the program's financial assumptions will improve confidence in the rate-setting process, assist employers with long-term budgeting, and allow stakeholders to provide more informed feedback as the program evolves.

Health Insurance Continuation

The regulations should clarify employer and employee responsibilities regarding continuation of employer-sponsored health coverage during leave, including procedures for employee premium payments during periods of leave and appropriate processes when required employee contributions are not timely made. Clear guidance will reduce uncertainty while protecting both employers and employees.

Eligibility, Concurrent Employment, and Benefit Administration

The regulations should provide clear guidance regarding eligibility determinations, calculation of benefit amounts, payroll contributions, and the treatment of individuals with multiple employers or concurrent employment. Many Virginians work for multiple employers simultaneously, and the regulations should clearly explain how wages from multiple employers will be treated for contribution and benefit purposes. Clear standards will promote consistent administration, reduce unnecessary disputes, and help prevent duplicate or improper benefit payments.

Payroll Contributions and Employer Administration

Because payroll systems require significant planning, programming, testing, and implementation, employers and payroll vendors will need clear guidance well in advance of the program's effective date. The regulations should clearly address contribution calculations, payroll withholding procedures, reporting requirements, correction processes, administrative timelines, and technical specifications. If the Commission exercises its statutory authority to establish a minimum claim threshold of less than eight hours of leave in a workweek, the regulations should also clearly explain the circumstances under which a lower threshold would apply to allow employers and payroll vendors sufficient time to make necessary system and administrative updates. Early publication of standardized forms, implementation guidance, and educational resources will further support successful implementation.

The regulations should also clarify employer responsibilities for administering PFML contributions when employees are not receiving regular wages through the employer's payroll system, including periods of workers' compensation, military leave, or other circumstances in which regular payroll withholding may not occur.

Documentation and Certification Standards

The regulations should establish objective documentation requirements sufficient to verify eligibility while protecting employee privacy and minimizing unnecessary administrative burdens. Certification requirements should be clear, standardized, and proportional to the nature of the requested leave. Employers and employees alike benefit from predictable documentation standards that reduce disputes and promote consistent administration. The regulations should also clarify when employers may require a fitness-for-duty certification before an employee returns from leave taken for the employee's own serious health condition, particularly where employees perform safety-sensitive duties. Clear standards will promote workplace safety while protecting employee rights.

Notice Requirements and Employer Communications

The Commission should develop standardized employee notices, model forms, and administrative guidance that employers may voluntarily use to satisfy statutory notice obligations. Providing uniform materials will promote statewide consistency while reducing compliance costs, particularly for small and medium-sized employers. The regulations should clarify the statutory requirement that employees provide notice "as soon as practicable" in situations involving unforeseeable leave. The regulations should also establish clear timelines for Commission notification to employers when a claim is filed and when a determination has been made. Timely notification is essential to allow employers to arrange staffing, coordinate benefits, administer leave, and comply with other legal obligations. Whenever practicable, these notifications should be provided electronically through the Commission's employer portal or similar secure systems.

Fraud Prevention and Program Integrity

Program integrity is essential to maintaining public confidence in Virginia's Paid Family and Medical Leave program. The regulations should establish procedures for verifying eligibility, addressing misrepresentations, recovering improper payments, protecting confidential information, and providing employers with reasonable opportunities to respond when factual disputes arise. The regulations should also establish consequences for individuals who knowingly and intentionally submit fraudulent claims or provide false information to obtain benefits. The Commission should also consider requiring applicants to certify, under penalty of perjury or other appropriate legal attestation, that information submitted in support of benefit claims is complete and accurate. Such certifications are common in public benefit programs and help strengthen program integrity.

To the fullest extent permitted by law, the Commission should establish procedures that allow employers to report suspected fraud and provide relevant information during investigations and appeals. If the Commission determines that additional statutory authority is necessary to strengthen fraud prevention, recover improper payments, or address other program integrity issues, the VMA encourages the Commission to identify those issues and develop recommendations for future legislative consideration.

Due Process and Appeals

The regulations should provide transparent procedures governing determinations, reconsideration, appeals, timelines, evidentiary standards, and opportunities for employers to provide relevant information. Predictable administrative procedures benefit all parties and promote confidence in the program's fairness.

Technology and Administrative Efficiency

Several states that have implemented paid family and medical leave programs have experienced significant claims processing backlogs, resulting in delayed benefit payments and increased administrative burdens for employees and employers alike. Virginia has the advantage of learning from those experiences. The VMA encourages the Commission to leverage modern technology, including automation and, where appropriate, artificial intelligence and data analytics, to improve administrative efficiency, support timely claims processing, and strengthen program integrity while preserving appropriate human oversight for eligibility determinations and other discretionary decisions. Efficient administration benefits employees through more timely benefit determinations, reduces compliance costs for employers, and supports the program's long-term financial sustainability, helping to keep contribution rates as low as possible.

Implementation Timeline and Stakeholder Engagement

Given the complexity of the new program, the VMA encourages the Commission to publish draft guidance, conduct stakeholder meetings, and provide opportunities for ongoing collaboration throughout the regulatory process. Early engagement with employers, payroll providers, insurers, employee representatives, and other stakeholders will improve implementation and reduce the likelihood of unintended consequences.

Conclusion

Virginia's manufacturing sector supports policies that provide clarity, consistency, and administrative efficiency while allowing employers to remain competitive and continue creating high-quality jobs throughout the Commonwealth. The success of Virginia's Paid Family and Medical Leave program will depend not only on the statute enacted by the General Assembly, but also on the clarity, predictability, and practicality of the regulations adopted by the Commission. The VMA appreciates the opportunity to provide these comments and looks forward to continuing to work collaboratively with the Commission throughout the rulemaking process.

Thank you for your consideration of these comments.