US to expand incentives for employers offering paid family leave

Washington: The U.S. Treasury Department will announce new guidance on Wednesday expanding incentives for employers to offer paid family leave, according to three people familiar with the plans that the White House ‌hopes to ⁠tout in midterm ⁠elections.

Treasury Secretary Scott Bessent and House Speaker Mike Johnson are set to join Arizona Representative Juan Ciscomani outside Phoenix to ​discuss the policy. Ciscomani is one of the most vulnerable Republicans in the House, and administration officials are rallying ​to support candidates facing strong Democratic challengers.

Also Read: SC asks govt to plan law for paternity leave: Here's what top court has said


The policy they'll be promoting centers on an expansion of a paid leave tax credit created in 2017 during President Donald Trump's massive first-term tax cut law.

It ​allows employers to claim a tax credit if they offer ⁠at least two ‌weeks of family and medical leave worth at least 50% of an ​employee's wages. Employers ​qualified only if they paid wages while a worker was out, but ⁠many businesses choose instead to purchase insurance policies to cover the costs ​of leave.

The guidance allows employers to claim the credit if ​they pay insurance premiums, said the people, who spoke on the condition of anonymity because they were not authorized to speak publicly.

The U.S. is the only member of the 38-nation Organisation for Economic Co-operation and Development without a paid family and medical leave requirement.

"Hardworking Americans should not have to choose between caring for a loved one and earning a paycheck," Bessent said in a statement.

White House spokesman ‌Kush Desai said in a statement that the policy was "another historic win for working parents."

The policy was outlined in Trump's signature tax and immigration law, the ​One Big Beautiful ​Bill Act.

Also Read: India Inc embraces gender-neutral parental leave policies for inclusive work environment

Trump and conservatives ⁠are seeking to use that law as the centerpiece of their message in November's elections, though Republicans have dramatically lost ground when it comes to economic issues.

A Reuters/Ipsos poll released Monday found that ​voters prefer Democrats' stewardship of the economy 37% to 36%, and registered voters side with Democrats on a generic congressional ballot by a 5% margin.

The Trump administration's policy seeks to use tax incentives to encourage employers to bear the cost, rather than the federal government, and has long been championed by Nebraska Senator Deb Fischer, an influential Republican who beat back an insurgent independent candidate in a close 2024 reelection fight.