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     FAMLI WAGES UPDATE: Gross Wages will Include Pre-Tax Amounts

    September 14, 2023

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    Dear Employers and Third Party Administrators,

    The FAMLI Division has an important update to share about our new definition of “wages:” FAMLI wages will include pre-tax amounts. This is a change from previous guidance limiting gross wages to post-tax amounts.

    After receiving a lot of feedback that the old definition of wages was too complicated, the Division recently amended the definition of “wages” to mean “gross wages” and will include typical employer compensation. Premiums and benefits will be calculated using this new definition starting January 1, 2024.

    Gross wages will include the following pre-tax amounts:

    ·  Salary

    ·  Hourly wage

    ·  Overtime

    ·  Tips

    ·  Bonuses

    ·  Commissions

    ·  Piece rate

    ·  Employer-provided paid leave (PTO, sick, vacation, etc.)

    ·  Disability benefits paid by the employer and not by a third-party

    ·  Parental leave paid by the employer and not by a third party

    ·  The value of lodging or meals used as a credit toward the minimum wage

    Gross wages will not include:

    ·  Severance payments

    ·  Employer contributions to, or payouts from, a deferred compensation plan

    ·  Profit-sharing

    ·  Pensions or retirement plan payments

    ·  Expense reimbursements (mileage, travel, moving, per diems, etc)

    ·  Non-monetary payments (except lodging or meals to the extent they’re used as a credit toward the minimum wage)

    As noted above, this is pre-tax gross wages.  For example, if an employee is paid a $1,000 weekly salary and chooses to have their $100 health insurance contribution deducted on a pre-tax basis, their pre-tax gross wage is $1,000.  

    For future reference, the new definition of wages can be found on the Employer's page under Important FAMLI Matters. To review the complete set of newly adopted rule amendments please refer to our Rules page. 

    Thank you.