This spring, Virginia became the first Southern state to establish a statewide paid family and medical leave insurance (PFMLI) program. Beginning in 2028, nearly all workers in the state will have access to up to 12 weeks of paid leave to:
- Welcome a new child through birth, adoption, or foster care
- Recover from a serious health condition
- Care for a family member with a serious health condition
- Address military family needs
- Respond to situations involving domestic violence, sexual assault, or stalking
Virginia’s program will be funded through small contributions from employers and employees and administered by the state. It joins 14 states and the District of Columbia that have adopted similar programs. While funding structures, wage replacement rates, and administration vary from state to state, contribution rates are generally modest — typically 1 percent or less of wages.
The Commonwealth also recently enacted a paid sick leave policy that will allow workers to earn one hour of paid sick leave for every 30 hours worked, up to 40 hours annually. The policy begins phasing in during 2027 for larger employers and will eventually cover workers statewide.
Why It Matters
Paid leave and paid sick time can be especially valuable for small businesses. These policies can help employers attract and retain talent, reduce turnover, and support a healthier, more productive workforce. For employees, they provide the stability needed to care for themselves and their families without sacrificing income or employment.
Quality of Life and Competitiveness
North Carolina and Virginia regularly compete for both businesses and workers. In 2024, CNBC’s annual Top States for Business ranked Virginia number one overall. In 2025, NC received the top score.
And both states consistently score highly in the business friendliness category.
Business Friendliness Rankings
- North Carolina: #2 (2024), #4 (2025)
- Virginia: #5 (2024), #7 (2025)
Where the two states differ more noticeably is in CNBC’s Quality of Life category, which considers factors such as health care, child care, environmental quality, inclusiveness, voting access, and living wage policies.
Quality of Life Rankings
- North Carolina: #32 (2024), #29 (2025)
- Virginia: #19 (2024), #8 (2025)
Virginia’s recent investments in paid family leave and paid sick time raise an interesting question: Can policies that support working families also strengthen a state’s economic competitiveness? We’ll be watching closely. CNBC’s next Top States for Business rankings will be released July 15. The results may offer new insights into whether being first for business and first for families can go hand in hand.