| Update Applicable to: | Effective Date |
| All Employers in Rhode Island | January 1, 2026 |
What happened?
On June 26, 2025, the Rhode Island governor signed Senate Bill 0974aa, making key updates to the state’s Temporary Disability Insurance (TDI) and Temporary Caregiver Insurance (TCI) programs.
Overview:
This legislation strengthens Rhode Island’s paid leave framework while keeping employer costs stable. However, it introduces new compliance requirements around job reinstatement and benefits continuity. Early preparation will help ensure a smooth transition by January 2026.
What Employers Need to Know
- Higher Wage Base for Contributions: The maximum amount of an employee’s wages subject to TDI contributions will increase from $38,000 to $100,000 (or more, depending on benefit calculations). This change affects employee payroll deductions only, not employer costs.
- No New Employer Taxes: The program remains fully funded by employee payroll contributions, with no additional tax burden on businesses.
- Job Protection Requirements: Employees who take TCI leave must be reinstated to their original or an equivalent position upon return. Employers are also required to maintain health benefits during the leave period.
- Expanded Leave Eligibility: Employees may now take paid leave to care for seriously ill siblings, in addition to previously covered family members.
- Longer Leave Duration: The maximum duration of paid caregiver leave increases to 8 weeks in 2026.
- January 1, 2026: Maximum caregiver leave increases to 8 weeks.
- Gradual Benefit Increase: The percentage of wages used to calculate weekly benefits will gradually increase over time:
- Current Rate (since October 7, 1990 – December 31, 2026): Weekly benefits are calculated using 4.62% of an employee’s wages.
- Transition Year (2027): For benefit years beginning on or after January 1, 2027, the rate increases to 5.38%.
- Full Increase (2028 and beyond): Starting January 1, 2028, the rate rises to 5.77%.
- Impact: This gradual increase in the benefit rate means employees may receive higher weekly payments while on leave over time.
Source References
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