UPDATE | Paid Family Leave Passes the House, Debate to Resume Next Year in the Senate

The House last week passed H.196, creating a paid family leave program.  However, the Senate is not expected to consider the bill until next year.  The House-passed version of the bill went through several changes as it was considered by the House General, Housing, and Military Affairs Committee and then the House Ways and Means Committee, with more minor changes recommended by the House Appropriations Committee.  The primary influence on the language that ultimately passed the House was the Ways and Means Committee recommendations.

The House-passed bill first makes the following changes to unpaid leave:

  • Conflates current state family and parental leave as 12 weeks of unpaid “family leave”.
  • Applies to employers with 10 or more employees employed 30 or more hours per week during a year.
  • Would be available for the same purposes as current state family leave with the addition of care for a grandchild, grandparent, or sibling.
  • Would be available for the same purposes of current state parental leave with the addition of the initial placement (within a year) of a child 16 years of age or younger for the purpose of foster care (in addition to adoption), and (within a year) for the birth of a grandchild if the employee is the primary caregiver or guardian and the biological parents are not themselves taking leave.
  • Total use of accrued paid leave, insurance benefits, or the newly created Parental and Family Leave Insurance benefits shall no longer be restricted to six weeks but cannot exceed the underlying 12 weeks of unpaid family leave.

The House-passed bill would further create a new Parental and Family Leave Insurance program, which would:

  • Apply to anyone providing employment services as defined in the state’s unemployment insurance statutes who has been an employee for 12 of the previous 13 months.
  • Cover family leave for the same purposes as unpaid family leave as amended above except that the serious illness of the employee his or herself is not included.
  • Be administered by the Department of Labor and be financed through a 0.141% payroll tax on the first $150,000 in wages for every employee.
  • Employers shall withhold this tax and may choose to pay some or all of the tax owed by their employees rather than deducting it from employees’ wages.
  • Employees must file for benefits with the Department of Labor.
  • The Legislature shall adopt a new tax rate every year to cover the next fiscal year’s expected obligations.
  • Weekly benefits would be the lesser of 80% of the employee’s average weekly wage or the equivalent of a 40 hour week at double the state “livable wage”.
  • Paid benefits would be limited to six weeks in any 12 month period.
  • Taxes would be collected beginning July 1, 2018, and benefits would be available starting July 1, 2019.

AIV remains opposed to the House-passed version of H.196.  Significant concerns surround this issue, including the cost to employees and likely upward pressure on the tax to sustain the program, risks of the tax being transferred in whole or part onto employers, complications for smaller employers accommodating leave, the negative precedent for additional payroll-tax-financed programs in the future, etc.

Members and non-members concerned about this issue are encouraged to contact us at info@aivt.org to keep informed about developments going forward and to learn more about options for engaging legislators leading into next year.