UPDATED ACTION ALERT | Mandatory Paid Family and Medical Leave Advances in the House

H.107, imposing mandatory paid family and medical leave, passed the House General, Housing, and Military Affairs Committee this week and is now before the House Ways and Means Committee.  The bill is significantly more expansive than paid family leave legislation passed last year but vetoed by the Governor.

Although the Ways and Means Committee scaled back a version of this legislation during the last Legislature, it remains far from certain whether the Committee will impose any restraint on the current version of the bill.  AIV will be engaging the Committee on this legislation, and members are strongly encouraged to familiarize themselves with the bill, follow up with us to learn about further developments and opportunities to engage the Committee, and to contact Committee members and their own Representatives with any concerns and questions.  Links to the current version of the bill and contact information for legislators can be found at the end of this post, and you can contact AIV at info@aivt.org for more information.

Overview of the Current Bill

Under H.107,  all qualified employees would be entitled to 12 weeks in any 12 month period with 100% wage replacement, capped at two times the so-called “livable wage” as determined by the Joint Fiscal Office.  For reference, JFO determined that the 2018 “livable wage” was $13.34 an hour, so if H.107 had been in effect in 2018 employees earning up to $26.68 would receive 100% wage replacement.

To qualify, an employee must have earned during the past four completed quarters the equivalent of 1040 hours at the minimum wage at that time.  Again, for reference, that would equate to $11,211 at the current minimum wage.

Paid leave could be taken by an employee for:

  • his or her own serious illness, provided he or she is not eligible to receive workers’ compensation pursuant to 21 VSA Chapter 9 for the serious illness
  • a serious illness of the employee’s family member
  • the employee’s pregnancy
  • the birth of the employee’s child
  • the initial placement of a child 18 years of age or younger with the employee for the purpose of adoption or foster care

In addition, employees would be eligible to take up to two weeks of this 12 week total for paid “bereavement leave” for up to a year after a family member’s death.

“Family members”  would include:

  • child, step child or ward who lives with the employee, or foster child;
  • spouse, domestic partner, or civil union partner
  • parent or the parent of the employee’s spouse, domestic partner, or civil union partner
  • sibling or the sibling of the employee’s spouse, domestic partner, or civil union partner
  • grandchild
  • grandparent or the spouse, domestic partner, or civil union partner of the employee’s grandparent
  • a child for whom the employee stands in loco parentis or an individual who stood in loco parentis for the employee when he or she was a child

Paid leave would run concurrent with any state and federal unpaid family and medical leave.  The bill would amend the covered employer threshold and qualified purposes of the state’s unpaid and parental and family and medical leave to conform with the bill’s paid leave criteria.

The bill would lower the threshold of employers required to provide return to work protection from the current 15 employees for unpaid state family and medical leave to 10 employees, which is the current state threshold for unpaid parental leave.

The bill would create a private right of action for an employee to file suit against an employer that does not comply with the statute.

Benefits would be paid out of a state-administered fund, financed by a payroll tax totaling 0.93%, with the employee and the employer each assessed half of that amount per employee (0.465% each).  Although benefits are capped at $26.68 per hour, the payroll tax applies to the first $150,000 in employee wages (indexed to any positive increase in inflation).  The payroll tax must be reset annually by the Legislature based on solvency targets for the program.

Action Needed

AIV opposes H.107 in its current form.

Vermont employers and their employees already face significant costs of doing business in Vermont, including high labor costs, that place them a serious competitive disadvantages to companies in other states.  The 0.93% payroll tax represents a meaningful new cost on employers and employees, especially when compared to existing tax burdens, including current unemployment insurance tax rates and effective personal state income tax rates.  Moreover, the scope of the proposed program is both significant and unprecedented in other states, raising serious concerns about over-utilization and excessive costs that could strain solvency and lead to much higher taxes.  Questions remain about how this new law would interact with other leave and related labor laws.  We are also concerned that creating a state mandate could disqualify employers currently offering paid leave voluntarily from claiming federal tax benefits for doing so.

It will be critical for legislators to hear from employers about potential issues and concerns with this legislation.

To review the version of H.107 passed by the House General, Housing, and Military Affairs Committee now before the House Ways and Means Committee, click here.

To find contact information for the House Ways and Means Committee, click here.

To find contact information for your Representative(s), click here.

To contact House Speaker Mitzi Johnson:  (802) 828-2245  |  speaker@leg.state.vt.us