Mandatory Paid Family and Medical Leave, Other Leave Changes

The House General and Housing Committee took an initial look Wednesday at the newly introduced H.66, which would create a mandatory paid family and medical leave program in the state. The bill actually makes several significant changes to state law – it creates a paid leave program and fund to cover family and medical leave as well as “safe leave” related to sexual assault and domestic abuse, it expands the employers and employees covered by the state’s existing unpaid family and medical leave laws, and adds a new unpaid leave program to cover safe leave that is separate from unpaid family and medical leave. Although total paid leave for family and medical and/or safe leave is limited to 12 weeks in any 12 month period, the unpaid leave protections for family and medical leave and safe leave are separate, and each can be up to 12 weeks.

The bill is expected to be a top priority and high profile initiative for legislative leadership, especially in the House, and could prove highly contentious. It raises serious questions about long term costs and sustainability, labor cost and management issues (especially for many small businesses that will now be subject to family and medical leave laws, paid or unpaid, for the first time), and a troubling precedent in creating new and costly programs by simply adding new payroll taxes rather than working to fit them into existing budgetary constraints.

Although past proposals have failed to move forward because of issues of cost and administration, as well as the Governor’s veto, both the House and Senate have majorities that could override a veto of H.66, and the number of sponsors on the bill already exceeds, on paper, the number of votes to override. It is therefore more important than ever for employers who have serious concerns about this bill to engage with legislative leadership, the committees that will review this bill, and their own local legislators to encourage necessary changes to H.66 and/or alternative approaches to the issue of paid leave.

Employers concerned about this bill and issue are strongly encouraged to contact us at info@aivt.org for more information and updates on developments, as well as to discuss options for engaging the Administration and legislators on this issue.

The bill and issue are complex, and more details can be covered in future updates. However, the key highlights are outlined below, and you can review the full text of the bill by clicking here and other information about the bill by clicking here. If you have any questions, again do not hesitate to contact us at info@aivt.org.

Paid Leave, funding. H.66 would create a Paid Family and Medical Leave program, staff, and fund under the auspices of the State Treasurer’s office. The funds themselves would be collected and expended by the Department of Taxes. In additional to an up front $20 million appropriation, the fund would be financed initially primarily through a 0.58% payroll tax, nominally split between employers and employees unless an employer volunteers to pay higher portion of the total. Self employed individuals can also participate, being responsible for the whole 0.58%. The covered, taxable wages would be up to twice the Social Security Contribution and Benefit Base. Employees earning less than $25,000 annually can have their contributions returned as a tax refund.

However, it is important to note that the actual tax rate going forward would be set each year by the Legislature and would have to raise enough revenue to pay for projected benefits over the coming fiscal year in addition to maintaining a 9 month reserve on top of that, and to cover administrative costs.

Paid Leave, benefits. Covered leave would total up to 12 weeks in a 12 month period. Up to 12 of the weeks can be used for family and medical leave as well as safe leave. Up to two of the weeks could be used for bereavement leave. Benefits will be the lesser of 100% of the employee’s average weekly wage or the State Average Weekly Wage. Employees can claim intermittent or partial leave in increments of one day or 1/5 of a work week.

Employers could opt out of this program if they offer an approved benefit plan that provides equivalent or greater benefits for all of their employees.

Employees would not be able to collect benefits under this program for any week in which they receive temporary total disability benefits under workers compensation, temporary partial disability benefits for the illness or injury that paid leave is being applied for, or unemployment benefits.

“Family and medical leave” would mean a leave of absence from employment or from self-employment by a qualified individual for:

(A) the qualified individual’s own serious illness or injury;

(B) a serious illness or injury of the qualified individual’s family member;

(D) the birth of the qualified individual’s child;

(E) the initial placement of a child 18 years of age or younger with the qualified individual for the purpose of adoption or foster care; or

(F) a qualifying exigency arising out of a qualified individual’s family member’s active duty service in the U.S. Armed Forces or notice of an impending call or order to active duty in the U.S. Armed Forces.

“Safe leave” would mean a leave of absence from employment or self-employment by a qualified individual because:

(A) the qualified individual or the qualified individual’s family member is a victim of domestic violence, sexual assault, or stalking;

(B) the qualified individual is using the leave for one of the following reasons related to the domestic violence, sexual assault, or stalking: (i) to seek or obtain medical care, counseling, or social or legal services, either for themselves or for a family member; (ii) to recover from injuries; (iii) to participate in safety planning, either for themselves or for a family member; (iv) to relocate or secure safe housing, either for themselves or for a family member; or (v) to meet with a State’s Attorney or law enforcement officer; and

“Family member” would mean:

(A) regardless of age, a qualified individual’s biological, adopted, or foster child; a qualified individual’s stepchild or legal ward; a child of the qualified individual’s spouse or civil union or domestic partner; a child to whom the qualified individual stands in loco parentis; or an individual to whom the qualified individual stood in loco parentis when the individual was under 18 years of age;

(B)(i) a parent of a qualified individual or qualified individual’s spouse or civil union or domestic partner, regardless of whether the relationship to the qualified individual or qualified individual’s spouse or civil union or domestic partner is a biological, foster, adoptive, or step relationship; (ii) a legal guardian of a qualified individual or qualified individual’s spouse or civil union or domestic partner; or (iii) a person who stood in loco parentis when the qualified individual or qualified individual’s spouse or civil union or domestic partner was under 18 years of age;

(C) a person to whom the qualified individual is legally married under the laws of any state or a civil union or domestic partner of a qualified individual;

(D) a grandparent, grandchild, or sibling of the qualified individual or qualified individual’s spouse or civil union or domestic partner, regardless of whether the relationship to the qualified individual or the qualified individual’s spouse or civil union or domestic partner is a biological, foster, adoptive, or step relationship; or

(E) as shown by the qualified individual, any other individual with whom the qualified individual has a significant personal bond that is or is like a family relationship, regardless of biological or legal relationship.

Unpaid Leave. The bill would also expand Vermont’s existing family and medical leave law by applying it to all employers with one or more employees (current state law only applies to employers with 10 or more employees for parental leave and 15 or more for other family and medical leave). It would also apply protections to any employee for whom the employer withholds Vermont income taxes for two of the preceding four quarters, as opposed to the current coverage only for employees working 30 hours or more a week for at least one year. Covered uses for unpaid leave would also be expanded to match the family and medical uses the bill creates for the paid family and medical leave program.

As noted above, the bill would also created a 12 week unpaid leave law alongside and in addition to the family and medical leave laws to cover “safe leave” as defined above.

Although paid leave benefits could be collected during periods of either type of unpaid leave, the use of paid leave benefits would not extend the weeks of unpaid leave available.