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Paid family and medical leave passes Minnesota House, heads to Senate [1]

['Max Nesterak', 'More From Author', '- May']

Date: 2023-05-02

Minnesota workers would be able to take up to 12 weeks of paid family leave and 12 weeks of medical leave under a closely watched bill that passed the House on a largely party-line vote on Tuesday.

The bill (HF2) would bring Minnesota in line with all high-wealth nations and 11 other states that ensure workers have paid time off to care for newborns, help sick family members or recover from serious illnesses or injuries.

“At the heart of this bill is a recognition of our universal humanity,” said Rep. Ruth Richardson, DFL-Mendota Heights, and author of the bill. “A recognition that at some point in our lives, we or our loved ones are going to need time to bond, to heal, recover or navigate providing care for a loved one.”

The benefit would be available to workers beginning in July 2025 and would be funded through payroll taxes on employers and workers. It would be administered through the state’s Department of Employment and Economic Development, like unemployment insurance.

Workers would receive a percentage of their salary up to the state’s average weekly salary, which would be about $1,300 in 2023. Employers may opt out of the state-run program if they offer paid leave benefits that are equal or more generous than the state’s.

Providing paid leave is a core part of state Democrats’ plan to expand social benefit programs, including a public health insurance option, free school lunches to all students, a robust child tax credit and unemployment benefits eligibility for hourly school workers.

Republicans, who lost control of the Senate in the midterms, have been unable to stall Democrats’ agenda, other than offering heaps of scorn during lengthy floor debates.

“You’re like a drunk on a spending spree,” said Rep. Kurt Daudt, R-Crown, during the House floor debate on Tuesday, to audible groans. “I’m sorry I have offended all the drunks by comparing you to a Democrat.”

Two Democrats — Reps. Dave Lislegard of Aurora and Gene Pelowski of Winona — voted against the bill.

Studies show paid parental leave is associated with a host of positive outcomes, including lower rates of infant mortality, higher rates of breastfeeding, and overall better health for mothers and children. Paid medical leave may also improve health outcomes and provide an economic safety net for workers who are recovering from serious illnesses like cancer or caring for a sick family member.

Paid family and medical leave has broad support among the vast majority of the public, although Democrats and Republicans are divided on how generous the benefits should be and who should foot the bill.

Under the Democratic proposal, Minnesotans would be able to take up to 12 weeks of leave to recover from pregnancy or serious health condition and up to 12 weeks of leave to bond with a newborn or care for a family member.

Workers would not be able to take more than 18 weeks of family and medical leave combined in a single year unless they had serious pregnancy complications.

The bill has drawn enthusiastic support from unions, progressive faith groups, the AARP and small businesses represented by the Main Street Alliance, and fierce opposition from other business groups, including the Minnesota Chamber of Commerce and the Minnesota Business Partnership.

Republicans railed against the price tag on the bill, which includes $128 million in start-up costs and $668 million in seed funding for the benefits account. That includes hiring more than 400 full-time state employees, according to a state estimate.

The program would be entirely funded by payroll taxes after the state begins collecting premiums from employers in July 2025.

Republicans also expressed doubts that state workers would be up to the task, evoking the specter of another plagued roll-out like the health insurance marketplace MNsure or car tab program MNLARS.

Once the program launches in 2025, the state estimates it will cost about $1.2 billion a year, which will be paid for entirely through a 0.7% tax on employees’ wages, half of that paid by the worker, and the other half by the employer.

Those estimates weren’t available to lawmakers until after the bill had passed through several committees, which Republicans said was reason to delay its passage. They also expressed doubt in the state’s cost estimates, arguing it potentially underestimated how much leave workers would take.

Republicans’ own version of a paid family and medical leave, which they introduced Tuesday, would give tax incentives to small businesses to enroll in an insurance program administered by a private company selected by the state. Workers would be able to receive up to 67% of their wages for up to 12 weeks per year.

Republicans boast that the program wouldn’t increase taxes and isn’t a “one size fits all” mandate because enrolling in the coverage would be voluntary. If a business decided not to carry the paid family and medical leave, an employee could purchase the coverage on their own for $5 per week.

“This is a really good deal,” said Rep. Dave Baker, R-Willmar, who authored the proposal. “It’s not forcing something down someone’s throat.”

Richardson said the Republican plan wouldn’t change the status quo that low-income workers, people of color and rural residents are the least likely to have paid time off.

“Caring for yourself shouldn’t be about luck. Caring for your loved ones shouldn’t be about luck,” Richardson said. “I want to have the most inclusive leave (policy) that is not leaving people out because of the types of jobs that they’re in.”

Baker based his proposal after New Hampshire’s approach to paid leave, which he said has been a success.

Richardson pointed out that just 149 employers in New Hampshire signed up for family and medical leave insurance. Those companies employ just 6,100 of the state’s 600,000 workers. New Hampshire also enrolled its own 9,000 permanent employees, as Minnesota would do with its more than 50,000 workers under the Republican plan in order to lower the cost of the insurance.

Richardson also said employers and workers in New Hampshire pay more for worse coverage than Minnesota workers would receive under their plan. In New Hampshire, workers receive 60% of their weekly wages for up to six weeks.

Republicans balked at that claim and said Minnesota’s program will likely be underfunded and lead to higher tax hikes in the future.

Washington state, which served as a model for the Democratic bill, greatly underestimated how many workers would use the benefit, and the program ran up a $8.7 million deficit. Since launching the program in 2020, Washington has raised payroll taxes from 0.4% to 0.8%, just a hair over the 0.7% proposed in the Minnesota bill.

The DEED commissioner would be able to raise payroll taxes to maintain the program’s solvency. Under the Senate version of the bill, the commissioner would not be able to raise taxes beyond 1.2% of a worker’s taxable wages.

Democrats say the state is incurring significant human and economic costs in not guaranteeing paid leave for workers, and that they’re confident in the quality of their bill.

“This is one of the most thoroughly vetted bills I’ve ever seen,” said House Majority Leader Jamie Long, DFL-Minneapolis. “As Minnesotans, we value family. We value taking care of each other.”

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[1] Url: https://minnesotareformer.com/2023/05/02/paid-family-and-medical-leave-passes-minnesota-house-heads-to-senate/

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