Business & Economy

Paid family leave bill not on track to pass this year

Mitzi Johnson
House Speaker Mitzi Johnson, D-South Hero. Photo by Erin Mansfield/VTDigger
A bill to provide Vermont workers with 12 weeks of paid family and medical leave passed a key committee Friday but will not move to the House floor for more than a week.

That’s after a key deadline at the end of this week — when any bill containing an appropriation needs to be headed to the House floor — and means its chances of becoming law this year are slim.

House Speaker Mitzi Johnson, D-South Hero, said Tuesday the bill is on a two-year trajectory. She said her goal has been to get the bill out of the House this year to have the Senate consider it next year, in the second half of the biennium.

The bill, H.196, passed the House General, Housing and Military Affairs Committee in a 7 to 4 vote Friday. It now sits in the House Ways and Means Committee, where Chair Janet Ancel, D-Calais, said members would take testimony next week at the earliest.

H.196 would provide Vermont workers 12 weeks of fully paid leave to care for a newborn or adoptee, recover from an illness or take care of a sick family member. The worker would need to have been with that employer for at least one year prior to the leave.

The program would be funded and administered similar to unemployment insurance. The Vermont Department of Labor would collect a payroll tax and then make payments to eligible workers who file claims for the family or medical leave. Payments would be capped at a rate equivalent to a salary of about $52,000 a year.

The original version would have been funded through a 0.93 percent payroll tax split evenly between the employer and the worker.

An analysis by the Legislature’s Joint Fiscal Office said the payroll tax on state workers would cost the state at least $2.7 million a year, and the payroll tax on education workers at least $4.4 million a year.

The House General Committee changed the funding structure so the entire 0.93 percent payroll tax — raising just under $80 million — would be on the employee.

Paid family leave has support from several organizations, including Main Street Alliance — a business organization that lobbies on progressive issues — and the Vermont Commission on Women. The bill was co-sponsored by more than 50 Democratic, Republican and Progressive lawmakers.

Rep. Sam Young, D-Glover
Rep. Sam Young, D-Glover, one of the co-sponsors, said he thought it was fair to have the tax burden split evenly between employers and workers. But he said he understands the reasons the House General Committee may have changed the tax structure, and said the issue needs more testimony.

Rep. Heidi Scheuermann, R-Stowe, voted against the bill in the House General Committee. “It’s an $80 million tax on every Vermont worker — almost 1 percent on anyone who collects a paycheck — to pay for a benefit, or a program, that employees don’t necessarily want,” she said.

Scheuermann, a business owner, said it has been hard to sit in the House General Committee while women’s organizations push the bill. “It paints us as victims, and I personally am sometimes offended by that,” she said.

“I feel like we should be fighting for what we’ve always fought for, which is equality and making sure we are treated fairly, and encourage women to be strong and forceful and talk to their employers and everything like this,” Scheuermann said.

Gov. Phil Scott, a Republican, said hours after the bill was introduced that he would veto it. On Friday, just minutes after the bill passed out of committee, his spokesperson issued a statement condemning the bill and the taxes in it.

“We all agree with a goal of providing more benefits and higher wages to workers, but today the House committee tried to do that in a way that ultimately costs Vermonters more money and hinders economic growth – the exact opposite of their stated goals,” said Rebecca Kelley, Scott’s spokesperson.

She pointed to testimony from the Vermont Department of Human Resources, which gave similar projections as the Joint Fiscal Office on how much it would cost to replace workers who took paid family or medical leave. The JFO predicted a cost of as much as $15.4 million a year for state government to replace workers.

“At a time when we are losing an average of six workers from our workforce per day, mandates from Montpelier that make Vermont less affordable are the wrong approach,” Kelley said. “The bottom line is working Vermonters cannot afford for state government to take more of what they earn.”

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Erin Mansfield

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