CITIZEN VOICES® Competing family and medical leave proposals take shape
Mar 08, 2019
This year New Hampshire legislators are considering multiple bills related to family and medical leave.
There are two bills in the House and Senate that would establish a mandatory statewide program paid for with 0.5% of all employee wages.
Gov. Chris Sununu is including an alternative, opt-in program as part of his state budget bills. His plan is paid for with an as-yet undetermined percentage of wages from participating employees.
The debate so far
Before his 2016 election, Gov. Chris Sununu voiced support for a paid family and medical leave program for New Hampshire residents.
In 2017 a bipartisan group of legislators proposed a statewide program, paid for with a percentage of every employee’s wages. Some Republicans called this an income tax. In response, legislators amended the proposal to allow employees to opt-out of the program. Opponents then argued the program would not be financially sustainable.
When Gov. Sununu said he would veto the bill, the proposal fell apart.
After winning a majority in the state House and Senate in 2018, Democratic legislators are back with another statewide family and medical leave proposal. Gov. Sununu is advocating for a privately-run alternative.
The Democratic proposal
The family and medical leave program would be paid for with a premium of 0.5% of employee wages. An employer could choose to take this out of each employee’s wages, pay the premium on behalf of employees, or purchase equivalent family and medical leave insurance from a private insurer.
Every employee could take up to 12 weeks of leave for family or medical reasons. During that time the employee would receive 60% of his or her wages.
The Democratic bills do not allow employees to opt-out of the program.
SB 1 and HB 712 are both in House committees. The House and Senate are very likely to pass one of the bills, but Gov. Sununu is likely to veto. It is not yet clear if there is enough support among legislators to override a veto.
Gov. Sununu’s proposal
Gov. Sununu’s 2019 proposal is based on first establishing a family and medical leave program for every state employee in New Hampshire and Vermont.
A private insurer would run the program and set the premium for state employees, reflected as a percentage of each employee’s wages. The state would pay the premium for all state employees.
Private employers and individual employees would be able to opt into the same family and medical leave plan as state employees. However, the insurance company could charge employers with less than 100% employee participation, employers with less than 20 employees, and individual employees more than the state premiums.
Employees would be eligible for six weeks of leave for family or medical reasons. During that time employees would receive 60% of their wages.
Sununu put the language for this program into his budget proposal. The House will probably cut his plan from the budget. Without that enabling legislation, Sununu’s proposal is dead in the water.
If the Legislature does pass enabling language, the state will still need to find a suitable private insurer and renegotiate contracts with the state employee unions.
Where they agree
In general, Gov. Sununu and the majority of legislators agree that the state would benefit from making paid family and medical leave more accessible.
The governor’s draft legislation lists the following benefits of widely available family and medical leave:
“... attracting and retaining workers, including younger workers, to the state; enabling parents to bond with biological, adopted, or foster children, helping to meet the needs of an aging population; advancing the health of the state’s workforce and workplace stability; and enhancing worker retention and productivity.”
Where they disagree
The debate between Democrats and the governor boils down to a debate over taxation and affordability.
The governor and other Republicans argue the Democratic plan creates an income tax, since every employer would have to contribute 0.5% of employee wages to the program.
Democrats counter that the program is equivalent to New Hampshire’s unemployment insurance, which is also paid for with a percentage of employee wages.
Democrats also argue the governor’s plan will probably be unaffordable because there will be a much smaller pool of employees participating. Individuals not employed by the state who choose to participate are more likely to take leave, so the private insurer will probably charge higher rates than 0.5% of wages.
Gov. Sununu argues private employees should be able to choose whether to spend their wages on family and medical leave insurance. 0.5% may be a small percentage, but it is significant for low income families struggling to make ends meet.
Which family and medical leave plan do you support? Let us know in the comments below.