There’s an interesting tussle taking place at the State House right now around paid family medical leave. And depending on how it’s resolved, it has the potential to affect every private sector employer in NH and their employees.
It’s not a new discussion. In fact, it’s the same public policy dispute between the legislature and the governor from last year.
The issue at the center of the debate is whether all private companies and their employees will be required to participate in a new insurance-type product administered by the NH Department of Employment Security or whether they will use a more open, volunteer program with private insurance.
The issue of paid family leave has been around almost as long as the discussion that resulted in the federal Family Medical Leave Act, also known as FMLA, which was signed into law in 1993.
FMLA requires employers with 50 employees or more to provide up to 12 weeks of job-protected unpaid leave for qualified medical and family reasons. Job protection means once an employee returns from leave, he or she will be able to continue in their current job or be placed in another position with similar pay and responsibility. In order to be eligible for FMLA, an employee must have worked for their employer for at least 12 months (or at least 1,250 hours).
Over the last several years, there have been attempts to pass some form of paid family medical leave. For example, last year the House and Senate passed legislation, SB 1, that requires all private sector employers to provide paid family medical leave with the paid leave benefit set at 60% of the employee’s wage.
In many ways, it was structured like the federal FMLA in terms of who qualified and the length of the paid leave. Two significant differences were that it applied to all companies with any number of employees, not just those with 50 employees or more, and it lowered the job protection threshold of the federal act to companies of 20 employees or more.
SB 1 left it to employers to decide whether the company would pay for the benefit on behalf of their employees or require the employee to pay for it through a payroll deduction. The governor vetoed this bill when it reached his desk, calling it an income tax.
Gov. Sununu offered a different version of a paid family leave benefit. His plan called for a cooperative agreement with the state of Vermont to provide a new paid family leave benefit for state employees using private sector insurance to underwrite the product. The governor’s plan provided for up to six weeks of paid time off and left job protections at the threshold called for by the federal FMLA. This plan was included in the governor’s original budget submitted to the legislature in 2019, but language was quickly removed by budget writers, resulting in a stand-off between the legislature and the governor at the end of the session.
Much like last year, the 2020 legislative session has two competing paid family medical leave proposals. The first, HB 712 FN, was a retained bill from last session recently passed by the House and sent to the Senate for review and consideration.
This bill is a lot like SB 1, the bill vetoed by the governor last session. One important distinction is that it has no job protection language, defaulting to the federal FMLA threshold of 50 employees or more.
And like last session, Gov. Sununu is offering a competing proposal, this time in the form of a bill, SB 730, establishing what is now called the “Granite State Paid Family Leave” plan. This proposal is similar to the governor’s plan from last session but does not include, or require participation from, Vermont. It establishes a paid family medical leave benefit for state employees using private sector insurance. Also, like last year, private sector employers could opt into the program.
A Plea for Flexibility
As a leading private sector manufacturing employer, I appreciate the voluntary nature of the governor’s proposal. Many companies statewide already provide some form of paid leave. SB 730 will offer a product that many companies will find attractive. They may even want to participate in that program as an alternative to the paid leave they are providing now.
The point is that it gives the employer a wide degree of discretion to offer benefits that employees desire in a way that won’t result in financial distress for their employer.
There is no question that paid family medical leave is important for many working families in the state. My hope is that the legislature and the governor can pass a plan that provides maximum flexibility and works for both employers and employees.
Kathy Garfield is president of the Keller Companies in Manchester and a member of Business and Industry Association’s (BIA) executive board. For more information, visit biaofnh.com.