ST. PAUL – House Democrats approved legislation Tuesday which Rep. Paul Anderson, R-Starbuck, said will hurt employee wages and damage businesses by establishing a mandatory paid leave program funded by a new tax on employers and workers at a time the state has a $17.5 billion surplus.
“I agree there's a need for a program like this, but this one-size-fits-all approach is not the answer,” Anderson said. “It will negatively impact every small business and worker in the state, not only with a large tax increase, but it will also make it more difficult for businesses to find enough workers to fill their needs at a time we already have a workforce shortage.”
Anderson said the program (H.F. 2) would cost billions of dollars to get up and running and require as many as 400 new full-time government employees to develop and administrate. He added the program applies to virtually every industry in the state – private employers, nonprofits, cities, counties, and school districts – despite objections. It would be funded with a $2.9 billion tax on employers and employees and expands employers’ leave obligations to part-time and temporary employees. The Minnesota Chamber of Commerce reports 80 percent of its members already provide paid family leave, Anderson said.
Unlike the Federal Family and Medical Leave Act, which only applies to employers with 50 or more employees, Anderson noted this program would apply to all employers including those with only one employee. Employees can stack leave together, allowing for up to 24 weeks of paid time off per year.
On the other hand, Anderson indicated Republicans have developed a plan which takes a different approach, providing a small-business tax credit to incentivize employers to join the plan. The key difference, he said, is the minority’s plan provides paid family and medical leave benefits for employees without job-crushing mandates and new taxes.
The House Republican proposal provides a small business tax credit to incentivize employers to join the plan. Minnesotans may opt into the program for $5 per week if an employer does not join by using the parameters of the state’s paid leave policy, leveraging the power of the state’s 10s of thousands of employees. Employees who are satisfied with current benefits offered by their employers can keep them without being forced onto a government-run program, Anderson said.
“This approach provides flexibility to address this issue best without costly mandates that ultimately cost businesses and workers more,” Anderson said. “The vast majority of our businesses already are doing all they can to accommodate workers and the last thing they need is a blanket mandate from the state adding to the challenges they face.”
Anderson also indicated the House Republican option is backed by an insurance company, so taxpayers will not be expected to cover the costs of program shortfalls or losses. Benefits would be available to Minnesotans this Jan. 1 – a full 18 months earlier than the House Democrat proposal.
The House Republican plan was offered as an amendment to H.F. 2 on Tuesday. House Democrats voted down that offering before approving their own bill, sending it to the Senate for action.
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