ST. PAUL – House Democrats approved legislation Tuesday which Rep. Joe McDonald, R-Delano, 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.
“The majority of Minnesotans supports paid family leave and, as a small-business owner, I realize the importance of this,” McDonald said. “The Minnesota Chamber of Commerce reports 80 percent of its members already provide paid family leave. The problem with this bill is it forces a one-size-fits-all mandate on all of Minnesota’s industries, private employers, nonprofits, cities, counties, and school districts. It ultimately threatens workers’ benefits, and employees may end up with a worse paid family leave program than the one their employer currently offers.”
McDonald 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.
Unlike the Federal Family and Medical Leave Act, which only applies to employers with 50 or more employees, McDonald 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, McDonald 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.
“Programs such as the one we propose have been successful elsewhere,” McDonald said. “Other states have implemented affordable, sustainable paid family leave programs through similar models. We can provide the options Minnesotans want without raising taxes or forcing them to enter a government-run model and that’s what I would like to see.”
McDonald 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 also was offered as an amendment to the Democrat bill. House Democrats voted down that offering before approving their own bill, sending it to the Senate for action.