Lawmakers to discuss paid family leave fund

Lawmakers plan to take another swing at creating a paid family and medical leave fund during the next legislative session.

Passing the bill won't be easy. Similar efforts have failed to make it through the Legislature going as far back as 20 years ago, according to a new task force report on the issue presented Monday to lawmakers on the interim Economic Development and Policy Committee.

The fund will use both employer and employee contributions to pay employees up to 12 weeks of paid leave per year for a number of reasons, including childbirth, bereavement for the loss of a child and situations involving domestic abuse.

"Not everyone can shell out $5,000 every time someone needs to take some time out to take care of family," Rep. Linda Serrato, D-Santa Fe, told committee members, referring to costs incurred during unpaid leave when employees have babies or need to deal with a serious medical problem.

While the federal Family and Medical Leave Act allows employees to take up to 12 weeks off in a year with continuing health care coverage, that leave is unpaid.

Serrato is one of a number of Democratic lawmakers who sponsored a Senate Memorial during the 2022 legislative session that convened a task force to study potential legislation and make recommendations for enacting it.

In a text message, Serrato said she plans to join legislators in co-sponsoring a bill to make a paid family and medical leave act law in the 2023 session, which begins in mid-January.

Among other measures, task force recommendations include requiring employees to pay $5 for every $1,000 they earn in wages into the fund, while employers would pay $4 for every $1,000 they spend in salaries.

Employers with fewer than five employees — which make up almost 66 percent of all businesses in New Mexico, according to the task force report — would not be required to pay into the fund. However, their employees would. Only self-employed contractors would have the option of not paying into the fund.

A similar bill to enact such a law stalled in the 2021 legislative session, and the initiative likely will have to overcome opposition from businesses still reeling from the financial impact of the coronavirus pandemic.

Carla Sonntag, founder of the New Mexico Business Coalition, served on the task force and said many members of her group "are adamantly opposed to it."

She said most, if not all, of those members provide sick leave, maternity leave and other leave options for their employees and the proposed legislation is "another government intervention that is not welcome."

Rob Black, president and CEO of the New Mexico Chamber of Commerce, also served on the task force. He said while the chamber supports paid family and medical leave, he believes it should be primarily employee-funded. Employers have to incur additional expenses paying for replacement workers for those who take leave as it is, he said.

"Employers are going to be concerned about a new burden and cost on their businesses being put on them by the state," Black said. "I think there will be a lot of concern and anxiety about what this will look like."

Advocates for such a bill counter it will protect workers, increase morale and cut down on the number of workers who leave the workforce on disability because they cannot otherwise deal with serious health issues.

Jacob Vigil, senior research and policy analyst for the nonprofit advocacy group New Mexico Voices for Children, said paid leave offers workers stability and leads to "more loyalty to employers."

The proposed act, he said, is "one of several smart policies that provide the ability for families to have job security and cultivate relationships and care for loved ones."

Tracy McDaniel, policy advocate for the Southwest Women's Law Center, said employees should "be able to take [paid] leave when they need to."

She told lawmakers on the committee while the U.S. does not yet have a paid family leave act, 11 states and the District of Columbia have initiated them.

The task force report says the state Department of Workforce Solutions would administer the program at an estimated yearly cost of about $36.5 million. The fund itself could grow up to more than $470 million by 2026, with disbursements from the fund topping $439 million.

Assuming the bill became law at the start of the next fiscal year on July 1, the task force report recommends giving the Department of Workforce Solutions through 2024 to hire staff, set up systems and issue rules for the new program. The report says employees and employers could start making contributions in January 2025, with the first claims being received in January 2026.

Employees would have to contribute to the fund for at least six months before they could make a claim for paid leave. The paid leave payouts would be determined by a worker's salary and contribution. The report estimates the state would receive more than 35,000 eligible claims per year, with the average weekly payout for those claims hitting the $871 mark in 2026.

More than 880,000 New Mexico workers would be eligible for paid leave, if it becomes law, according to the task force report.

Sen. Carrie Hamblen, D-Las Cruces, who chairs the Economic Development and Policy Committee, cautioned lawmakers and advocates who support the proposal to do what they can to educate businesses about the plan before the legislative session.

While the plan could benefit employers, she said many are "one catastrophe away from closing" and will want more specifics about the legislation's effect on them.