The need of parents to bond with a newborn, or a son or
daughter to tend to an ill elderly parent, or any number of similar situations can
have an impact on a person’s ability to stay on the job. These situations not only impact our
work-life balance but can also cause significant financial impacts as
well. Providing Vermonters with the
ability to take time to care for themselves and their loved ones will support
people when they need it most and build a foundation for future generations to
thrive.
The Federal Family Medical Leave Act ensures certain rights
for workers to take time off to care for family members when necessary but does
not provide for financial assistance to do so. However, there is a need in
today’s economy for such a benefit. A majority of Vermont businesses are small
and employ a significant percentage of the workforce. Yet these are the very
businesses that struggle to provide robust benefit packages to their employees
and struggle to retain the workers who leave to work for larger companies that
can. Vermont small businesses
overwhelmingly support the creation of a strong, universal family and medical
leave insurance program. Recognizing this, the Vermont House passed the Paid
Family Leave Insurance (PFLI) bill (H.107) last week on a 92 to 52 vote.
Governor Scott supported a PFLI program in partnership with
New Hampshire that would apply to state employees and to any employers that chose
to opt into the program. However, the legislature considered this option and
concluded that there were several drawbacks. First, a voluntary program would
not cover all employees unless their employers opted in. Second, fewer
participating individuals would mean higher premiums and higher risk. Third,
the wage replacement benefit of 60% would represent a substantial pay cut.
As passed H.107 is an insurance program that allows an
employee to take time off for an eligible reason without a significant loss of
income. A person is eligible for the benefit if
a) they earned wages during six
months of the last 12 months; and
b) they earned an amount equal to 1,040 hours
times the minimum wage.
The benefit would be 90% of an employee’s average
weekly wage up to $533 per week and 50% of the excess above that amount up to a
maximum of $1,334 per week. The leave duration would be up to 12 weeks for
parental bonding or up to 8 weeks of their own medical leave or family care
leave with no more than 12 weeks in a 12 month period.
The insurance premium would be a payroll deduction on wages
up to the Social Security maximum ($132,900 in 2019) at a rate of 0.10% of
wages for the first six months and 0.55% afterward. For a worker making minimum
wage, the premium would be about a penny an hour rising to 5 and a half cents
per hour after six months. For someone making $50,000 per year, the cost would
be $50 rising to $275 for the year. The employer has the option of paying none,
some, or all of the premium for the employee. The state will seek to contract
with an insurance carrier to run the program, which is similar to the
Governor’s proposal. Several insurance
carriers have expressed an interest in doing so. Companies that offer similar benefits that
are as good or better than the state program can opt out, and their employees
will not be subject to the premium withholding; or they can opt in and replace
their program with the state program. The bill now moves to the Senate for
review and possible amendment.
