State Paid Leave Mandate

MINNESOTA CHAMBER of COMMERCE STATE PAID LEAVE MANDATE The Minnesota Legislature is currently considering a new statewide requirement which would impose a brand-new payroll tax on employers and employees in Minnesota to fund a new paid leave entitlement. This proposal, SF 2558, Senator Sieben, would: • Apply to employers with 21 or more employees. • It will be financed through a payroll tax, which is undefined at this point. • Create a brand-new state-run trust fund and administrative bureaucracy paid for with the payroll tax. Using the unemployment insurance program as a guide, the paid leave program would likely require 400 state employees and cost more than $100 million/year in administrative costs. • Employees could draw on the fund for a total of up to 12 weeks per year to cover family care leave, bonding leave, or pregnancy leave. • Employers could opt out only if they prove to the state that they provide the same level of benefits. Employers would have to retain their records for 4 years and be subject to an audit. • While an employee is on leave, the state-run fund would replace his/her wages on a graduated basis. For an employee’s wages between $0/week and $494/week, the state would replace 80%. For wages between $494/ week and $988/week, the state would replace 66%. For wages above $988, the state would replace 55%. • This benefit would go well beyond federal Family Medical Leave Act requirements and national norms. It is the most far-reaching paid leave proposal in the country. Only a handful of other states have mandated paid leave plans, and this proposal would be more expensive in a variety of ways. In those other states, the family leave program replaces 55%-66% of an employee’s wages for 4-6 weeks. Disability programs with longer leave periods tend to have programs funded 100% by employee contributions. Those states built their programs on existing state operated disability insurance programs, which Minnesota does not have. The Minnesota Chamber opposes this proposal. Instead, we support giving employers the flexibility they need to offer a leave program that works both for the employees and the employer, and doesn’t diminish other benefits already offered (such as paid time off, paid sick time, short term disability and/or health care coverage). Minnesota employers are already known for providing great places to work. With 3.7% unemployment in Minnesota, employers already have market pressure to offer competitive benefit packages that will attract and retain talent. In fact, by the bill advocates’ own data, 72%-77% of these leaves in Minnesota are already compensated in some way. This one-size-fits-all government mandate is an unnecessary intrusion into the employer-employee relationship. ____________________________________________________________________________________________ Questions? Contact: CAM WINTON, Director, Energy and Labor Management | 651.292.4663 | [email protected] Finance Committee, Natural Resources, Economic Development, and Agricultural Budget Division Richard Cohen (DFL) 651-296-5931 www.senate.mn/senatorcohenemail Bobby Joe Champion (DFL) 651-296-9246 [email protected] Michelle L. Fischbach (R) 651-296-2084 [email protected] Bruce D. Anderson (R) 651-296-5981 [email protected] Terri E. Bonoff (DFL) 651-296-4314 [email protected] D. Scott Dibble (DFL) 651.296.4191 www.senate.mn/senatordibbleemail Bill Ingebrigtsen (R) 651.297.8063 [email protected] Ron Latz (DFL) 651-297-8065 www.senate.mn/senatorlatzemail Warren Limmer (R) 651-296-2159 [email protected] Tony Lourey (DFL) 651-296-0293 [email protected] John Marty (DFL) 651-296-5645 www.senate.mn/senatormartyemail Jeremy R. Miller (R) 651-296-5649 [email protected] Scott J. Newman (R) 651-296-4131 [email protected] Sean R. Nienow (R) 651-296-5419 [email protected] Sandra L. Pappas (DFL) 651-296-1802 www.senate.mn/senatorpappasemail John C. Pederson (R) 651-296-6455 [email protected] Tom Saxhaug (DFL) 651-296-4136 [email protected] Katie Sieben (DFL) 651-297-8060 www.senate.mn/senatorseibenemail LeRoy A. Stumpf (DFL) 651-296-8660 www.senate.mn/senatorstumpfemail David J. Tomassoni (DFL) 651-296-8017 www.senate.mn/senatortomassoniemail Torrey N. Westrom (R) 651-296-3826 [email protected] Charles W. Wiger (DFL) 651-296-6820 www.senate.mn/senatorwigeremail.

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