Rep. Ruth Richardson (DFL-Mendota Heights) believes there are moral, health, safety and economic imperatives for our state to implement a paid family and sick leave program.
“No one should have to choose between a paycheck or providing for themselves and their family,” she told the House Workforce Development Finance and Policy Committee on Wednesday.
Richardson sponsors HF2, which would establish a state insurance program to provide Minnesota workers with up to 12 weeks of paid family leave and up to 12 additional weeks of paid sick leave per year.
The committee approved the bill as amended by a 7-5 vote and sent it to the House Judiciary, Finance and Civil Judiciary Committee.
Benefits are available to an employee who is unable to work due to the serious medical condition of a family member, a qualifying condition, safety leave, bond leave, or the employee’s own pregnancy, convalescence, or serious medical condition.
“Working people’s needs for family leave and sick leave are universal,” Richardson said. “Unfortunately, in Minnesota, only an estimated 13% of workers have access to paid family leave from their employer to care for a new child or a critically ill family member.”
House Workforce Development Finance and Policy Committee 1/25/23
Richardson said the legislation is necessary because current furlough programs are inconsistent and there are disparities between those who have access to furloughs and those who don’t.
It’s ironic, she said, that high-income people, who work for big companies and are better able to weather a financial crisis, are more likely to have employer-paid vacation plans, while low-income people, who are just a paycheck from financial devastation, do do not do.
The bill would create a self-funding account for family and health insurance benefits modeled on the state’s unemployment insurance fund.
Initially, the bill would provide $1.7 billion in seed capital for the account in fiscal 2024, before monies collected from employers and employees via a new tax would fund the account.
The monies paid into the state fund by employers and employees would vary depending on the salary of the employee. For example, someone making $52,000 a year would deposit $3.50 every week.
Holiday pay would not be tied to a specific job or employer, which would be particularly helpful for self-employed or gig workers who might choose to participate in the program.
This opt-in option would be very helpful for many Minnesotans, said Amy Schultz of Minneapolis.
“As a self-employed person today, I don’t have a safety net,” she said. “If I have to take time off to care for myself or a family member, or if there is a major medical emergency, it could push me into poverty.”
Employers could introduce private plans and would not have to pay premiums into the state scheme. However, private plans would need to meet or exceed the same rights, protections, and benefits provided to workers under the state plan.
Furlough schemes would be administered by a new Family and Health Insurance Department within the Department for Employment and Economic Development. The benefits would be available from July 1, 2025.
Commissioner Steve Grove said the legislation is both business- and worker-friendly and would help reduce labor shortages by enticing workers to move into the state.
“We see this as an exceptional tool for economic development,” he said.
Some business association witnesses said the plan is too onerous for small employers who may not have enough staff or be able to quickly hire new staff to meet the duties of employees taking paid leave.
This problem is particularly prevalent in the construction industry, said Stephanie Menning, executive director of the Minnesota Utility Contractors Association.
“Minnesota has two seasons, winter and construction,” she said.
If a construction worker is unemployed for the proposed 24-week maximum, it would eat up Minnesota’s entire summer construction season, she said.
Republican objections were spelled out in five unsuccessfully offered amendments:
Rep. Dave Baker (R-Willmar), who offered to change the actuarial analysis, said it would be wise to have the bill’s financial details reviewed by an outside auditor to determine if it was truly self-funding and no longer state-funded Funds need future.
“If we don’t get the details right here, once that thing leaves the station, you can’t bring it back,” he said.
Richardson is open to such consideration in the future, but declines to delay the bill to that end now. “We would continue to deny and delay benefits to Minnesotans that would further disrupt those already injured.”