State’s budget surplus could fund start of paid leave program

Minnesota’s projected budget surplus could offer an opportunity to get a paid family leave program up and running.

Rep. Ruth Richardson (DFL-Mendota Heights) sponsors HF1200, as amended, that would establish a state-run insurance program to partially reimburse lost wages for workers taking medical or family leave. The bill would appropriate $1.7 billion from the General Fund to pay costs for the first two years.

The House Workforce and Business Development Finance and Policy Committee laid over the bill Monday. The companion, SF1205, is sponsored by Sen. Susan Kent (DFL-Woodbury) and awaits action by the Senate Labor and Industry Policy Committee.

Modeled after the state’s unemployment insurance fund, the program would allow up to 12 weeks of paid leave to care for a family member and 12 weeks for employees with a serious medical condition. It would offer partial wage replacement when people take time away from work for life events, such as the arrival of a new child or cancer diagnosis.

Workers would start receiving benefits on Jan. 1, 2023, but employers would not start paying premiums until Jan. 1, 2024.

Rep. Ruth Richardson

COVID has shown inconsistencies and disparities in access to paid leave, Richardson said.

“It is likely no surprise that workers earning the lowest wages, Black and LatinX workers and women are the least likely to have access to paid leave programs,” she said. “The uneven safety nets that have been built for Minnesota families come at a cost.”

Data shows access to paid leave improves health for new parents, as well as reduces infant mortality, preterm and low-birthweight births, reliance on social services, nursing home placements, and employee turnover, Richardson said. 

Several of Monday’s testifiers are small-business owners who want to offer paid leave but cannot afford it without a program like the one proposed. Some in Alexandria offered paid leave for the first time during the past 24 months using federal Families First Coronavirus Response Act money, said Shannon Berns, president of Du Nord Consulting. 

“Family leave shouldn’t end with the pandemic,” she said. “It’s important to all – especially small business in Greater Minnesota.”

Other business groups object to the program as an unworkable, one-size-fits-all mandate that won’t reflect the needs of individual businesses, said Lauryn Schothorst, director of workplace management and workforce development policy at the Minnesota Chamber of Commerce. 

Kimberly Lewis, associate director of government relations with the Minnesota School Board Association, said districts worry about paying for the program through general funds, aligning the program with collective bargaining agreements and especially finding substitutes. 

Rep. Barb Haley (R-Red Wing) was concerned about using one-time funds for an ongoing program.

“This is a massive proposal,” she said.

Richardson said she and program supporters have had multiple conversations with large and small businesses across the state and remain open to more. They’ve also tracked how paid leave has been used with Minnesota businesses that offer it and how programs have worked in other states, giving confidence in their numbers for how much it will cost, she said.

“There have been a lot of conversations happening for years now,” Richardson said. “We’ve got an opportunity to think about how we are using our surplus to support businesses and to support families as well.”