ST. PAUL – House Democrats approved legislation Tuesday which Rep. Dean Urdahl, R-Acton Township, said will hurt employee wages and damage businesses by establishing a mandatory paid leave program funded by a new tax on employers and workers at a time the state has a $17.5 billion surplus.
“State government does not need to mandate new benefits and taxes on every resident and business when that relationship belongs to the employer and employee,” Urdahl said. “The Minnesota Chamber of Commerce reports 80 percent of its members already provide paid family leave but this bill takes a one-size-fits-all approach. This is not the way to help address those outlier cases and it will cause serious strain on our communities in Greater Minnesota.”
Urdahl said the program (H.F. 2) would cost billions of dollars to get up and running and require as many as 400 new full-time government employees to develop and administrate. He added the program applies to virtually every industry in the state – private employers, nonprofits, cities, counties, and school districts – despite objections. It would be funded with a $2.9 billion tax on employers and employees and expands employers’ leave obligations to part-time and temporary employees.
Unlike the Federal Family and Medical Leave Act, which only applies to employers with 50 or more employees, Urdahl noted this program would apply to all employers including those with only one employee. Employees can stack leave together, allowing for up to 24 weeks of paid time off per year.
On the other hand, Urdahl indicated Republicans have developed a plan which takes a different approach, providing a small-business tax credit to incentivize employers to join the plan. The key difference, he said, is the minority’s plan provides paid family and medical leave benefits for employees without job-crushing mandates and new taxes.
The House Republican proposal provides a small business tax credit to incentivize employers to join the plan. Minnesotans may opt into the program for $5 per week if an employer does not join by using the parameters of the state’s paid leave policy, leveraging the power of the state’s 10s of thousands of employees.
“Workers who are pleased with their current employer-provided benefits can keep them without being forced to enter a government program,” Urdahl said. “The House Republican approach is more flexible without the added mandates and tax increases of the House Democrat plan.”
Urdahl also indicated the House Republican option is backed by an insurance company, so taxpayers will not be expected to cover the costs of program shortfalls or losses. Benefits would be available to Minnesotans this Jan. 1 – a full 18 months earlier than the House Democrat proposal.
The House Republican plan also was offered as an amendment to the Democrat bill. House Democrats voted down that offering before approving their own bill, sending it to the Senate for action.
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