ST. PAUL – House Democrats approved legislation Tuesday which Rep. Shane Mekeland, R-Clear Lake, 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.
“This bill is going to impact small businesses and workers at a time record inflation already has their finances going backward,” Mekeland said. “This would make things even worse, hurting employee wages and causing serious problems for employers, the vast majority of whom already are accommodating workers as much as possible to ensure they keep good help on board during this workforce shortage.
“The Minnesota Chamber of Commerce reports 80 percent of their members already provide paid family leave, but this bill takes a one-size-fits-all approach by placing mandates on all of our businesses instead of providing flexibility to help particular situations. It’s more bureaucratic overkill from House Democrats.”
Mekeland 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, Mekeland 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.
“I also have huge concerns about the potential for this program to bring even more fraud to our state at a time examples of taxpayers being swindled continue surfacing,” Mekeland said. “This bill had no guardrails whatsoever as it came to the floor. At least House Republicans were successful in amending the bill to ensure fraudulent acts are treated as crime. I would prefer we have mechanisms to prevent fraud from occurring in the first place, but the majority was unwilling to include such provisions.”
Meanwhile, Mekeland 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.
Mekeland 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 was offered as an amendment to the Democrat bill on Tuesday. House Democrats voted down that offering before approving their own bill, sending it to the Senate for action.
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