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MN GOP Bill Proposes Paid Leave Via Private Insurance, Tax Credits For Small Businesses

ST. PAUL, Minn. (WCCO) -- Republican-backed legislation would authorize insurance companies to offer paid family leave in Minnesota and would provide tax incentives to small businesses to give employees those benefits as companies struggle to recruit talent and fill open positions.

"Businesses will be able to offer a competitive benefit that suits their workforce and families will have more options to care for their loved ones in a time of need," said Sen. Julia Coleman, R-Waconia, the bill's author.

An insurance product for paid family leave is not currently available under Minnesota law and businesses that offer the paid time off to recover following childbirth or care for an ill family member self-finance that benefit, she said. Employers could purchase the paid family leave insurance and cater the policy as they see fit.

There would also be $50 million in tax credits available, up to $3,000 per employee, to offer an incentive for small businesses with 50 or fewer employees to offer the leave and cut costs. She later said that's a "starting point."

"It can be written with workforce in mind and can be done without setting up a huge new bureaucracy in state government," Coleman said. "It is the simplest and fastest way to increase the number of employees with access to paid family leave."

The proposal from Republicans is in response to a years-long push by DFL lawmakers to approve a paid family and medical leave program run by state government, similar to the unemployment insurance program. The Democrat-led proposal would spend $1.7 billion to cover costs for the first two years and it would be funded by a payroll tax on employers thereafter.

That plan allows up to 12-weeks of benefits on a sliding scale and covers a wider range of needs, including caring for a family member with a serious health condition; bonding with a new child; pregnancy; the worker's own health; safety leave for victims of domestic abuse; and leave for when a family member is called to active duty in the armed forces.

Coleman criticized that approach as "one size fits all." Her bill would authorize private insurance plans covering childbirth, adoption, the placement of a foster care child in an employee's home, and caring for a sick family member.  She pointed to similar legislation that passed with bipartisan support in Virginia as a model, though noted Minnesota would be unique with the tax credit structure.

But the narrower scope of the proposal is prompting calls from Democrats that it falls short.

"It's a cumbersome workaround to try to pretend like we're addressing a very real issue without actually providing the type of benefit and support that families need," said Sen. Susan Kent, DFL-Woodbury, who's leading the DFL proposal. "Republicans keep coming forward with these symbolic gestures that do not solve the problem."

report funded by the legislature in 2016 found almost three-quarters of Minnesota workers receive at least some pay when they were out of work for family or medical reasons, but access to pay during leave is unequally distributed.

About one quarter of all family and medical leaves are without any wage replacement, the report said, but low-wage workers, Black, Hispanic, younger, and less-educated workers are more likely to receive no compensation.

Fourteen states plus D.C. and 20 localities have laws requiring covered employers to provide eligible employees paid time off for their own illness or to care for sick children and nine states have paid family and medical leave laws, according to the Kaiser Family Foundation.

Sarah Piepenburg, who owns cooking product store Vinaigrette in Minneapolis, fought for paid leave for a former employee when she suffered from an injury. She struggled to afford it as a small business with just two employees.

At the capitol on Monday, she testified against the Republican proposal, saying she believes it wouldn't drive down costs and make leave more affordable.

"It doesn't give me as a small business owner or Minnesotans without paid leave or medical leave what they're looking for," she said. "I can't afford a paid leave policy even if you give me the $3,000 tax credit. It's not going to allow me to get into that game."

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