Vermont Business Magazine In a 7-4 party-line vote today, the House Committee on General, Housing, and Military Affairs voted favorably to advance H196, a bill that would create a family and medical leave insurance program. The program would provide up to 12 weeks of paid leave to cover a worker’s absence for a qualifying condition, including to care for a new child, a seriously ill loved one or themselves. Governor Phil Scott, however does not love the bill because it pays for the $80 million benefit with what the governor calls a payroll tax.
As passed out of the committee, the bill eliminates the payroll tax and and funds the insurance program through a .93 percent income deduction, with the option for the employer to contribute to the cost. It would provide 100 percent wage replacement, for up to 12 weeks, capped at two times the livable wage, which is equivalent to about $1,000 per week.
“Our conversations with businesses across Vermont have shown that employers see this as a major benefit to their business and want to be able to contribute to the premium. For many employers, this is not a benefit that they can afford to provide on their own,” said Lindsay DesLauriers, Director of the Main Street Alliance of Vermont. “Giving all working Vermonters access to this program levels the playing field for Vermont small businesses who often struggle to provide the robust benefit packages that larger corporations are able to provide to their employees.”
Governor Scott’s Communications Director Rebecca Kelley issued the following statement later Friday:
“Today, the House Committee on General, Housing and Military Affairs voted the Paid Family Leave bill (H.196) out of Committee by a vote of 7-4. That bill establishes a Family Leave Insurance Program that is funded by a nearly 1 percent increase in payroll taxes on all Vermont employees, raising $80 million annually from working Vermonters.
“We all agree with a goal of providing more benefits and higher wages to workers, but today the House Committee tried to do that in a way that ultimately costs Vermonters more money and hinders economic growth – the exact opposite of their stated goals.
“While we face an annual State budget gap, and with uncertainty about future Federal funding, this program will cost the State an estimated $2.5 million in appropriations and up to $17 million in lost productivity, according to testimony from the Vermont Department of Human Resources.
“At a time when we are losing an average of six workers from our workforce per day, mandates from Montpelier that make Vermont less affordable are the wrong approach. The bottom line is working Vermonters cannot afford for state government to take more of what they earn.
“Governor Scott has made clear that Vermonters need state government to prioritize policies and initiatives that will grow the economy, reverse declining workforce trends and create more jobs, and that is what he is committed to doing.”
The bill is expected to head to the House Committee on Ways and Means.
Source: Main Street Alliance of Vermont 3.17.2017