The Paid Family and Medical Leave Insurance, a priority for legislative leadership, is already sitting in conference committee, before the first week of the Vermont 2020 Legislative session is over! As with all bills, there needs to be agreement between the Senate version and House version before sending the proposal along to the Governor for his signature to make it become law.
The intent of the bill is to provide leave from work for Vermonters to care for a new child, sick family member or the worker’s own medical needs. In addition to the House version and the Senate version of Paid Family and Medical Leave, Governor Scott has his own version of the proposal. It will be very interesting to see how this turns out.
Here’s the general idea:
- Twelve weeks of parental time for a new child, up to 12 weeks per parent, but no more than 16 weeks per couple.
- Eight weeks of family care time for other than a new child (spouse, elderly parent, older child)
- Six weeks medical leave for employee
- The employee would be paid roughly 90% of the average weekly wage, but no more than $964 per week.
Where would the money come from to pay workers on leave?
There would be mandatory payroll tax collected from all Vermont workers at a rate of 0.20% on wages up to $137,000, beginning very soon, possibly by April 1, 2020. The legislature can change the rate annually. Witholding would start April FY20 and Benefits would start October FY20. The most recent estimates I have seen show this rate of 0.20% would raise $29 million in FY21, the first full year of the program. The state would hire an insurance company to run the program, or if the state can show a way to do the job cheaper, then the state would run the program.
If desired, the employer can give money to the employee to pay all or part of the amount due, but of course that would be additional taxable income. Or the employer could just pay the entire amount due himself. The employer is responsible for making sure this withholding is paid to the state and for filing all required forms.
The Commissioner of Financial Regulation, Commissioner of Labor, and Commissioner of Taxes will create all the rules for filing and eligibility. Employers who already allow this time off can continue.
This is a rough description of the proposal that now sits before the conference committee.