A proposal that would create statewide paid medical and family leave for all employees and employers had its first hearing on Wednesday morning. The bill is similar to one that was presented in each of the last two legislative sessions.
Rep. Moffie Funk, D-Helena, presented House Bill 228, which would require employees and employers to contribute one half of one percent of the employee’s wages to go into a state fund that would then provide benefits to any person needing as many as 12 weeks off to care for a loved one, at the arrival of a new child, or to give medical leave.
“We speak frequently about building a strong workforce. Well, this bill does that,” Funk said. “It is aimed at keeping our children and grandchildren staying in Montana.”
More than a dozen people, including some small-business owners, testified in support of the bill while the Montana Chamber of Commerce and the National Federation of Independent Businesses opposed it.
Jennifer Clouse, who owns a small skin care business in Missoula, said she would love to offer her employees paid leave, but is too small.
“This sounds scary and expensive, but I have done the math, and it’s not,” she said. “I feel so strongly about this that I would pay my employer portion and my employees’ portion.”
Clouse told lawmakers that keeping great employees, offering competitive benefits and making sure they’re economically stable is worth the price.
She figured that her portion would be around $150 per month.
“That’s less than I pay to have my bathrooms cleaned,” she said.
Elisha Buchholz , the public policy coordinator at the Montana Food Bank Network, said that for families already living paycheck-to-paycheck, having to leave work to take care of a medical problem or a loved one can be the tipping point to personal disaster.
“A serious illness or a new child should not push a family into economic crisis or despair,” Buchholz said.
Brian Thompson of the Montana Chamber of Commerce said his organization was worried that it would create an entire new bureaucracy on the backs of already struggling business.
“This will be very difficult for small Montana employers,” Thompson said. He also worried about a cottage industry of professionals and advisors who will have to be hired just to make sure businesses don’t accidentally run afoul of the new law.
“We completely understand the need to take care of family,” said Ronda Wiggers of the National Federation of Independent Businesses. “But most find a way to work with their employees.”
She said that her organization is worried that if businesses pay in, but demand is too strong, there will be no payments, reduced benefits to employees or the rates will be raised.
“We just went out of our way to reduce the business equipment tax across the hall. And we’re working hard to reduce the personal income tax just a little, and this would take all of that back,” Wiggers said, referring to two other measures that lawmakers are discussing to lower taxes.
Heather O’Loughlin of the Montana Budget and Policy Center testified that the bill will actually help small businesses because, in the case of a family medical situation, the employee can take the time off and get paid while the business spends money on a temporary employee.
Even though some lawmakers appeared to have concerns about the fiscal note, Funk said the expenditure will be enough to get the program started and she believes that once in place, Montana businesses and workers will be much more stable, happy and productive.
“This is seed money,” Funk said.
The bill addresses the challenge of taking care of a loved one for medical reasons. The federal Family Medical Leave Act mandates that employers grant as much as 12 unpaid-leave weeks of job protection for a full-time employee in order to take care of a medical issue or care for a loved one. However, during that time, many employees drop out of the workforce, unable to pay bills. Many testified to the harrowing experience of loss of income. That’s where HB228 would come into play. It would provide as much as 100 percent income for as many as 12 weeks. Some employers offer this benefit, but many small businesses struggle to offer that, and struggle to keep people in the workforce.
The program would work by having employers and employees contribute as much as one-half of one percent of the wages to a large fund which would then be administered by the state. All employees would be eligible to use it for a qualifying event.
According to the fiscal note attached to the bill, which is designed to estimate costs in the future, setting up a new division under the Department of Labor during the next biennium would take more than $5.3 million and likely need to be allocated as new spending in the budget.
“I think this will be like kindergarten or full-day kindergarten,” Funk said. “It took a lot to get it passed, but now we just take it for granted.”