Paid family leave bill advances after committee endorses compromises

A plan to create a mandatory paid family and medical leave program in Maine passed out of a legislative committee Thursday on a straight party-line vote, setting up additional debate and votes in the days ahead on one of Democrats’ top priorities this session.

Although the bill was revised to address concerns raised during a public hearing last week, its passage remains tenuous. Many in the business community have warned that a mandate could be costly, and Gov. Janet Mills has yet to offer her support for the proposal. With few Republicans likely to support the bill, a veto by Mills could doom the plan.

Still, Sen. Mattie Daughtry, D-Brunswick, who co-sponsored the legislation with Rep. Kristen Cloutier, D-Lewiston, said she and others worked hard to assuage fears.

“Everyone agrees there is a need, it’s just a matter of how best to get there,” Daughtry said Thursday prior to the Labor and Housing Committee’s vote. “We tried to take a lot of what we heard and create something that answers (concerns) while still creating a strong program.”

Many details of the program ultimately would be ironed out during a rulemaking process if the bill passes, but under the amended language, L.D. 1964 would impose a payroll tax of between 0.7%-1% of wages, split evenly between employer and employee. That works out to a little less than $5 per week for someone making $50,000.

The program would replace up to 90% of wages for a maximum of 12 weeks of leave for reasons that could include caring for a new baby or a family member with a medical condition. The benefit amount would be equal to 90% of a worker’s wages for income earned up to half of Maine’s weekly average wage, which is currently $1,036. For income earned above that amount, the payout would be 66% of wages, down from 75% in the original draft. The maximum weekly benefit amount would be set at the state average weekly wage, down from 125% of the average in the original draft.

Employers that offer comparable plans could opt out of the program and businesses with 15 or fewer workers would be exempt from paying into it, but most employees, including part-time and self-employed workers, could still claim benefits.

Republicans on the labor committee said they agreed with a paid leave program in principal but balked at the mandate and the potential cost. Sen. Matthew Pouliot, of Augusta, said he didn’t see the proposal as “sustainable” for Maine.

Daughtry, however, disagreed.

“This bill is not just well-intentioned, it’s well-researched,” she said. “We really dug down to come up with a model that works for Maine.”

Already, 14 states have some version of a paid family leave program. Of those, only two are considered voluntary – New Hampshire and Vermont – and they are still new.

Asked where Mills stood as of Thursday, her spokesman, Ben Goodman, would say only that the governor appreciates the committee’s work and “looks forward to reviewing the changes they have adopted.”

Last week, during the public hearing, an administration official expressed concerns about making sure eligibility standards were sufficiently tight and reducing pay somewhat for those who qualify for leave.

ELIGIBILITY, BENEFIT CONCERNS ADDRESSED

Both of those concerns were addressed in the revised bill presented Thursday, as was a suggestion that language be included to ensure employees who were just hired could immediately request leave. Under the revision, they would need to wait at least 120 days.

If the proposal is adopted, employer and employee contributions would start on Jan. 1, 2025, and processing of claims would start one year later.

The actual cost of implementing the program is still unknown, but it would be likely tens of millions of dollars. That uncertainty was the biggest reason for Republican opposition in the committee hearing Thursday. The bill caps the payroll tax at 1% (it could be lower), but some feared that the actual cost of the program could exceed the revenue coming in, leaving the state with an unfunded mandate.

“I want to get to yes, in all honesty, but what I’m hearing is a tremendous amount of unknowns,” said Rep. Gary Drinkwater, R-Milford. “For that reason, I cannot support it.”

The program, as envisioned, would be state-run and would lead to an estimated 40 new positions to oversee it, although that number could be less.

Daughtry made clear that the rulemaking process would ultimately determine final details. She also said there are oversight provisions written into the bill.

“We want the most robust oversight system anywhere,” she said.

During last week’s public hearing, business advocacy groups, including the Maine State Chamber of Commerce and Hospitality Maine, opposed the bill as a burden on employers. They suggested creating a plan that would require no new taxes on employers.

Following Thursday’s committee vote, the bill now heads to the full House and Senate, where additional debate is likely.

If the bill fails, the Maine People’s Alliance, a liberal advocacy group, and the Maine Women’s Lobby have gathered enough signatures to put it on the ballot. The groups held off submitting petition signatures this year to see what the Legislature might do.