Julia Munsey, Maine State Chamber of Commerce
June 9, 2023
Commentary: Proposed paid leave bill needs changes to be workable and sustainable
By Julia Munsey, Maine State Chamber of Commerce, and Curtis Picard, Retail Association of Maine
"We are concerned that LD 1964 runs the risk of hindering small business growth by discouraging businesses from growing beyond 15 workers."
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Our organizations are concerned about a bill before the Maine State Legislature that is arguably the most important workplace policy proposal in Maine in decades.
The bill, LD 1964, “An Act to Implement the Recommendations of the Commission to Develop a Paid Family Medical Leave Benefits Program,” twice amended, will soon be voted on by the full Legislature. While our associations support paid family and medical leave (PFML), we oppose this bill, as do numerous businesses and business organizations who also testified against it in May at the public hearing before the Legislature’s Labor and Housing Committee.
Our reasons for opposing this bill are many, including its unknown cost to employers, unknown cost to administer, the new payroll tax it requires for employees and many employers, and because of the new burdens it would impose on Maine’s employers and workforce.
We also are concerned that Maine lawmakers are poised to vote on a massive new program, one that will impact every employer and worker in Maine, without knowing what the program will cost. Best estimates are $300-$350 million annually, but no actuarial study of the most recent version has been conducted.
We also are not certain of the structure of the wage tax on employers and employees, whether the wage tax split will be 50/50, or what the tax amount will be going forward. Currently, the proposal caps the total wage tax at 1%, yet allows for potential tax increases every year. While it appears that businesses with fewer than 15 employees will not be required to pay this tax, their employees will pay a premium.
File photo / Tim Greenway
Curtis Picard, Retail Association of Maine.
The added burden on Maine’s smallest businesses is also concerning. They currently are exempt from family medical leave requirements. LD 1964 changes that, and mandates participation for even the smallest employers. Employers and employees would inevitably have to manage with fewer staff and take on more work in the absence of a co-worker on leave for up to 12 weeks. Employers would not only continue to pay benefits to the employee on leave, but also wages and benefits for the employee hired to fill in, if one is found.
This bill would make Maine an outlier as the only Northern New England state to require employers to contribute through taxes to the entire program. And Maine’s program would offer among the most generous benefits in New England. Although private plans are authorized under this proposed bill, they must be substantially equivalent to the minimum standards of the state-based plan.
We also are concerned that LD 1964 runs the risk of hindering small business growth by discouraging businesses from growing beyond 15 workers.
Our organizations and others offered several options during the public hearing that would provide for a more workable paid family medical leave program, one that works for both employees and employers. Unfortunately, those suggestions were rejected by the sponsors, advocates and the committee. The concerns we expressed on behalf of the business community were not included.
Our efforts on behalf of Maine’s business community and workforce continue. A proposal as important as this – one that seeks to create a statewide mandatory program that will impact every Maine business and employee – must be affordable, sustainable and workable for employees and employers. We also should know what it costs.
The Labor and Housing Committee has indicated they will have a final review of the bill’s language prior to it being sent to the Legislature for a vote. We encourage you to contact committee members, your legislators, and the governor’s office to weigh in on this important and impactful proposal.
Together, we want to find a compromise that works for all.
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