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Minnesota Republicans pitch paid family and medical leave plan

(The Center Square) – Two Minnesota lawmakers pitched a plan for more employers to offer paid family and medical leave. 

Sen. Julia Coleman, R-Waconia, and Rep. Jordan Rasmusson, R-Fergus Falls, introduced Senate File 3885 that aims to provide tax incentives to businesses that offer paid family and medical leave plans to employees for painful times, such as when a parent or child dies.

“We have heard from Minnesotans about the need to ensure more Minnesotans have access to paid family and medical leave. Businesses want to offer their employees more, and families need more help. Our proposal meets both needs,” Coleman said. “It will expand the availability of paid leave across Minnesota, particularly for those who work for small businesses. Businesses can provide a competitive benefit that suits their workforce, and families will have more options to care for their loved ones in a time of need.”

The proposal is two-pronged. It seeks to create an insurance product to provide paid family and medical leave insurance. Currently, this product is not allowed under Minnesota law and businesses self-finance their paid family and medical leave offerings. The bill aims to create a product more attractive to businesses and more flexible for families.

Second, it aims to provide a tax incentive to businesses with fewer than 50 employees to offer paid family and medical leave. The bill caps program costs at $50 million in tax credits, but that ceiling could expand later if more businesses participate. Businesses would receive a tax credit of up to $3,000 per employee enrolled.

The bill authors say this option would provide businesses and insurers the flexibility to develop customized products, which would help small businesses compete with bigger businesses to attract and retain workers.

“Our tax credits are significant enough that it will enable companies with fewer than 50 employees to access this benefit,” Coleman told reporters. “They want to offer this benefit, but it’s expensive and it’s hard to do.”

Small businesses employ nearly half of all working Minnesotans, and many have struggled to finance a paid leave benefit for their employees.

“One of the strongest features of this program is that it is flexible and helps private businesses do what they do best. We don’t need a new government bureaucracy financed by a large tax increase accompanied with stringent mandates and penalties to provide paid leave,” Rasmusson said. “More Minnesotans will have paid family and medical leave if we work together to get this done.”

The Minnesota Department of Employment and Economic Development (DEED) says about 174,000 (95%) of businesses have up to 49 employees

There are 927,000 employees (40%) working at businesses with up to 49 employees.

The lawmakers said a similar plan passed chambers in Virginia and New York.

Rasmusson said the GOP plan differs from the DFL paid family leave plan, which includes 12 weeks paid leave via a state-run system funded by increased payroll taxes instead of a private option. In the DFL program, the cost would be shared between employers and employees, funded via payroll deductions. Employers and employees could split the costs evenly, with each paying about 0.3% of their payroll.

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