Among the growing number of issues headed for a showdown between Democratic legislative leaders and Gov. Chris Sununu this session, perhaps none is as cut-and-dried as family leave for workers. Making its way through the Legislature is Senate Bill 1 — not incidentally given that number, as it was the first priority of Democratic legislators when they took control of the House and Senate in November.
The bill would charge a 0.5 percent tax on payroll for businesses that don’t opt out — which they can do only if they offer a similar plan themselves for their workers. The money would go to the state Labor Security Department, which would administer the plan as it does unemployment insurance. Once vested, workers could take up to 12 weeks off for qualifying events, at 60 percent of their pay. Qualifying events would include the birth or adoption of a child, having to care for a family member, to get addiction treatment or having an illness or injury that prevents them from working.
In perhaps a pre-emptive effort, Sununu unveiled his own leave plan, jointly with Vermont Republican Gov. Phil Scott, that would begin with a base of state employees. It would offer up to six weeks off, include only businesses that opt in, and be administered by a private insurance provider.
The best that can be said for the governors’ Twin State Voluntary Leave Plan is that it improves on the nothing that’s in place now, and would spread the risk pool for businesses that participate by beginning with 18,500 state employees as a base.
Beyond giving businesses the option to ignore the effort entirely — pretty much as they now can choose not to allow workers paid leave — the governors’ plan could fail to protect workers in other ways. No insurer has been selected yet, but when the states requested information from insurers on how they would administer such a system, the responses were less than encouraging. Not only did none commit to a price point, but they also talked about provisions such as “age bands” — which could be used to hike rates on the employees most likely to take advantage of the benefit, such as women of child-bearing age — and excluding pre-existing conditions as qualifying for the program.
Overall, there’s no question the Senate bill is a better plan for workers, offering a longer leave, for more varied reasons, and leaving private, profit-driven, insurers out of the mix. It’s based on plans already operating in several states.
The biggest questions regarding SB 1 involve the cost and whether it would be abused. The 0.5 percent payroll tax has been labeled an “income tax” by Republicans. In the sense that it is a tax that’s based on their income, that’s fair to a point. But note employers could pick up that cost for their workers, and in any case, it’s a “tax” that’s in exchange for a discrete benefit — just as unemployment insurance or health and dental insurance premiums.
One might ask how such a small amount would cover the cost of up to 12 weeks of pay at 60 percent for everyone. The answer is that not everyone would use it (though they could), and those who do may not use all the time allotted. Someone recovering from surgery, for example, would likely want to get back to earning 100 percent of their pay as soon as possible.
Sununu has previously referred to such provisions as “paid vacations,” as if anyone could simply take weeks off simply because they felt like it. One local Republican lawmaker dismissively asked whether workers could take time off to care for a family member “suffering from a hangnail.” Insults aside, workers would actually only be able to use the paid leave if their circumstances meet federal Family and Medical Leave Act guidelines.
For decades, conservatives have held forth that the way to grow the economy is to put (or keep) more money in the pockets of the wealthy and corporations, their so-called job creators. But that trickle-down theory has yet to hold up, as the rich tuck away their tax savings and profits, and businesses have largely put leftover money into the wallets of investors and executives rather than increasing wages, hiring or expanding benefits.
Conversely, benefits such as paid leave help firms retain workers, which is less costly than replacing them, and attract new workers, which is particularly needed in places like New Hampshire, where there are more jobs than skilled employees to fill them. And employees that don’t have to worry as much about taking that time off are more productive and less stressed, studies show.
We don’t believe Sununu will buy into any of these arguments, meaning SB 1 is likely headed for a veto and override vote. If that point arrives, lawmakers would do well to remember the consistent failings of trickle-down economics and choose instead to try this “trickle-up” option.