On March 4 and after 3 hours of contentious debate, the NM Senate voted 23-15 to pass Senate Bill 11 known as the Paid Family Leave and Medical Leave Bill. The legislation will create and fund a new state program that would make payments to employees who take time off for the birth of a child or to attend to serious medical situations for themselves or family members. Workers who qualify could take up to 12 weeks per year of paid leave.
Senate Bill 11 is sponsored by Albuquerque area Democrat and Senate Pro Tem Mimi Stewart. It was he Paid Family and Medical Leave Task Force with representation from advocacy groups, business owners and labor unions that met last summer and issued a final report in October. The task force drafted SB 11.
Senate Bill 11 was fiercely opposed by business groups and Republican legislators who described it as a tax on both workers and employers alike. The Senate’s 23-15 vote broke down mostly along party lines with all Republicans voting but with Democratic Sens. George Muñoz of Gallup and Daniel Ivey-Soto of Albuquerque joining with the chamber’s Republicans to vote in opposition.
The Senate floor debate lasted for more than 3 hours. Republican State Senator William Sharer of Farmington tried to amend the bill and offed two amendments. One amendment would give businesses the option to participate. The second amendment would reduce the amount of paid time off workers could take per year. The amendments were voted down on largely party-line votes.
Sharer said this during the debate:
“I think we ought to be careful before we take the big hammer and start bashing businesses.”
One amendment was approved during the Senates debate where employees would will have to provide a timeline for their return to work.
Senate backers of SB11 insisted it will bolster New Mexico’s economy and increase employee morale. Sen. Siah Correa Hemphill, D-Silver City duering debate recalled having to take unpaid time off from her job to care for one of her sons who was dealing with serious health issues. She said this
“This bill is going to give workers more dignity and control over their lives … This really is going to help provide financial security for families across New Mexico.”
Senate Democrats said the bill will help women remain in the workforce or find new jobs as data shows only 53.2% of New Mexico women age 16 and older held jobs over a recent five-year period. State Sen. Michael Padilla, D-Albuquerque, is a cosponsor of the bill. Senate Majority Whip Michael Padilla who is a business owner, said he got involved on the bill so he could be a voice for the business community. Padilla said the bill would bring 47,000 workers into the workforce if enacted. Padilla said this:
“This bill is going to bring workers back into the workforce. … It’ll expand payrolls, a stronger economy, reduce turnover costs, improve morale, employees will take fewer sick days and it will bring mothers back into the workforce. It’s an affordable program.”
ARGUMENTS MADE IN OPPOSTION TO ENACTMENT
Republican Senators maintained that the bill will hurt small and medium-sized companies, particularly those operated by local entrepreneurs. State Senator Mark Moores, R-Albuquerque, said this:
“A medium-sized business like ours, it’s especially difficult. … I don’t know how a small business in New Mexico can do it. Only large corporations can do it with sophisticated H.R. departments. They can transfer resources, move employees. Being able to do this for a small employer is incredibly difficult.”
Last year, the New Mexico legislature enacted a paid sick leave law and some business groups said the cumulative effect of both will forcesome small employers to leave the state. In reponse Senate President Pro Tem Mimi Stewart said about two-thirds of the state’s roughly 44,000 businesses with more than one employee would not have to pay into the leave fund since they have fewer than five workers, though their employees would be required to do so.
The Senate debate over the paid family leave bill has included disagreement over the program’s potential cost. Opponents of Senate Bill 11 cited a Legislative Finance Committee (LFC) analysis that said the Paid Family and Medical Leave Task Force likely underestimated how many people would file and take paid family leave under the proposed law. The LFC bill analysis projected the fund could face a $516 million deficit by the 2028 budget year. It’s an amount that could cause the state Workforce Solutions Department to order an increase in the premium amount that businesses and employees would have to pay into the fund.
Supporters of Senate Bill 11 insist the bill has been thoroughly vetted and said it could actually help businesses by providing a level playing field across the state. Supporters dispute the LFC analysis saying it relies on U.S. Department of Labor surveys about the federal Family and Medical Leave Act which requires employers to provide up to 12 weeks of unpaid leave in certain circumstances and not on other states’ experiences with paid family leave laws. Senator Mimi Stewart said this:
“We want employees to want to go back to work. … The “[fiscal impact report] is wrong. … It used an inaccurate study.”
According to the National Conference of State Legislatures there are currently, 11 states that provide paid family and medical leave and the programs vary by state. Senate Reoublican critics of the SB 11 said other states’ experiences with paid family leave laws should not be used to predict how such a law might function in New Mexico. Albquerque area Republican Senator Mark Moores said this:
“It’s like we want California policies, without having California economic opportunities.”
State Sen. Joseph Cervantes, D-Las Cruces, voted for the bill. However, he brought up language in the bill that he said would lead to litigation. He said “the act applies to employers not physically in this state,” and cited employees in his district who might commute to El Paso to work. Stewart responded and clarified and said the bill language is about employees who work in the state for out-of-state employers, such as large corporations based elsewhere.
GOVERNOR’S SUPPORT IN QUESTION
Some New Mexico employers already provide paid family leave, and could decide whether to join the state program, as long as they offer similar benefits. Under a 2019 executive order issued by Gov. Michelle Lujan Grisham paid family leave is already required of some employers and the list of employers includes the University of New Mexico, Netflix and the state of New Mexico.
Gov. Michelle Lujan Grisham has so far declined to take a definitive stance on the bill. However, the Governor’s spokeswoman did say the governor supports policies that ensure workers’ rights while still maintaining a healthy business climate.
Links to news sources are here:
HOW IT WILL WORK AND FUNDING REQUESTED
The program would, if enacted, provide up to 12 weeks of paid time off for an employee who has a new child, is a victim of domestic violence, sexual assault or stalking or has a serious medical illness or to care for a family member with a serious medical illness.
Under the SB11 the Department of Workforce Solutions would administer the program. Employees would pay $5 for every $1,000 of income and employers with 5 or more employees would pay $4 for every $1,000 of income into a fund. Starting in 2026 the fund be used to compensate employees who qualify for the paid leave.
Senate Pro Tem Mimi Stewart said she thinks that over time the Department of Workforce Solutions would likely be able to lower the contributions.
The formula to be paid the benefits is 100% of minimum wage plus 67% of wages above minimum wage. Only minimum wage earners would earn their entire pay during the paid leave. The employee requesting time off would have to show documentation to establish the request for the leave and the Secretary of Workforce Solutions can impose fines on anyone who tries to commit fraudulent claims.
Senate Pro Tem Mimi Stewart is asking for $36.5 million in nonrecurring funds from the general fund over the next 2 year to begin the program but the program is expected to pay back the general fund by 2032. Stewart said much of the $36.5 million would go to creating an IT system for the Department of Workforce Solutions to help them administer the program.
Once the program is up and running and is able to pay the general fund back the $36.5 million, Stewart predicts that the Department of Workforce Solutions will be able to lower the $5 per employee and $4 per employer contribution rate.
COMMENTARY AND ANALYSIS
It is very difficult to understand fully Republican opposition and hostility to the Paid Family and Medical Leave bill given that it is state funded the first 2 years with $36.5 million in nonrecurring funds from the general fund over the next 2 years. The program will be state run and not be fully up and running until 2026.
The state is experiencing an enormous $3.6 Billion surplus and there could be no better time enacting such legislation and funding it fully than now. In addition to this funding, employees will pay $5 for every $1,000 of income and employers with 5 or more employees will pay $4 for every $1,000 of income into a fund, contributions that could be very easily be eliminated as the state’s revenues continue to increase.
Democrats in the 2023 legislative session hold a 45-25 majority in the House and a 27-15 edge in the Senate and this year’s session is a 60 day session. The session ends March 18. With less than 2 weeks left of the 2023 legislative session, Senate and House Democrats need to move as quickly and as aggressively as possible to get a final votes on all of their pending legislation in order to avoid embarrassing Republican filibusters. If not, they will have only themselves to blame.