Governor expands paid family leave program

Originally available only to state employees, it will now be open to all Vermont businesses that employ at least two people, but Democrats say plan does not go far enough

Last week, Gov. Phil Scott, in conjunction with The Hartford, a Connecticut insurance firm, announced a new paid family leave program that extends to the private sector a program already in place for state employees.

Meanwhile, the Senate is working on its own paid family leave bill, one that originated there and was written by Rep. Emilie Kornheiser, D-Brattleboro. That bill has already passed out of the House.

The difference between the governor's plan and the Senate's is who will pay for the program and how much pay it will actually provide.

"Providing all Vermonters with access to affordable paid family and medical leave, without imposing a new mandatory tax, is truly a win-win," said Scott in a press release. "I'm excited to move forward with this new phase of the Vermont Family and Medical Leave initiative and look forward to Vermonters benefiting from the program for years to come."

There is no doubt that a strong paid family leave bill would fill a critical need for Vermonters.

Taking care of an ill loved one means that a caretaker must occasionally prioritize care over work. And not being paid for the time away could put a strain on anyone's budget. Having to weigh the welfare of a child or a parent - or of oneself - against a day's income can be difficult.

And, at a time when employees are desperately needed in almost every industry, losing workers because of their need to care for someone in their family puts a strain on employers, who have to hire and train replacements.

The governor has vetoed Democratic-backed paid family leave plans before. In 2020, he vetoed one that was to be funded by a $29 million mandatory payroll tax that would fall on workers or employers.

"For years, Vermonters have made it clear they don't want, nor can they afford, new broad-based taxes," the governor said in his message explaining the veto.

In 2018, he vetoed an even more robust plan with the same funding mechanism.

His new plan is actually an insurance program.

The benefits "provide partial income replacement for workers who need to take care of a family member with a serious health condition, bond with a new child, tend to their own serious health condition, care for a military service member's serious injury or illness, or address certain needs related to a family member's covered active military duty or call to active duty," the press release said.

Contributions to the plan can be "fully paid by the employer, split between the employer and employees, or fully paid for by the employees as a voluntary benefit," according to the press release.

The options can run from six to 26 weeks per 12-month period and offer covered employees 60% to 70% of their wages, with additional options available.

The first phase of the program was implemented for state employees in July 2023.

Is it enough?

According to Kornheiser, the governor's bill does not come close to providing necessary assistance for workers.

"The administration has been sort of planning this for a while," Kornheiser said. "Originally it was going to be a partnership with New Hampshire. But the partnership didn't work out. And so New Hampshire launched maybe a year earlier than the Scott administration.

"And the Scott administration has been doing it for state employees through The Hartford for about six months now. But the coverage has been unbelievably low. All the national research on voluntary programs like this point to really low wage coverage."

The people who need these benefits, Kornheiser said - even the lowest-paid state employees - probably cannot afford to take it.

"So they might have the benefit, technically, if they're lucky," Kornheiser said. "But it's not enough coverage to be able to afford to take time off. So we don't see any of the benefits that a family medical leave program has, about people's ability to stay connected to their employer, about the possibility to care for themselves, about people's ability to stay financially viable while they're caring for loved ones."

States that have offered the kinds of plan the governor is offering have found that they just don't work, Kornheiser said.

"None of the benefits that we see of a strong family medical leave program have proven out in states that have had these kinds of voluntary programs," she said.

The family leave bill Kornheiser wrote - the one now in the Senate - allows for 90% wage coverage that would, after taxes, be equal to a worker's salary, compared to the 60% to 70% of a weekly paycheck that The Hartford offers.

Offering wage coverage so low that it does not help the worker might be a political move rather than a policy one, Kornheiser said.

"I think it's political compromises to keep the program less expensive," she said. "In states that are voluntary with low wage coverage and are privately administered, like we're seeing in Vermont or New Hampshire, it seems to me to just be the government essentially prioritizing one private sector corporation and giving them an advantage in the market over others. I don't really see what else is happening."

Vermont workers and their employers already have the ability to sign up for a voluntary low-wage coverage program with insurance carriers such as Aflac anytime they want, she pointed out.

"So it's not clear to me what actually the benefits are of the state setting up something like that," Kornheiser said. "There's no guarantee of coverage. There's no guarantee of accountability if the issue that you're seeking coverage for is rejected."

Furthermore, "it's not a high-enough level of wage replacement to actually cause any financial stability or create financial stability for people," she continued.

Any coverage is better than none, however, Kornheiser said.

"I'm glad that state employees have that program right now," she said. "I think it's great. They all have it. They didn't have it before. I know someone who took the opportunity to use it and it allowed them to take care of themselves to some level, but only for a short period of time."

In the meantime, "I think we need to keep on working for a universal and robust program," Kornheiser said.

AARP jumps in

A new player in the game, AARP Vermont, is ramping up its advocacy for the Senate legislation. The position of the organization, which advocates for the interests of people age 50 and older, is that the governor's new initiative is insufficient.

Instead, it is gearing up to pressure the Legislature to pass the paid family leave bill.

"Right now, 73% of Vermont workers are one family or medical emergency away from losing their pay - and for some, even their job," the organization says on its website. "Our communities are stronger when Vermonters can count on paid family and medical leave."

It describes the Senate bill as one "allowing most public- and private-sector workers to take up to 12 weeks of paid leave for an illness or to care for a family member with a serious health condition."

The governor "has begun setting up an alternative paid leave program, through an administrative directive, that would be voluntary for employers and offer less time off at lower pay," the website said. "AARP Vermont needs help lobbying lawmakers to pass the legislation."

The Legislature will keep working on the bill, Kornheiser said.

"When I talk to people in Vermont about it, it's a real combination of folks who have worked white collar jobs most of their life and have always had this benefit," she said. "They don't realize how many people don't have it."

Meanwhile, "there are folks who have never had it, and don't even realize that it's possible," Kornheiser said. "So it is going to take a lot of community conversations to realize that something could actually change."

This News item by Joyce Marcel was written for The Commons.

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