Last week, I provided an update and highlighted some pieces of the legislation on HB6 which was recommended in committee with a “Do Pass.” As of Wednesday morning (2/7/24), no further updates had been posted on the website for HB6 or HB11.
In comparison SB3 was sent to the STBTC (Senate Tax, Business and Transportation Committee) and received a “DO Pass” recommendation. SB6 was also passed at the SFC (Finance Committee) with certain amendments. The amendments had not yet been posted as of the afternoon of 2/7/24. However, as promised last week, below is a summary of SB3 as the bill was initially introduced.
The Bill is fairly similar to HB6. One noteworthy item is that it requires the use of an actuarial consultant. Additional highlights and changes will be included after the amended document is posted on the legislative website.
Section 1 provides definitions, Section 2 discusses funding, Section 4 covers contributions, and Section 5 addresses leave and compensation:
Similar to HB6, SB3 covers “all public and private employees subject to state jurisdiction,” (“except employees hired by the United States”) unless an employer has an existing program substantially similar or greater than the plan administered by DWS. In this case, the employer would have to apply for and receive a waiver. Self-employed individuals and Indian Tribes may but are not required to participate. The program is not applicable to employees of the federal government.
While the federal Family Medical Leave Act (FMLA) is unpaid, the legislation surrounding what the proposed paid state program covers is very similar to the language under the FMLA and the language under HB6. However, like the state Healthy Workplaces Act, the leave broadly defines eligibility by including circumstances around “Any other individual related by blood or affinity whose close association with the employee or employee’s spouse or domestic partner is the equivalent of a family relationship.” (This is the exact same language as HB6.) The circumstances for the leave include, family leave, medical leave for a serious health condition, qualifying exigency leave (similar to the military components of the FMLA), and safe leave (domestic violence, stalking, sexual assault, and abuse).
The legislation provides for the contracting “with a qualified independent actuarial consultant who is a member of a leading actuarial professional association and has the relevant experience to analyze” certain factors related to the program. The legislation provides for a review of solvency of the program beginning January 1, 2028, and annual reviews by October 1st of each calendar year. (Premium increases to employees may not exceed one-tenth of a percent of wages per year.)
The program will start January 1, 2026, and after one year of employment, employees that are approved for the leave may be eligible for up to twelve-week’s of consecutive or intermittent leave paid at a rate of the state minimum wage plus 67% of their own average weekly salary from the past year, with certain limitations. Employees will pay in at a rate of ½ of a percent of their wages “up to the earnings cap established by the federal social security administration program, pursuant to the Federal Insurance Contributions Act,” starting January 1, 2026. Starting in 2029, the assessment on the employees’ wages will be at “55% of the premium set by the Secretary” of the Department of Workforce Solutions. Annual adjustments will be assessed in 2028. Employers with five or more employees will begin by paying 4/10 of a percent with the same cap applicable to employees. at “45% of the premium set by the Secretary” of the Department of Workforce Solutions. The amount paid for the employee to be out is 100% of the compensation that would be paid to a non-tipped, state-minimum wage earning employees (see bill for additional parameters) plus 67% of the employee’s average weekly wages. The employee must have contributed to the fund for a minimum of six months during the prior twelve-month period to qualify for use of the leave.
Southwestern HR Consulting (SWHRC) will continue tracking Paid Family Leave legislation as they make their way through the legislature. Follow us through LinkedIn or on our site at swhrc.com, as we follow these proposed Act.
Written by | Magdalena Vigil-Tullar
HR Consultant | MBA, SPHR, SHRM-SCP, CLRP
Phone: 505-270-7494 | Email: email@example.com