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Opt-In Paid Leave Takes Shape Amid Skepticism in New Hampshire

April 12, 2022, 9:35 AM

New Hampshire’s governor is touting a one-of-a-kind paid family and medical leave program that will create a state employees plan and give private employers and workers the option to join instead of requiring them to pay into it—a potential model for other Republican-led states.

But the Granite State initiative faces a rocky path forward.

Paid leave advocates say it’s an untested approach that will leave many workers without coverage. Gov. Chris Sununu’s fellow Republicans in the state legislature aren’t all on board, and the state’s business community is officially neutral, although appreciative that there’s no mandatory payroll tax involved.

“It is not being universally applauded, even from his own party,” said David Juvet, senior vice president for public policy at the New Hampshire Business and Industry Association.

A Republican-backed bill, H.B. 1165, to repeal the program before it launches narrowly passed the House and is awaiting Senate action, but Sununu could veto that effort if it reached his desk. House Democrats mostly opposed the repeal effort, describing the governor’s program as imperfect but better than no paid leave plan at all.

Meanwhile, the governor’s office says it’s pushing “full steam ahead” to launch the program, issuing a request for proposals last week that seeks bids from a private insurance company to administer it.

For all state government employees and other workers who choose to participate, the program will offer up to six weeks annually of paid time off to tend to a new child, a seriously ill family member, or their own personal medical need and replace 60% of the workers’ weekly wages during their leave.

Momentum toward government-backed paid leave benefits once again depends on state policymakers after Democrats’ efforts to pass a nationwide paid leave program stalled in the Senate late last year. It won’t be clear whether the New Hampshire program adds to the gradual state-led expansion of paid leave benefits in any meaningful way—or merely funnels tax credits to large employers already providing paid leave voluntarily—until after it begins paying benefits in October 2023.

Voluntary Plan

The New Hampshire idea is a twist on the paid leave laws enacted in 10 other states and the District of Columbia, which apply broadly to private-sector workers and require payroll deductions from employers and/or employees—programs typically enacted in Democratic-majority statehouses. Maryland is the latest to enact paid leave after state lawmakers overrode Gov. Larry Hogan’s veto April 9, and Delaware also could join the list this year.

Other Republican-led states also have made moves this year to nudge employers toward providing paid leave benefits. Virginia Gov. Glenn Youngkin (R) signed legislation that lets the state license life insurance companies to sell family leave insurance to employers as an employee benefit. And in Alabama, a bill awaiting Gov. Kay Ivey‘s (R) signature would require any employer that provides paid maternity leave to also offer paid leave for adoptions.

Sununu vetoed prior legislative paid leave proposals in 2019 and 2020, citing his opposition to funding the benefits through payroll taxes. Around the same time, he proposed an alternative: a voluntary plan in partnership with neighboring Vermont to offer coverage to both states’ workers. The Vermont legislature never got on board, and Sununu’s allies in the state Senate added a New Hampshire-only version to a state budget bill last year.

“A statewide, private-market, truly voluntary paid leave plan does not exist in any other state, and New Hampshire is leading the way,” the governor said in a written statement announcing the request for proposals. “After years of talk, we are finally moving forward with a viable paid leave product that is available to anyone who wants it and forced upon no one who does not.”

The program will cover all 10,000 state government employees, creating a base pool to stabilize the fund, according to the governor’s office. Other public-sector and private employers could choose to participate, with a tax credit available covering 50% of premiums. Workers whose employers don’t opt in could join via an individual pool and pay their own premiums, capped at $5 per week.

“Expanding and diversifying the risk pool in this way will ultimately help to further reduce premiums, while also helping businesses struggling to attract and retain workers—a win for both employers and employees,” Sununu’s press office said via email.

Critics Hold Forth

But the design of Sununu’s program looks unlikely to help those workers who are least likely to have paid parental, medical, or family caregiving leave already available through their employers, said Amanda Sears, New Hampshire director of the Campaign for a Family-Friendly Economy at Civix Strategy Group—partly because employers of hourly and low-income workers that already don’t provide paid leave won’t be any more likely to do so via the state program.

Sununu’s program is “a plan to artificially prop up a private insurance provider,” Sears said. “It is not a plan to make sure everybody has access to paid leave when they need it.”

The number of weeks and 60% wage replacement, among other program details, make lower-income workers less likely to benefit than they might in other states, which often provide up to 12 weeks and a sliding-scale of wage replacement paying 80% to 90% for the lowest-wage workers, Sears said.

About one-third of New Hampshire workers have access to paid family and medical leave, Sears said, citing research from the University of New Hampshire’s Carsey School of Public Policy. Workers in lower-paying jobs are less likely to have benefits, according to the 2016 research—a disparity that holds true nationally and for various types of paid time off.

The extent to which private employers will participate isn’t clear, Juvet said. His association isn’t hearing many inquiries from businesses about the program, but it’s still early in implementation.

“In terms of private sector participation, I think a lot of that is going to have to do with the ultimate cost,” he said.

Momentum in Other States

The bill approaching the legislative finish line in Delaware would make it the 11th state to enact paid family and medical leave that applies broadly to private-sector workers, following neighboring Maryland.

Delaware’s Senate last month passed the paid leave bill that is moving now through the House. From there it would go to Gov. John Carney (D), who has voiced support for adopting paid leave this year.

Beyond the Delaware and Maryland measures, a handful more states look well-positioned for next year, said Molly Weston Williamson, director of paid leave and a senior staff attorney at the advocacy group A Better Balance. Among those, Maine and New Mexico have set up study commissions to research and make recommendations on paid leave, she said.

“A lot of states are really working hard to lay the ground work,” she said. “Right now across the country, we’re seeing that state advocates and policymakers are really leading the way on paid leave.”

To contact the reporter on this story: Chris Marr in Atlanta at cmarr@bloomberglaw.com

To contact the editor responsible for this story: Andrew Harris at aharris@bloomberglaw.com, Melissa B. Robinson at mrobinson@bloomberglaw.com

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