Minnesota Republicans Offer Alternate Plan for Family Leave

ST. PAUL, Minn. (AP) — Republicans in the Minnesota Legislature offered a voluntary proposal for paid family and medical leave Monday that would rely on tax credits for employers who choose to participate, in contrast with Democratic proposals that would require paid time off for workers to care for their families.

Sen. Julia Coleman, of Waconia, and Rep. Jordan Rasmusson, of Fergus Falls, depicted their plan as an innovative way to support employees who need time off after childbirth, or to care for sick children, or for parents nearing the end of their lives. They also presented it as an affordable alternative for small businesses that would help them compete with deep-pocketed big companies.

Democrats who have long been pushing to enact paid family and medical leave said they’re glad that Republicans have finally joined the discussion after years of resistance.

“This is a hopeful development,” Lt. Gov. Peggy Flanagan, who’s been Gov. Tim Walz’s point person on the issue, told reporters. “I’m excited that Republicans are ready to talk about paid family medical leave.”

But Democratic House and Senate leaders were less enthusiastic, saying there are huge differences between the proposals that would be hard to bridge.

The GOP proposal would authorize insurance companies to offer products providing varying degrees of paid family and medical leave. It would offer businesses employing up to 50 workers tax credits of up to $3,000 per employee to help then buy policies. The credits would be capped at $50 million. Coleman said it would cover more than the short-term disability benefits some employers offer. And she said relying on the insurance industry would get the benefits flowing sooner.

“Plans don’t have to be one-size-fits-all, with burdensome regulations and penalties,” Coleman said at a news conference a couple hours before a Senate committee approved her bill on a voice vote. “It can be written with the workforce in mind and can be done without setting up a huge new bureaucracy at the state government.”

Rasmusson faulted the Democratic plan for relying on a payroll tax increase and mandates on employers, and creating a large new state bureaucracy, instead of letting employers choose insurance products that meet their needs and budgets.

Coleman and Rasmusson said their insurance-based proposal is similar to one that recently passed with bipartisan support in Virginia. Minnesota Democrats are seeking the kinds of broader protections in place in several other states. President Joe Biden and congressional Democrats have tried without success to find enough support to pass it at the federal level.

Democrats criticized the GOP bill for not specifically requiring paid medical leave. But Coleman said the bill is written broadly enough to allow insurers and employers to choose to offer it as part of their plans.

State data show that 95% of Minnesota businesses, or around 174,000 employers with about 927,000 workers, are small enough to qualify. Coleman said the $50 million cap could be raised in later years if employer interest is high enough.

The Democratic-controlled House passed a plan last year that is getting updates this session.

The lead House author, Rep. Ruth Richardson, of Mendota Heights, said the Republican proposal would let employers “pick winners and losers” in who they would choose to cover, which she said would shortchange low-wage workers, women and people of color. The Democratic plan, she said, would create a “uniform safety net” that would protect everyone.

Sen. Susan Kent, of Woodbury, who is the lead author of the Democratic plan, told reporters that employers and employees would pay into a state fund that would reimburse businesses for the paid time off. It’s modeled after the state’s unemployment insurance program. And she said many businesses, especially smaller ones, don’t have the cash flow they would need to benefit from the tax credits.

“We have serious challenges in our economy for workers — for working families all across the state. And the Republicans keep coming forward with these little symbolic gestures that do not solve the problem,” Kent said.