The Senate Finance Committee heard testimony from the Joint Fiscal Office (JFO) on employer payroll–based taxes, such as State and Federal income tax, Social Security, Medicare, unemployment insurance, and workers‘ compensation, and received a preview of proposals for new payroll taxes. The Vermont Chamber will testify next week on the total impact of millions in proposed taxes to ensure the committee has a thorough understanding of the cumulative impact of these measures on employers when considering implementing additional taxes and understand the need to value economic stewardship during a time of great uncertainty. 

For the average-sized Vermont Chamber member, one employee on leave would require them to operate without 20% of their total workforce for a quarter of the year. The Vermont Chamber provided testimony this week on the Paid Family and Medical Leave Insurance Program, encouraging legislators to consider the current economic realities facing Vermont business owners, and any unintended consequences of vague language included in the bill. The bill is expected to be voted out of committee next week, leaving few days for the committee to evaluate the testimony received in recent weeks and address concerns on eligibility, process, and scope. 

As Vermont continues to face a significant workforce shortage and given the time and resources required to hire and train talent, the alternative of hiring a temporary replacement worker is a difficult, costly, and in many cases, an ineffective remedy. A payroll tax to employers, on top of the considerable cost involved in the loss of an employee for 12 weeks, would be an economically difficult imposition on many Vermont businesses. As goes the success of small businesses, so often goes the success of our communities. The strain that this proposal will place on their success is worrisome. Vermont Chamber testimony encouraged legislators to investigate the scope of this new program and seek a balance of providing a benefit with additional costs to both employers and their employees.