The House has passed a paid family leave bill that moves Vermont from a forthcoming voluntary paid family leave program to the largest state-run family leave program in the nation. According to estimates from the Joint Fiscal Office, the costs required just to stand up the program would be staggering: $111.5 million over the next three fiscal years, an ongoing annual administration cost of $13 million, and $94 million for anticipated benefit payments. With no carve-out for small businesses, all Vermont employers would provide 12 weeks of leave for a broad swath of conditions. Even after a lengthy floor debate that stretched far into the night, essential questions remain unanswered.  

During the House floor debate on H.66, critical questions were raised concerning the size, cost, and complexity of the proposal to create an expansive paid family and medical leave program that would offer the largest state benefit in the nation. Several questions were raised by legislators during the debate that went unanswered, including: 

• What would the cost be for a program to run through an established third-party insurance company rather than trying to stand it up within state government? 
• What are the safeguards in place if the uptake of the program exceeds the JFO estimate and uses up the program’s reserve?  
• What matrix or data was used to determine that 2 weeks of bereavement leave was appropriate? 
• How will the state find the 65 new government employees to run this program given that the state currently has 800 open positions?  

Qualified conditions for employee leave include a serious health condition of the employee, care for a family member with a serious health condition, birth, adoption or foster care initial placement, own disability, military exigencies and care, safe leave, and, up to two weeks of bereavement leave. 

Multiple labor bills were hurried through the Senate Economic Development Committee to meet the crossover deadline. One committee member acknowledged that the bills, “make changes that are significant” while another questioned why the Vermont Chamber was raising “last minute” questions, despite it being the first opportunity that the Vermont Chamber had to testify on the bill. When the bills are picked up in the House, the Vermont Chamber will continue to testify on the consequences S. 102 and S. 103 would have for the business community.  

S.102 contains broad language on what meetings an employer can mandate employees attend. Similar legislation in other states has prompted lawsuits over interference with rights established by the National Labor Rations Act. Additionally, language that would grant employees the right to refuse attendance at meetings they consider political, could have negative repercussions. For example, if DEI or ESG trainings are considered by someone to be political, as written, employers would not be able to require them to participate. S.103 would remove the standard of severe or pervasive for unlawful harassment or discrimination. The Vermont Chamber testified that as written, the legislation would bypass the opportunity for restorative change and instead be lost to litigation.  

The House is moving forward with H.66 and is expected to vote it out by the end of next week. Despite it taking two months to pass the legislation, few substantive changes were made from the time the bill was introduced to the time it was voted out of the House. The plan goes far beyond what was passed, and ultimately vetoed, in 2019. Funded by a 0.55% payroll tax, the plan would require $117 million annually to administer, $112 million in one-time startup funds, and as many as 65 new state employees during a severe workforce shortage. In the Senate, legislators have offered their own solution as part of their childcare bill, which would be twelve weeks of paid parental leave following the birth or adoption of a child.  

Further work will be required in the Senate to ensure legislators understand the current economic realities facing Vermont business owners, and the potential unintended consequences of an additional payroll tax on top of the considerable cost involved when an employee is on leave for 12 weeks. As the issue evolves, the Vermont Chamber will continue to center facts and data in testimony to ensure legislators understand the full impact the legislation would have on the Vermont business community.