Hickock Boardman Benefits

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Paid Family Leave

Both the Senate and the House have put forth legislative bills relating to paid family leave din Vermont.  The House Bill has been discussed and is currently in committee hearings.

The basics of both bills would create a fund made up of contributions of a percentage of payroll wages from all employees in the State of Vermont.  Currently the bill as proposed has no employer contributions included.  

Called The Family Leave Insurance Special Fund , this has been described as similar to the current unemployment program. Currently, the unemployment program is funded with only employer contributions, whereas this new family leave fund would require contributions from only employees.  The bill includes a 1% tax on all wages of all employees in the State.

These bills would also amend the current regulations of the Vermont Parental & Family Leave Act (VPFL).  Currently the VPFL applies only to employers who employ 10 (Parental leave) or 15 (Family leave) employees or more working an average of 30 hours per week. This bill would amend the VPFL to include all employers no matter how many employees they have, and would change the eligibility of employees to those that have been employed for at least 6 months with no hourly requirement stated. It also would require employers to reinstate employees, who have worked for at least 1 year, back to their original position(s) with the same rate of pay and benefits.

These proposed bills would also change the name of the “Vermont Parental & Family Leave” to only Vermont Family Leave which would include all the same qualifying events of both the parental and family leave as it stands now.   

Distributions from this fund would be made to those eligible employees who experience a qualifying event as described under the current VPFL.  The Department of Labor would administer this program. A percent of that employee’s wages would be paid to that employee while out on qualified leave from this fund.   The distribution to the employee may be subject to income taxes as well and an employee could decide to have taxes withheld from their payment.

There are many unanswered questions about this bill such as: how would short term disability integrate with this fund? What about workers compensation payments and integration? Who can appeal the decision of the Family Leave Insurance administrators? How does an employer’s current paid time off (including VT Paid Sick Leave) integrate?   Does this apply to all employees WORKING in the State, or only those residing and working in the state? What about out of state employers with employees in Vermont, would they contribute as well? 

Employers should contact their representatives on this issue with questions on how this will impact their business. If passed, this becomes effective on July 1, 2017, with contributions into the fund beginning on Jan 1, 2018. The Dept. of Labor would then need to work on the proposed rules process as they did with the Vermont Paid Sick Leave law.

Proponents and opponents of this plan have some valid legitimate points and questions about this