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Paid leave bill expected to clear House committee

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Senator Sarah McBride leads the defense of Senate Bill 1 during the Wednesday hearing of the bill in the House Health & Human Development Committee. | DBT PHOTO BY KATIE TABELING

DOVER —The bill for paid family and medical leave is likely to clear the House Health & Human Development Committee, but the measure will likely be split along party lines moving forward.

The committee voted 7-5, split along party lines, to move Senate Bill 1 forward. But with a majority of eight votes needed to reach a majority, committee chair Rep. David Bentz (D-Christiana/Bear) walked the bill to receive the signatures to pass it as two Democrats were absent from the hearing.

The bill can be “walked,” or signed outside a committee vote, for two legislative days – in this case, by Tuesday. House Democratic Caucus Communication Director Drew Volturo told the Delaware Business Times he expects SB1 to be signed and released by tomorrow. The bill did pass on April 8 with eight votes, and was assigned the appropriations committee.

“What the pandemic has shown us is that we cannot take good health for granted,” said Rep. Debra Heffernan (D-Brandywine Hundred), who is leading the bill’s efforts in the House.

Herrernan shared that last summer, her mother fell seriously ill, and she was “lucky to have the flexibility” to be there for her.

“I wouldn’t have traded that time for anything, and I want to make sure that every Delaware worker is able to be there for meaningful care and to be there,” she said.

Once SB1, also known as the Healthy Delaware Families Act, is released, it is expected to head to the House Appropriations Committee for consideration.

Notably, State Sen. Sarah McBride (D-Wilmington), who has been championing the effort for paid family and medical leave for almost a year, provided much of the defense of the bill. In some seats lining the room, members of Gov. John Carney’s administration — including the Departments of Labor, Finance, Human Resources and the Office of Management and Budget as well as the Office of Women’s Advancement — were on hand to answer any questions on the bill.

“The governor has been an exceptional partner in this legislation,” McBride said. “At the end of the day, the ability to take care of your health or to be there with your child in the first precious weeks of their life, or the ability to take care of someone’s illness, shouldn’t be a matter of luck. It should be the law of the land.”

Rep. Debra Heffernan (D-Brandywine Hundred) spoke about how she was fortunate to have paid leave to tend to her mother last summer. | DBT PHOTO BY KATIE TABELING

During the two-hour hearing, Republican representatives asked questions and raised doubts about how paid family leave would still impact Delaware businesses. The Department of Labor reports there are roughly 35,000 businesses in the state, and 7,000 would have to require a leave program under SB1.

Rep. Ruth Briggs King (R-Georgetown) and Rep. Bryan Shupe (R-Milford) raised the issue of the cost to the state to implement the program – and whether it would be more cost-effective to contract the work.

The fiscal note attached to SB1 outlines that recurring costs for the program would be $7.3 million, with $4.4 million to hire 66 more staff members to create a new division in the Department of Labor.

“I think this is going to be a challenge, considering all the work we did for unemployment [since the pandemic started],” Shupe said.”I feel bad for the individuals who had to muster up to get to this exaggerated point to qualify for unemployment and not just be able to deal with the sheer numbers. I would ask to take a serious look at a third party because I do think it will be a strain sharing resources.”

McBride said she was not philosophically against the idea of contracting out to a third party, but she also hoped there may be a chance for the Labor Department to improve the unemployment insurance program while it rolled out the paid leave program, in terms of buying the technology to run both programs.

Rep. Mike Smith (R-Pike Creek) said he was getting several emails and comments from constituents that the timing wasn’t right for their small business to implement a family leave program, as many were struggling with duties at home, running a business and oftentimes serving as the one manning the store.

“We used to be a major employer state, now we’re a small business state,” Smith said. “This is something the market is already doing for us … some businesses are paying benefits from an insurance perspective because they are able to use that money for their family. In the industry today, we have people gravitating for a hybrid mode of work which already allows flexibility as it is.”

Much of the hour-long testimony was in defense of the bill, including Nemours Children Health representatives and ChristianaCare lobbyist Lisa Goodman speaking of the virtues of health for children and their mothers. AARP Delaware Advocacy Director Shelia Grant noted that 14% of Delawareans gave up work altogether to take care of their sick family members, and this bill would provide many workers a path back.

Brew HaHa! owner Alissa Morkides testified in support of SB1, noting that she had seen many employees struggle with making the impossible choice of taking a sick day or not getting paid.

“We tried to reduce that by offering our managers paid time off as well as two weeks paid parental leave,” she added. “I personally think this bill is a no-brainer, because COVID has really exposed the need to help people.”

The lone testimony against the bill came from National Federation of Independent Business Maryland and Delaware Director Mike O’Halloran, who argued the time was not right for paid parental leave.

“This constitutes a payroll tax at a time of record inflation. You can go to the grocery store, go to the gas pump and prices are rising everywhere,” he said. “Small business owners will bend over backward for their employees to accommodate their needs, particularly when an employee’s time off from work to take care of themselves or a loved one.”

SB1 would offer 12 weeks paid parental leave and six weeks for medical and caregiving leave through a state social insurance program. Under the bill, eligible Delaware workers could receive up to 80% of their average weekly wages or up to $900 through the state-run insurance program. 

Businesses with less than 10 employees would not automatically qualify for paid parental leave, and those with 25 employees or less would not be covered for caregiving or medical leave.

Paid family and medical leave would only apply to full-time employees who worked 1,250 hours, or a full year, much like the federal Family Medical Leave Act of 1993. The benefit is tied to inflation, state officials noted.

The program would be funded by a 0.8% tax of an employee’s weekly pay, split evenly by the employee and employer. Breaking that down, 0.4% tax would be for medical leave benefits, 0.08% for family caregiving — which included military leave — and 0.32% for parental leave. 0.8% would equal $4 for every $1,000 spent.

Another notable feature of SB1 is that, if the program begins, contributions start at a fixed rate in 2025 and 2026, but it can adjust.  

The Delaware Department of Labor will be assessing the rate in early 2027. The bill is written to in essence cap the contribution rate to 1%, and if the benefit formula were to go over 1%, it would decrease benefits for workers. After payouts are assessed and costs to administer the program, the Secretary of Labor will determine whether it would be lowered.

Businesses would be able to opt out of the potential Paid Family and Medical Leave program, if they have an established paid leave program that is comparable. Businesses can choose to opt in for one of the three leave policies — medical, caregiving, parental — and leave the other policies on the table to mix and match with the private policies.

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