There's a lot of momentum behind Senate Bill 11, the Paid Medical and Family Leave Bill. It's already passed the Senate and now is moving through the House. Unlike the 2021 Healthy Workplaces Act, the burden of which is borne entirely by employers, this paid medical leave bill is paid for by employees, employers and a proposed new state investment fund.
Essentially, it's a new entitlement program.
It would require all employers with 5 or more employees to allow employees to take up to 12 weeks of paid medical leave a year, in increments as small as four hours. The intent is to manage a major illness, take time for parental leave after the birth or adoption of a child, or care for a family member experiencing a major illness.
Or, I guess, a half day off for treatment of an ingrown toenail.
SB 11 also requires employers to hold the employee's job or provide an equivalent one upon return to work.
SB 11 includes a one-time appropriation of $36,500,000 to seed the investment account and a requirement to begin repaying it in 2026.
The legislation defines an employer as "a person that has one or more employees." Withholding is only required for those with five or more employees. What about those employers with one to four employees? And why doesn't the definition of an employer use "who" instead of "that" like Strunk and White say you should?
For the first three years, beginning in January 2025, the withholding rate is half a percent of wages for employees and four-tenths of a percent for employers. After January 2028 the rates will be set quarterly by the Secretary of Workforce Solutions.
The compensation for those taking paid medical leave is a formula equivalent to 100% of state minimum wage plus 2/3 of the difference between the individual's current wage and minimum wage.
If you are self-employed, you can opt-in with a lot of extra documentation. Wait. What? Why? Just. Why? Why would you pay extra taxes on yourself so you could make less money when you're sick when you could skip all the paperwork and just keep paying yourself anyway?
So, Merritt, you might say, we see you have questions about nuts and bolts of the law. Should New Mexico have a paid medical leave law at all?
I am so glad you asked!
The Paid Medical and Family Leave Bill is not right for New Mexico in 2023. Although it appears close to cost-neutral to employers, just $4 for every $1000 in wages, it means more lost manhours in a labor market with an already nationally low participation rate. That's a real blow. And it will not entice new employers to the state.
The states that have enacted paid medical leave laws like this are rich ones, quite unlike New Mexico. Because there is nothing I adore more than arcane economic data, I looked up a comparison of state gross domestic product to national GDP around the world.
Massachusetts' economy is slightly larger than Sweden's. Seems right. Both have paid medical leave. New York's and California's economies outpace those of South Korea and India, respectively. Neither of those democratic countries offer paid medical leave but their economies are mighty.
New Mexico? Well, we are right up there with…Cuba. Cuba does offer paid medical leave. It's also one of a handful of Communist dictatorships. Cuba makes sugar and doctors and hopes Russia and Venezuela buy their sugar. Their doctors work side hustles to afford coffee to put their sugar in. "Paid" medical leave in Cuba doesn't necessarily mean you can afford food or anything.
I'll just leave it that I don't think we are in an economic position to start a new entitlement program, except maybe a really lousy Communist-style one.
And there is the sticky subject of starting a major new entitlement program in the same Workforce Solutions Department who brought you the Great Unemployment Benefits Filing Black Hole of 2020 followed by the We're Sorry But We Overpaid You Clawback of 2021.
The one bright spot in this legislation is that workers will not be able to claim benefits, nor will the fund have to begin becoming self-sustaining, until January 2026. We'll have a new governor then, so it will be someone else's problem.
Merritt Hamilton Allen is a PR executive and former Navy officer. She appears regularly as a panelist on NM PBS and is a frequent guest on News Radio KKOB. A Republican, she lives amicably with her Democratic husband north of I-40 where they run two head of dog, and two of cat. She can be reached at news.ind.merritt@gmail.com.