Lifeline or logistical problem? Paid leave debate unfurls at Capitol

Governor Tim Walz looks at a baby
Gov. Tim Walz greets Samantha Sencer-Mura and her seven-month-old son Tadashi at a St. Paul coffee shop where he was talking about paid family and medical leave in 2022. As Minnesota lawmakers put a proposal for paid family and medical leave through its paces, employers try to get a handle on the implications.
Brian Bakst | MPR News file

First-term Sen. Nicole Mitchell picked a meaty topic for her first community forum as a legislator: The Woodbury DFLer offered a rundown and sought feedback on a bill establishing one of the nation’s most-generous paid leave programs.

Through a state-managed operation — fed by a new payroll tax — employees could apply for guaranteed weeks off with partial pay when their family expands, a loved one needs sustained care or they run into their own serious health complications.

“Most of these are situations where people would not have been able to be at work anyway,” Mitchell explained to dozens of people in a Woodbury auditorium. “And this is just a way to make sure that a person can keep supporting their family.”

The questions rolled in: Would it replace leave benefits companies currently offer? Would the time have to be taken in a solid block? How would employers fill the holes, particularly if the labor market remains tight?

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Person talks standing up02
Sen. Nicole Mitchell, left, hosts a town hall forum on a paid family and medical leave proposal in Woodbury, Minn. along with Sen. Alice Mann, right, on Feb. 3.
Brian Bakst | MPR News

“I support this and I like this,” began Lynn Thoele, who owns an area cleaning business. “But I can tell you, logistically, I would not be able to cover six months or three months.”

Sen. Alice Mann, the bill’s sponsor who joined Mitchell at her forum, jumped in with an answer.

“Under this bill, what happens is we all chip in a little bit per week — about the price of a cup of coffee. And when your employee breaks their hip, they get the money from this fund. The employer is off the hook for that salary,” said Mann, DFL-Edina. “And they can use that salary to hire someone else to fill in if they need to.”

The bill is a priority of the Legislature’s majority DFL caucuses and Gov. Tim Walz. It has been through 13 committees and has several more ahead before final votes. Minnesota would join about a dozen states that guarantee some level of leave or are close to launching programs.

Even if adopted this year and the program is seeded with hundreds of millions of dollars from the state’s budget surplus, it would be a few more years before it goes live.

How would paid leave work

The amount of pay a person on leave qualifies for depends on how much they earn. Those who earn the least now wouldn’t get more than 90 percent of their regular pay and many would receive a smaller percentage. They’d qualify if they’ve been on a company’s payroll for at least 90 days.

The outer bounds of the leave proposal work like this: An employee could take up to 12 weeks per year of partially paid time off at the birth or adoption of a child or to assist a family member during a major illness. They could claim 12 more weeks to tend to their own health crisis.

Bill supporters insist it would be rare for people to use the maximum time of either allowance or the categories in combination. In a recent committee hearing, Mann said many people can’t go that long without their full paycheck.

“Imagine if someone does qualify for 24 full weeks in a year. That means that they had a baby and then something horrible happened, right? They had a baby and then they had a stroke. So the vast majority of people will not qualify for 24 weeks,” Mann said. “But when they do, it’s something catastrophic.”

Person poses before a large logo
Molly Jungbauer, owner and chief executive of Hollstadt Consulting, poses for a photo on Feb. 7.
Brian Bakst | MPR News

Even the potential for an extended outage has business leaders on edge. Aside from the  payroll taxes on employers and employees, concerns include having to spread the workload across existing staff or struggling to find temporary replacements, particularly in high-demand fields.

“You can’t just backfill many of these positions,” said Molly Jungbauer, the owner and chief executive of Hollstadt Consulting, an Eagan-based firm that offers IT assistance and management services to other companies. “They’re highly skilled.”

Jungbauer currently allows her staff to use accumulated paid-time off in combination with a short-term disability plan for qualifying life events. She sees the legislative proposal as too expansive when it comes to eligibility and too rigid around requirements on employers.

The proposal allows the health leave to be intermittent, so maybe a couple of days a week instead of a solid block of time off. For the caregiver benefits, family members can be related by “blood or affinity” as long as it’s equivalent to a family relationship. The bill guarantees a worker an equivalent job back when leave ends. A new state office would determine eligibility and administer benefits.

“Every time someone goes out for leave here, it doesn't matter what their role is, it adds burden on my other employees. And it absolutely impacts productivity for my organization,” Jungbauer said. “And that's what the state doesn't understand when they're trying to apply a one-size-fits-all approach. It just doesn't work.”

Companies could bypass the program by offering benefits on par or better than the law calls for and the job protections, too. 

Businesses with 50 or fewer employees could get grants toward temporary employees or overtime caused by a leave.

Small businesses chime in

Kevin Brown owns Smart Set, a graphic design and print shop in Minneapolis. He said a reliable, state-run leave program would take a load off of his shoulders. One of his employees recently went out on a six-week maternity leave — half covered by vacation and half from him.

“Paying her as well as her replacement puts a huge financial burden on the company at a critical time of year,” Brown said.

Brown personally opted against taking much more than a lunch break here and there off when his father was in his final months.

“I will never get back the time I could have spent with my father,” he said.

Lawmakers are still trying to work through complicated situations, such as those in health fields where staffing ratios are set by regulation. School and local government officials have raised objections. So have owners of construction firms and places that staff up for busy seasons.

Gunflint Lodge and Outfitters owner Mindy Fredrickson said the challenges are real.

“There’s no temporary staffing agency on the Gunflint Trail or anywhere in Cook County,” she said. “Our small businesses, our remote businesses, our rural businesses are not going to be able to administer this program in a successful way.”

Rep. Dave Baker, R-Willmar, said the state would be better off providing incentives to businesses to encourage them to create leave benefits or extend financial security to employees who can’t work. 

“I think we can find a better way that's not hitting them over the head with a club,” Baker said.

The bill’s House sponsor, Rep. Ruth Richardson, DFL-Mendota Heights, said the status quo is leaving too many people out and forcing them into impossible situations.

“We have a system that those who are most able to afford to take an unpaid leave have access,” Richardson said. “And those who are the most vulnerable and don't have the ability to sustain themselves economically, they don't have access to paid leave.”