‘This new tax could be the last nail in the coffin’: Paid Family and Medical Leave Act to cost taxpayers $400M if it becomes law

By New Mexico Sun Report

Mar 1, 2023

A proposal to mandate paid leave for workers, which New Mexico business owners said could hurt their businesses, could pass the Senate March 1. 

A task force assigned to develop a plan that requires workers to receive paid family and medical leave (PFML) presented a proposal to New Mexico lawmakers last year that would give New Mexico workers 12 weeks of paid family and medical leave. Senate Bill 11, the Paid Family and Medical Leave Act sponsored by Mimi Stewart, Michael Padilla, Christine Chandler, Linda Serrato and Patricia Roybal Caballero, will be voted on tonight, according to the Senate Floor Calendar.

“SB 11, the Paid Family and Medical Leave Act, would cost well over $400 million dollars if it becomes law. This is really a new TAX on employees and employers to pay out of pocket,” New Mexico Business Coalition said in an email alert on March 1. “Most workers are already dealing with the financial strain of inflation, and for many business struggling to survive this new tax could be the last nail in the coffin! The 12 weeks paid time off mandated under the PFMLA is in addition to the eight days of paid sick leave recently mandated and any other paid time off an employer offers.”

According to a survey conducted by the New Mexico Business Coalition at the end of last year with 79 small business owners in New Mexico regarding PFMLA, the proposal would in fact hurt their businesses as well as their employees.

“Overwhelmingly, business owners are completely opposed to this proposed legislation,” New Mexico Business Coalition President Carla Sonntag told New Mexico Sun. “Some of the responses showed frustration with government officials for putting this proposal forward and others indicated anger toward the micromanagement and unwieldy demands of elected officials on business owners. Some of the respondents said they cannot afford this on top of paid sick leave, after the Healthy Workplaces Act was signed into law in 2021 and went into effect on July 1, 2022.”

Some of the respondents said they would close their business and/or move their business to another state that is business-friendly, said Sonntag, a longtime Albuquerque resident.

The federal FMLA guarantees the employee will have the same or an equivalent job after their return to work, but it does not require the employee to be paid while they are taking leave. Instead, employees use accumulated paid sick leave or vacation for pay while they are out.

When asked if they support or oppose New Mexico’s proposal for mandated PFMLA that allows the employee to be paid from a state-administered Trust Fund, funded by quarterly employee and employer contributions, 94% of small business owners were opposed.

The proposed legislation would require employees to contribute half a percent of their earnings — around $5 for every $1,000 they make. This would be very difficult for small businesses to stay afloat.

“Small business is under enough strain and tracking of sick pay and other information for the government. This would be difficult at best to keep on top of more regulations,” someone wrote in the survey.

The proposal went before legislators in October 2021. If passed by the Senate this year, it will become law in 2026. Residents can make their voices heard by submitting a comment online. Tell NM legislators to oppose HB 11 HERE!