Senators to introduce bill expanding access to paid family leave

WASHINGTON, D.C. – This week, U.S. Senators Deb Fischer (R-Neb.) and Angus King (I-Maine) will introduce the Paid Family and Medical Leave Tax Credit Extension and Enhancement Act. By making the Paid Family and Medical Leave Employer Tax Credit permanent, the legislation makes it easier for businesses of any size to offer plans to employees.

Senators Fischer and King led the effort to establish the country’s first ever nationwide PFML policy, which was included in the 2017 Tax Cuts and Jobs Act and implemented in 2018.

The Senators’ legislation builds on the 2017 law to better include working families and hourly workers. The legislation also provides additional options for businesses to earn the paid leave tax credit, such as paying for PFML insurance products, and it requires greater outreach efforts to raise awareness about the credit.

“Americans shouldn’t have to choose between making ends meet and taking care of family—that’s why Senator King and I passed the first ever nationwide paid family leave law. Now, we need to make that legislation permanent and expand access to paid family leave. Our new bill will encourage more businesses to offer paid family leave to more working Americans,” said Senator Fischer.

“I have often said that Maine is one big town—big community—with long roads. And when a member of our community is hurting, we drop everything to take care of our own. However, no one should have to choose between caring for our families or receiving the next paycheck to put food on the table. That’s why I’ve been working with my Republican colleague, Deb Fischer of Nebraska, to introduce the Paid Family and Medical Leave Tax Credit Extension and Enhancement Act which makes the PFML tax credit permanent.  By making this extension permanent on a bipartisan basis, we’re prioritizing people over politics –and supporting those who care for one another in times of need,” said Senator King.

Nebraska Stakeholder Support:

“The Paid Family and Medical Leave Tax Credit Extension and Enhancement Act presents a reasonable approach towards empowering small businesses to take care of their most valuable assets: their employees. The Nebraska Chamber of Commerce and businesses across the Cornhusker State are grateful for Senator Fischer's continued leadership on this crucial issue,” said President of the NE Chamber of Commerce Bryan Slone.

“The Nebraska Grocers and all our affiliates thank Senator Fischer for her commitment to businesses, families, and communities. By embracing incentives, rather than imposing burdensome and impractical mandates, this Act recognizes that business owners want to provide flexibility to their most valuable resource - their dedicated employees. The Paid Family and Medical Leave Tax Credit Extension and Enhancement Act is genuinely helpful, responsible policymaking which empowers both employers and employees,” said Nebraska Grocery Industry Association Executive Director Ansley Fellers.

“The Greater Omaha Chamber is grateful to Senators Fischer and King for introducing this important legislation.  While a broad representation of our membership offers various types of paid leave, incentives will matter to companies and businesses who have greater barriers to offering paid leave, especially our smallest members.  This proposed legislation allows us greater opportunities to care holistically for employees the way we strive to, and aligns with the Chamber’s mission,” said Greater Omaha Chamber Chair Carmen Tapio.

Full List of Nebraska Endorsements: Nebraska Chamber of Commerce, Nebraska Grocery Industry Association, Nebraska Hospitality Association, Nebraska Retail Federation, Omaha Chamber of Commerce, Mutual of Omaha.

National Stakeholder Support:

“The proposal by Senators Fischer and King will be a great help to millions of working parents. The tax credit offers a means for large and small employers to provide their workers with an insurance benefit to cover their paid family and medical leave when needed. It also makes it easier for employers to qualify for the credit which will help expand access to more people.  No one should have to choose between a paycheck and caring for themselves or a loved one. Thanks to this proposal, fewer people will have to make that choice. We applaud Senators Fischer and King for advancing this important legislation,” said American Council of Life Insurers President & CEO Susan Neely.

“The AICPA is pleased to lend our support to the bipartisan Paid Family and Medical Leave Tax Credit Extension and Enhancement Act. Over a period of several months, we worked closely with staff from both Senator Fischer and Senator King’s offices to help fine-tune the administrability and reach of the legislation. If enacted, the proposed legislation should pave the way for more employers to offer the benefit of paid family and medical leave to their employees by making the related tax credit permanent,”said AICPA Vice President of Tax Policy & Advocacy Melanie Lauridsen.

“BPC Action endorses Senators Fischer and King’s bill to make permanent and expand the employer tax credit for paid family and medical leave, known as 45S. This tax credit helps businesses provide paid family and medical leave benefits to hard-working Americans and we encourage Congress to take up the bill,” said Bipartisan Policy Center Action President Michele Stockwell.

“For years in tight labor markets, restaurant operators have looked for benefits like paid family leave to help them recruit skilled hospitality professionals. This legislation would make permanent the Paid Family, Medical Leave tax credit pilot program, ensuring that it continues to be an option for those owners considering or offering PFML. In this current economic environment that has operators constantly looking at their bottom line, we appreciate Sens. Fisher and King’s efforts to support small business restaurant owners and their employees by continuing this program,” said National Restaurant Association Executive Vice President of Public Affairs Sean Kennedy.

“Expanding access to paid family leave (PFL) is an essential pro-worker policy that rural Americans throughout the country deserve but have little to no access to. Rural workers, who often work for smaller businesses, live farther from hospitals, and skew older are disproportionately affected by a lack of paid leave. Without it, workers must take unpaid leave or exit the workforce entirely to care for their family – hurting both their personal finances and the local economy. Sens. Fischer and King’s bill is a necessary step forward for hardworking Americans. By making the paid family and medical leave tax credit permanent, this bill would provide much-needed certainty for businesses who rely on the credit to retain workers and maintain productivity as well as families whose health and economic security benefit from PFL. As an organization dedicated to uplifting rural Americans’ policy priorities, OCP looks forward to working with their offices and the PFL Working Group to establish a federal program guaranteeing workers paid family and medical leave,” said One Country Project Founder and former U.S. Senator Heidi Heitkamp.

Full List of National Endorsements: American Association of Retired Persons (AARP), American Council of Life Insurers (ACLI), American Institute of Certified Public Accountants (AICPA), Bipartisan Policy Center (BPC), National Federation of Independent Businesses (NFIB), National Restaurant Association, One Country Project (OCP).

Background:

The Tax Cuts and Jobs Act (TCJA) created a two-year general business tax credit for employers that voluntarily offer up to 12 weeks of PFML to employees. Congress has extended the credit through 2025. The credit also includes an income cap to ensure it remains targeted to employees who need it the most.

Under current law, an employer must meet the following criteria to claim the credit: offer all qualifying employees at least two weeks of PFML, have a written PFML policy in effect, and pay at least 50% of an employee’s normal wages while on PFML. According to the Bureau of Labor Statistics (BLS), only 20% of workers at employers with less than 99 employees have access to PFML.

Senators Fischer and King’s legislation builds on the existing credit by making the following changes:

Making the credit permanent

Provides certainty to businesses by making the credit permanent.

Updating the treatment of paid leave required by state or local mandates

Allows eligible employers to receive the credit for leave provided in states without PFML mandates or for leave offered in excess of any state or local mandate. Currently, employers providing PFML under state or local government mandates are ineligible for the credit — meaning that some employers with operations in both non-mandate and mandate states are ineligible for the credit.

Supporting coverage of PFL insurance premiums

Allows employers to claim the credit for premiums paid for PFML insurance products that cover qualifying employees. The structure mirrors the current credit – enabling employers to receive up to a 25% credit towards yearly premiums, depending on the percentage of wages the insurance plan replaces.

Reducing the minimum employment period requirement

Provides employers the option to offer PFML to employees at 6 months and better target the credit towards younger workers.

Requiring greater outreach and awareness

Requires the Small Business Administration and Internal Revenue Service to conduct targeted outreach, education, and technical assistance to assist in increasing awareness of the credit.

Click here to read a summary of the legislation.

Click here to read the text of the legislation.