Gov. Phil Scott on Tuesday announced the creation of a paid family and medical leave benefit for state workers that private-sector employers and individuals will eventually have the option of buying into.
The launch of the “Vermont FMLI” plan marks perhaps the most significant development in the years-long push to expand access to paid leave benefits in Vermont.
But Democratic leaders in the Legislature say Scott’s plan falls short of the universal paid leave program they want to deliver for Vermonters.
“I look forward to reviewing the details of the governor’s program, but at first glance, it does not meet the needs of Vermonters in this moment,” House Speaker Jill Krowinski said in a written statement.
"What will happen is that people who can afford this benefit will participate in it, and those who need it the most won’t have access to it when they need it.”Michelle Fay, Voices for Vermont's Children
Krowinski has previously led the push in Montpelier for a universal program that uses a mandatory payroll tax to fund paid leave benefits for nearly all workers in the state.
“We have an opportunity to make Vermont a state that can lead the nation in supporting working Vermonters and growing a vibrant economy in all 14 counties,” Krowinski said.
Scott vetoed a mandatory paid leave bill approved by the Legislature in 2020; he hinted Tuesday that any similar proposal in 2023 would face the same fate.
The Republican governor said Tuesday that he and the Democratic-controlled Legislature agree on the need to expand paid leave benefits in the state.
“However, our differences in the past have been more about how to pay for it,” Scott said. “I hear from Vermonters over and over again that they’re already burdened enough and don’t want any new taxes. The innovative approach we’re launching today gives Vermonters and employers the choice to opt in to this program.”
Scott’s paid leave program will be administered by The Hartford, a national insurance carrier based in Connecticut. Beginning in July of 2023, all 8,000 or so state employees in Vermont will receive up to six weeks of paid leave annually at 60% of their normal salary.
Paid leave benefits will cover:
- the birth of a child, and to care for a newborn
- adoption of a child, or placement of foster child
- serious health condition that makes someone unable to work
- caring for sick immediate family members
- qualifying military-related disruptions in the household
In July of 2024, private-sector employers will have the option of purchasing paid leave benefits for their workers. And in July of 2025, workers whose employers haven’t signed up for the paid leave benefit will be able to enroll in an individual market.
Commissioner of Financial Regulation Kevin Gaffney said employers who want to purchase more generous paid leave packages will be able to tailor benefits with The Hartford accordingly.
“It is designed to be flexible, so that employers who opt into the program can purchase additional coverage if they choose,” Gaffney said.
New Hampshire launched a similar program earlier this year with the insurance carrier MetLife, and open enrollment for businesses in the Granite State opened on Dec. 1. Individuals will be able to purchase paid leave benefits starting in January.
New Hampshire is offering tax credits to encourage businesses to sign up for what Gov. Chris Sununu has billed as “the first voluntary paid family and medical leave program in the country.”
Scott said Tuesday that he’s open to using financial incentives in Vermont as well.
“I believe that just having the benefit itself and offering it to employers and employees will be enough,” Scott said. “But if tax credits are something the Legislature would consider, I’m always encouraged by tax credits, so if they so choose we’d be more than willing to have that conversation.”
Longtime paid leave advocates aren’t so confident that free-market forces will deliver paid leave benefits to the Vermonters that need them most.
Michelle Fay, executive director of Voices for Vermont’s Children, said Tuesday that paid leave benefits are critical to economic security and child development.
“There’s a ton of research about how having quality bonding time at the time of birth or adoption or foster placement is critical to attachment between caregivers,” Fay said. “And we know that a solid attachment with a caregiver is a key to a child’s development throughout their life.”
But Fay said the opt-in framework favored by Scott will end up excluding Vermonters on the economic margins.
“What will happen is that people who can afford this benefit will participate in it,” Fay said. “And those who need it the most won’t have access to it when they need it.”
Fay said six weeks of leave at 60% wage replacement is also insufficient to achieve the policy goals behind paid leave. Proposals previously under consideration in the Legislature contemplated leave times of six to 12 weeks, and wage replacement of 70% to 90%.
Eleven states, including three in New England, have used payroll taxes to fund statewide paid family and medical leave programs. Vermont is already one of 16 states that requires employers to provide paid sick leave.
The state will pay about $2 million next year to provide paid leave benefits to state employees — about $4.50 per week for each worker. Gaffney said premiums for private-sector businesses will likely run between $4 and $8 a week per employee.
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