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PASSED
in the State House of Representatives
on May 11, 2018, by a vote of
90-53
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Purpose: To levy a 0.136% ($16.3 million) payroll tax on employees to pay for a state-mandated, government-run family leave insurance program.
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Analysis: H.196 would allow an employee to leave his or her job and collect 70 percent of wages, or “an amount equal to a 40-hour work week paid at a rate double that of the livable wage…whichever is less,” for a maximum of 12 weeks per year of parental leave to care for a newborn, or six weeks of family leave to, for example, care for a sick parent. To pay for the program a 0.136% payroll tax would be levied on all Vermont employees. However, if the demand for the benefit exceeds the amount raised at this rate, the legislature will have to adjust the rate upward to raise enough revenue.
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Those voting YES supported the program, believing it will make Vermont more “family friendly” and appealing to young workers.
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Those voting NO see this as another burdensome “mandate from Montpelier” on businesses, especially small businesses. That the tax rate has been set artificially low, and will have to be raised to meet demand. And, that this bill levies a $16.3 million tax on all hard-working Vermonters even though only a fraction of them will have occasion or the ability to benefit from the program, which is unfair. If the state were to create a paid family leave insurance program, it should be voluntary.
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