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January 29, 2019
Senator Lou D’Allesandro, Chairman
Senate Finance Committee
State House, Room 100
Concord, NH 03301
Re: SB 1-FN
Dear Chairman D’Allesandro and Members of the Finance Committee,
I am writing today in opposition to Senate Bill 1-FN, an act relative to family and medical leave. This legislation would create a new entitlement for family and medical leave in New Hampshire. I apologize that a prior commitment will keep me out of state for the public hearing.
Americans for Prosperity-New Hampshire strongly believes that compensation, whether wage or non-wage, are decisions best made between employers and employees, to meet the needs of each particular workforce. While for some employers, paid family and medical leave (PFML) could be an important tool for recruitment, retention and job satisfaction, other employers might find that higher wages are the appropriate tool to meet these needs.
SB 1 short-circuits those critical discussions between employers and employees and arbitrarily picks a non-wage compensation for employees, at a cost of 0.5% of their wages. This ultimately makes it harder for some employers to attract and keep the right workers.
While proponents of the legislation suggest that a state-mandated PFML program will necessarily help in recruiting workers, there is not yet evidence to demonstrate this claim is valid. While this may be true for some employers, it seems equally likely that lowered wages as a result of PFML would hinder workforce recruitment in other cases.
While SB 1 may appear to be an improvement over last year’s HB 628, which potentially created a huge liability for the state, this new bill would now place the burdensome expense on employers and the workers who would have to forgo a portion of their wages for the program.
Equally as concerning is that, for many employees, SB 1 would give them family leave at the expense of inferior medical leave. The Department of Insurance indicated in last year’s debate that the majority of full-time New Hampshire employees currently already hold short-term disability policies. For many of these policies, the benefit is better than the 60% of wages for 12 weeks currently included in SB 1, with many policies reimbursing employees 100% of wages.
An additional consequence of this legislation is that it allows the Commissioner of Employment Security to raise the tax on wages without approval of the Legislature. Thus, if the fund moves toward insolvency, the 0.5% tax could escalate to a 1% tax or greater.
Finally, this new program would hit the already overburdened small businesses of New Hampshire hardest, adding additional compliance and regulatory requirements that take their time and resources away from growing New Hampshire’s job market and economy.
Thank you for your consideration on this important issue for New Hampshire’s economy. If you have any questions, please feel free to contact me at email@example.com or 603-303-9297.
Americans for Prosperity-NH