AUGUSTA — Paid family leave advocates rallied Thursday to build support for a compromise bill that is under attack from some business groups that say the proposal will be a burden for employers in Maine.

The Mills administration also weighed in publicly for the first time and recommended changing the plan to reduce the burden on businesses, including tighter eligibility standards for workers who ask for time off and less generous pay for those who qualify for leaves.

Sen. Mattie Daughtry, D-Brunswick, the bill’s co-sponsor, said she was “working to find a durable compromise” that takes into account the interests of workers, families and businesses. Daughtry, along with co-sponsor Rep. Kristen Cloutier, D-Lewiston, and other supporters, held a news conference outside the State House and lobbied for the bill at a public hearing before the Labor and Housing Committee on Thursday.

The public hearing continued for several hours, with supporters sharing stories of workers unable to care for newborns or sick family members without giving up their jobs and opponents testifying about businesses already struggling with rising costs and a shortage of workers.

An aide to Mills testified Thursday afternoon “neither for nor against” the bill, L.D. 1964, instead making recommendations to steer the proposal in a way to make it less of a burden on employers.

Elise Baldacci, Mills’ deputy chief of staff, said that while the governor “deeply and personally understands the importance of paid family and medical leave,” she also recognizes “the real impacts that the potential enactment of this proposal will have on Maine’s employers, their customers, buyers, patients and clients.”

Baldacci said a paid family leave bill should “provide as generous a statewide leave policy as possible while recognizing the operational needs of our very diverse workforce and employment base.”

SEEKING REDUCED BENEFITS

Baldacci said the governor would like to see more hardship exemptions for employers, increase the time it takes for employees to become eligible for the program and reduce payouts to workers who qualify for leaves. The Mills administration did not make a specific suggestion on reducing benefit amounts but noted that other programs replace wages at about two-thirds of wages, while the current Maine proposal would provide 75% to 90% of wages.

“We believe that this proposal should better balance the needs of employees to take time to care for themselves and their loved ones with the incentive to return to work. Presently, programs like short-term disability replace wages at approximately 66%, and many states have come closer to those percentages when implementing (paid family and medical leave) laws,” Baldacci said.

Proponents already have dialed back the bill to make benefits less generous for workers and to create more flexibility for business owners who employ seasonal workers by not requiring that jobs be held open.

The bill calls for up to 12 weeks of paid leave for virtually all workers in Maine who meet certain qualifying conditions, such as the birth of a child, a worker’s serious illness, or a sick relative who needs care.

But Quincy Hentzel, president and CEO of the Portland Regional Chamber of Commerce, said that without substantial revisions the bill will harm business owners.

“Our members acknowledge the importance of addressing family and medical leave for employees, but as it stands, this proposal represents an unworkable and costly approach to achieving that goal. Without significant modifications to the legislation before you, Maine’s workforce and economy will suffer,” Hentzel said.

The Maine State Chamber of Commerce and HospitalityMaine, which represents businesses such as restaurants and hotels, also have come out in opposition.

But Selecca Bulgar-Medina, director of the Maine Small Business Coalition, said paid leave will help small business owners because they can’t afford to offer a paid leave benefit to their workers, while large businesses can.

“It levels the playing field so that all businesses will be able to offer this benefit,” Bulgar-Medina said, noting that it will help small businesses recruit and retain employees.

“This plan is designed to support businesses,” Daughtry said.

“We know we are currently in a workforce crunch and we have been aware of this even before the COVID-19 pandemic,” Daughtry said. “Older Mainers are retiring and there aren’t enough younger Mainers to fill the workforce. Maine is the oldest state in the nation, and we know we must do more to support our aging workforce and encourage younger workers to move to Maine.”

The bill faces opposition from Republicans. Rep. Joshua Morris, R-Turner, testified against the bill as a new tax on struggling workers and businesses.

“At a time when everyone is struggling with rising prices and inflation, we should not be adding to that burden by taking more money from their paychecks weekly for a program that they may never use,” he said.

The bill exempts businesses with 15 or fewer employees from paying into the program, although its workers could still claim benefits.

To pay for benefits, the proposal calls for a payroll tax of about 0.7% to a maximum of 1%, split evenly between employer and employee.

Workers who qualify for leave would receive 90% of half of the state’s average weekly wage, which is currently $1,036. For every dollar earned above that amount, payments would be 75% of the workers’ regular wages. The maximum weekly benefit would be the state’s average weekly wage. The maximum any employee could receive would be $12,432 over 12 weeks. The Mills administration is recommending less generous payouts.

EMPLOYER EXEMPTIONS A STICKING POINT

The hardship exemptions for small businesses with a lot of seasonal employees would allow employers to fill the jobs of workers who take paid leave and not hold their jobs open for them.

Hentzel said the exemptions are burdensome and not workable.

“Small employers would face a lengthy and costly appeals process at both the administrative and judicial levels. This process is not feasible for the types of smaller employers this section aims to protect,” Hentzel said.

The Mills administration agreed with Hentzel that the bill is too complex regarding the hardship exemption.

“The governor, therefore, recommends that the committee strengthen the proposed hardship exemption by adopting the same hardship language included in Maine’s current earned paid leave law. That language states that use of leave must be scheduled to prevent undue hardship on the employer as reasonably determined by the employer,” Baldacci said. Maine’s current paid leave law has a maximum benefit of 40 hours per year, while the bill would provide for 12 weeks.

The Mills administration also has recommended that before an employee becomes eligible, they must be working for the same employer for 120 days. The bill currently makes employees eligible when they earn at least six times the average weekly wage, or about $6,000, regardless of how long they have worked for a particular employer.

Baldacci noted that while the bill is attempting to carefully weigh employee benefits with impacts on businesses, there’s also a potential referendum that could be approved by voters if the Legislature does not act.

The Maine Women’s Lobby and progressive advocacy group Maine People’s Alliance have collected more than 80,000 signatures to place the issue on a future statewide ballot.

Destie Hohman Sprague, executive director of the Maine Women’s Lobby, said if the bill is too watered-down or the Legislature does not act, the groups stand ready to submit the signatures in July to get the measure on the November 2024 ballot.

“We are sticking to our positions,” Hohman Sprague said. “If the Legislature does not act in the next six weeks, we are submitting our signatures this July for the ballot.”

If Maine passes the bill, it would join 12 states and the District of Columbia with similar paid family leave laws, including Massachusetts, Connecticut and Rhode Island. Minnesota’s governor recently signed a bill into law. Laws also could be passed this year in Michigan, Illinois and New Mexico.

Vermont and New Hampshire recently enacted voluntary paid family leave laws.

There is no national paid leave mandate, but a federal law dating to the 1990s requires companies to hold jobs open for workers needing to take unpaid leave. Most developed countries, including Canada, mandate paid family and medical leave.

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