Minnesota Senate approves paid leave plan; DFL says it won't help enough

Minnesota Senate Republicans approved legislation Tuesday that allows insurance companies to offer paid leave benefits to employers.

The bill is a permission slip to insurers, which are banned by Minnesota law from offering a paid leave product here. Small employers with 50 or fewer workers who offer the benefit would be eligible for tax credits of up to $3,000 per worker to offset some of the cost.

"Members, this proposal is coming from a mother who gave birth to her first child without any access to paid family leave benefits," said state Sen. Julia Coleman, R-Waconia, and the bill's author.

The measure passed, 37-29, over objections from Democrats who say an optional program with limited state funding would not address the needs of workers. The Senate's tax bill includes $19.6 million for the credits, enough to cover 6,500 workers if every company took the maximum.

Democrats have long advocated for a broader, state-run program that guarantees 12 weeks of paid family and medical leave that is paid for through payroll taxes on companies that don't already offer the benefit.

"I’m glad this conversation is finally happening in the Minnesota Senate, but let’s not kid ourselves, and let’s not kid the people of Minnesota. This isn’t going to solve it," said state Sen. Susan Kent, DFL-Woodbury. Kent has proposed a state-run program.

Republicans blocked debate on a state-run paid family and medical leave program by ruling a DFL amendment out of order. The vote to block was 35-30.

Lawmakers in both parties say they want to expand paid leave benefits to more workers, which are currently covered by a patchwork of employer benefit policies. Many larger companies offer such benefits, but small business owners have said they can't afford to match them.

Earlier this year, Minnesota had just one unemployed worker for every 2.8 available jobs. The tight labor market is spurring wage gains and has placed a renewed focus on employee benefits, including paid family leave.

"I wish I would’ve had that, which is why I provide that to my employees," state Sen. Ann Johnson Stewart, DFL-Minnetonka, said during Tuesday's debate. Johnson Stewart runs an engineering company. While working for a different firm in the 1990s, Johnson Stewart said she returned to work within one week of having a child because that company did not offer paid leave.

But Republicans in control of the Senate oppose the tax increase on businesses called for in the DFL plan.

"For those saying, 'Boy, it’d be nice if I could offer this through a government program,' they’re going to be paying about a half a billion dollars," said state Sen. Eric Pratt, R-Prior Lake. "It’s not free."

The legislative session ends May 23. Asked if he would make this a take-it-or-leave-it offer during end-of-session negotiations with Walz and House Democrats, Senate Majority Leader Jeremy Miller said he hoped to have "continued discussions" about the Senate's approach.