Committee hears HB193 on paid parental leave, payroll-tax changes and sick-leave amendment; department projects long-term solvency but large later-year payouts

The Senate Finance Committee heard an extended presentation on HB193, a multi-part bill that would add mandatory paid sick leave for employers with 10 or more employees (seasonal employees exempt) and create a paid parental leave program funded through modest payroll contributions and administered by the Department of Labor and Workforce Development.

Representative Carolyn Hall said the paid parental leave benefit would cover childbirth, adoption and legal guardianship, provide 8 to 12 weeks of leave depending on fund solvency, run concurrent with federal FMLA and state family-leave rules, and be capitalized by payroll-tax contributions diverted into a new trust fund. The bill sets a maximum qualifying wage base of $54,500 and a weekly benefit of $524, and sponsors proposed an implementation date of Jan. 1, 2030 for parental leave to allow capitalization time.

Hall described the contribution mechanics: employees would contribute 0.15% toward the parental leave fund while employers would contribute 0.2%; employer contributions could be diverted to the UI trust fund if necessary to protect solvency. The bill also adjusts existing STEP and TVP contribution shares and would take some effect Jan. 1, 2027 for unemployment insurance changes.

Senator Kaufman asked about long-term solvency projections; Hall said the Department of Labor's projections indicate the fund remains solvent through about 2040 with anticipated declines thereafter, and her understanding was that the fund would remain solvent through 2084 under the current assumptions, but she deferred technical detail to departmental actuaries.

The committee discussed a house-floor amendment that added a mandatory paid sick-leave requirement (10+ employees) that differs from HB161’s 50-employee threshold; sponsors said the amendment aimed to address implementation difficulties identified after ballot measure 1. Several senators raised concerns about the full exemption for seasonal employees, noting tourism and seafood employers' operational constraints and public-health considerations.

Paloma Harper, director for the Division of Employment and Training Services at the Department of Labor, answered committee questions and said the legislation provides the department discretion to set the maximum qualifying weeks (8–12) based on fund solvency. Senator Kiel then reviewed fiscal notes showing initial administrative costs and later-year rising benefit payouts: FY27 costs to various departments and grants/benefits projections that increase in FY30 and FY31, and revenue projections in the tens of millions in early years from diverted contributions.

After fiscal-note review and discussion, the committee set HB193 aside for further consideration; the bill will return for additional hearings and detailed actuarial analyses.