In the closing weeks of the 2021 state legislative session, ERIC successfully defeated Maryland’s paid leave insurance program and significantly pared down state COVID-19 emergency paid sick leave legislation. ERIC had been fighting the two proposals since the beginning of the year.
The pieces of legislation, HB 375 and HB 581, initially proposed broad expansions of paid leave requirements placed on employers in the state. However, following continued opposition from ERIC and our allies in the business community, these proposals have been changed to prevent new burdens from being placed on businesses already trying to recover from the ongoing pandemic.
HB 375 – Paid Family and Medical Leave Insurance Program
HB 375 was left in the Maryland Senate Finance Committee and effectively died for the year. Delegate Valderrama and Senator Hayes have previously introduced legislation to create a state paid family and medical leave insurance program for several years; their efforts found new momentum this year due to the impact of COVID-19. ERIC pushed back on the creation of such a program during an ongoing pandemic and also addressed many of the specific issues contained in the bill, including:
- Lack of exemption for equivalent paid leave plans provided by employers
- Lack of preemption of local or municipal paid family and medical leave ordinances
- Funding mechanism split between employers and employees
- Divergence from standards and definitions of the federal Family and Medical Leave Act (FMLA)
The program outlined by HB 375 included a series of major employer burdens and inconsistencies with FMLA standards that would not have been feasible for complying businesses and went significantly beyond other state programs. Even though this legislation has been defeated, Maryland remains a priority state in the paid leave policy space, and similar proposals will be sure to return for next year.
HB 581 – COVID-19 Emergency Paid Sick Leave
Before being sent to Governor Hogan for signature, HB 581 was drastically reduced in scope to not impact employers for the foreseeable future, thanks to ERIC’s efforts.
This legislation originally included an unfunded mandate that employers provide a minimum of 14 days of paid emergency health leave for illness or medical need related to a public health emergency, including the current COVID-19 pandemic. Not only would this leave have been required of employers in addition to any other paid leave already provided to their employees, but it did not provide any tax credits or financial support for businesses already struggling to stay afloat during a crisis.
ERIC fought to highlight the redundant nature of such a mandate and the negative impact that it would have on vulnerable businesses throughout the state, even writing an op-ed opposing these paid leave proposals.
In the end, state lawmakers recognized the sweeping problems that a broad, unfunded emergency paid leave mandate would create for the business community. The final version of HB 581 limits the applicability of this leave to essential employers within the state and does not take effect until the state or federal government provides funding to offset the costs accrued by employers in providing these additional paid leave benefits. Essentially, employers are not forced to provide additional leave unless it is paid for by the government. No such funding has currently been provided at the state level, but there remains a possibility that federal tax credits could be extended for this purpose in the future.
These legislative developments represent a huge win for ERIC and our allies but paid leave discussions at the state and federal levels are not going anywhere.