Legislative changes to the Family Medical Leave Act (FMLA) are moving steadily through House Committees with a 0.65 percent premium on all wages effective Jan. 1, 2021. HR 5 is one stop from the floor with a hearing Tuesday in the House Ways and Means Committee. Its benefits and costs have drawn attention, and paid FMLA is a national movement. It has been a top priority of the House DFL, as indicated by the single-digit bill number.
Education is a female dominated industry, and paid FMLA is projected to have a positive impact on educators and support staff and on society in general by supporting families and children. Learn more.
However, little attention has been paid to its immediate and longer term effects on Minnesota education.
Impact
The immediate impact will be a 0.65 percent premium on all Minnesota wage subject to unemployment insurance beginning Jan 1, 2021. [HF 5, line 29.31] In FY ’21 that will be at least a $23 million cost to Minnesota’s school districts, charters and cooperatives, based on FY ’18 salary data supplied by MDE. View the district run, showing the impact by school district in Minnesota.
Employers may charge 50 percent of the premium to employees, but only if that does not result in a reduction in government contracted wages, which means all school district contracts. This means the 2019-21 master agreements that are currently being negotiated would need to address this premium cost if employees were to contribute 50 percent of the premium.
There are provisions in the bill for approved private plans that reduce the premiums. For some districts this may be an option to explore.
The election of whether to use the state paid FMLA will be the choice of the employee. Districts and unions will need to discuss the implications of HR 5 on the usage of paid sick leave with FMLA in light of HF 5 should it become law and consider adjustments in contracts on the usage of sick leave.
Whereas increases in TRA of $12 million annually for five years are covered by increases in state aid to keep school districts and funds for the classroom whole, no discussion has occurred nor provisions introduced to reimburse districts for premium costs. This will make whatever percentage increase is provided in year two, not truly that percentage, but about 0.33 percent less. Looking into the next biennium, schools will not start the 21-23 biennium at 0 and 0, but at -0.67 percent for each year.
This is different than how Gov. Tim Walz and Commissioner Mary Cathryn Ricker have repeatedly described their efforts to “freeze special education costs,” as a way to make the proposed 3% and 2% formula increases “truly 3 and 2.”
Resources
View the district run, showing the impact by school district in Minnesota
