Scott Seizes Opening For Voluntary Paid Family Leave Program

Dec 12, 2019

In a move that could recast the partisan political debate over paid family and medical leave in Vermont, the Scott administration has inked a two-year contract with the state workers union that will create an unprecedented paid leave benefit for 8,500 state employees.

Republican Gov. Phil Scott and Democratic lawmakers all support the creation of a paid family leave program in Vermont. But while House Speaker Mitzi Johnson and Senate President Pro Tem Tim Ashe are pushing for an all-in program that requires a mandatory payroll tax on virtually all Vermont workers, Scott favors a voluntary plan that would allow residents to opt in if they choose.

Scott’s new contract with the Vermont State Employees Association, ratified by union members late last month, includes a paid family and medical leave benefit that will be funded by the state.

Administration officials also say they’ll work with prospective insurers to make sure that businesses and individual employees who aren’t affiliated with state government can nonetheless purchase the same paid leave benefits now being offered to state workers.

“It’s really exciting because it creates a lot of momentum right now … to get the work started, so that we are ready to roll on July 1 [2020] and provide the agreed-to benefit,” Administration Secretary Susanne Young said Thursday.

"We always have said that we did not need legislative approval." — Administration Secretary Susanne Young

Scott proposed a similar framework to lawmakers last year: a government-funded benefit for all state employees, with the option for other Vermonters to opt in. Lawmakers, however, rejected his proposal, saying a voluntary approach wouldn’t create a risk pool large enough to support a successful paid leave insurance program.

Young said the advent of a new contract with the state workers union has allowed the administration to move forward with its plan via executive prerogative.

“We always have said that we did not need legislative approval,” Young said. “And we took it up with the union in the course of bargaining, and they agreed to the benefit, and we’re really quite excited about that.”

Lawmakers could still thwart Scott’s plan. The administration can’t execute the new union contract unless the Legislature approves funding for the plan — and lawmakers could use their control over government purse strings to unravel the deal.

Lawmakers could also supersede Scott’s voluntary paid leave program by approving legislation that creates a mandatory program. House Majority Leader Jill Krowinski said Democrats in the Vermont Statehouse plan to do precisely that.

“I’m supportive of anything we can do to get more Vermonters access to paid leave, but to be clear, [Scott’s plan] does not do that, and we will stay on track to pass a bill that helps everyone,” Krowinski said Thursday.

"I'm supportive of anything we can do to get more Vermonters access to paid leave, but to be clear, [Scott's plan] does not do that, and we will stay on track to pass a bill that helps everyone." — House Majority Leader Jill Krowinski

While Democratic leaders in both chambers of the Statehouse have vowed to pass a mandatory paid leave program early next year, Scott has all but assured he’ll veto the bill. And based on vote counts from the last legislative session at least, Democrats could have a hard time finding the votes for an override.

The paid leave proposal passed by a vote of 92 to 52 in the House, meaning Democrats were at least a few members shy of the 100 votes needed for a veto override.

Young said the paid leave benefit for state employees will come at a projected cost of $2.5 million annually. It would provide 60% wage replacement for up to six weeks of leave for the birth of a child, an adoption or personal illness. It would also allow six weeks of paid leave to care for an ailing family member.

Commissioner of Financial Regulation Michael Pieciak said his office will soon issue a request for proposals to insurance companies who might be interested in offering the paid leave benefit.

According to preliminary estimates, Pieciak said it would cost non-government employees about $260 per person annually to opt in to state employees’ paid leave plan.

Steve Howard, executive director of the Vermont State Employees Association, said the paid leave provision in the union’s new contract shouldn’t be interpreted as an endorsement of the governor’s preference for a voluntary approach.

“VSEA is on record supporting the mandatory program for all Vermonters,” Howard said. “We support that and will continue to advocate for that.”

If for some reason the paid leave program outlined in the new union contract does not come to pass, employees will instead get a .25% pay increase next year.

UPDATE: This post was updated to include information about a contingecy provision for state workers, in case the paid leave program does not materialize