Senate GOP moves forward with tax credit, insurance product family leave proposals

The Minnesota Senate passed on Tuesday a bill that the GOP majority describes as a “free-market solution” to ensuring more Minnesotans have access to paid family leave.

The bill, introduced by Sen. Julia Coleman, R-Waconia, would allow insurance companies to offer paid family leave benefits product in Minnesota, which state law currently prohibits. The Senate is expected to approve another bill Wednesday to create a tax credit for small businesses that offer paid leave. 

“We have heard from Minnesotans about the need to ensure greater access to paid family leave. Businesses want to offer their employees more, and families need more help. My bill meets both needs,” Coleman said in a statement.

The DFL-controlled House, which favors a more robust family leave program backed by taxes and mandates, is unlikely to follow the Senate’s lead. Minnesota Democrats criticized the proposals as ineffective, especially for low-income workers.

“This is a classist attempt by Republicans to push a paid-leave option that is only accessible to people who can afford it,” the Minnesota Senate DFL caucus tweeted. “Paid family leave should not be kept behind a paywall.”

Under the Senate insurance bill, paid leave would remain an optional benefit, and either employers or employees would have to cover the premiums. In other states, high-wage workers who already have comprehensive benefits are most likely to have access to private paid leave insurance, experts say.

The tax credit would be capped at $3,000 per employee. It would be open to businesses with fewer than 50 employees, which employ about 38% of Minnesota’s workforce. 

The House DFL’s family leave proposal would create a state-run program similar to unemployment benefits, which employees and employers would pay into. Workers would be eligible for up to 12 weeks of paid leave.

Minnesota is one of 40 states where workers aren’t guaranteed paid family leave. Nationwide, fewer than one in four workers had access to paid family leave in 2021, according to the Bureau of Labor Statistics.

Paid family leave is linked to better health outcomes for adults and children, more financial security for employees and higher likelihood of caregivers — especially women — remaining in the workforce.