Summary:

 House Bill 446 (HB 446), relating to employment, amends the Early Childhood and Education and Care Fund to allow appropriations for parental leave compensation. HB 446 enacts the Parental Leave Act and Creates the Supplemental Paid Parental Leave Fund. HB 446 Provides for the Paid Parental Leave Program and the Supplemental Paid Parental Leave Program to pay an eligible applicant a percentage of the employee’s wages to allow the applicant to bond with a new child. HB 446 limits the time allowed for paid parental leave. HB 446 excepts certain employees. HB 446 provides for the administration of the program by the Workforce Solutions Department. HB 446 preempts similar programs. HB 446 creates a temporary advisory committee.  

Legislation Overview:

 House Bill 446 enacts parental leave compensation, a fund and programs to provide parental leave.
SECTION 1 amends the Early Childhood Education and Care Fund in Subsection E to insert direction for distribution pursuant to Subsection D of this section and appropriations pursuant to Subsection F of this section.
Subsection F is inserted:
F. In addition to the distribution pursuant to Subsection D of this section and appropriations pursuant to Subsection E of this section, the legislature may appropriate money from the Early Childhood Education and Care Fund to the Workforce Solutions Department for the purposes of paying leave compensation to employees and self-employed individuals covered by the Paid Parental Leave Act. 
SECTION 2 specifies that Sections 2 through 14 of this act may be cited as the "Paid Parental Leave Act” (Act). 
SECTION 3 provides definitions as used in the Act.
SECTION 4 creates the Supplemental Paid Parental Leave Fund (Fund). 
A. The Fund is created in the state treasury and shall be administered by the department. The fund shall be held for the benefit of the employees and self-employed individuals who opt in to paying into the Fund and shall consist of all revenue, including any fees collected pursuant to the Act. Money in the Fund shall be invested by the state investment officer. Income from investment of the Fund shall be credited to the Fund. 
B. Money in the Fund is appropriated to the department to distribute supplemental leave compensation pursuant to the Act and to cover the costs of administration and outreach for the Paid Parental Leave Program pursuant to that Act. 
C. Money shall be disbursed from the Fund  in the usual way. Any unexpended or unencumbered balance remaining at the end of a fiscal year shall not revert or be transferred to any other fund. 
SECTION 5 specifies applicability of the Paid Parental Leave Program (Program) and the Supplemental Paid Parental Leave Program (Supplemental Program). It also specifies employee contributions.
The Act applies to: 
(1) all public and private employees who are in the state of New Mexico, except those employees who are employed by the United States;
(2) the employers of employees as described in Paragraph (1) of this subsection, whether or not the employer is physically located in the state; 
(3) self-employed individuals in the state of New Mexico; and 
(4) Indian tribes that elect to be covered, or to terminate coverage, in the program for their employees. 
B. The department shall administer the Program and the Supplemental Program to provide leave compensation and supplemental leave compensation to employees and self-employed individuals. Beginning January 1, 2028, eligible employees and self-employed individuals shall be annually entitled to up to: 
(1) six weeks of leave compensation; and 
(2) three weeks of supplemental leave compensation paid from the Fund if the employee opts into the Supplemental Program. 
C. An employee or self-employed individual shall automatically be enrolled in the Supplemental Program by contributing to the Fund pursuant to Subsections D and E of this section. 
D. Beginning January 1, 2027 and for each calendar quarter thereafter until January 1, 2030, there is assessed against each employee that wishes to opt in to the supplemental Program one-half percent of the employee's wages up to the earnings cap established by the federal social security administration program, pursuant to the Federal Insurance Contributions Act. An employee shall not be required to make any contributions to the Fund from leave compensation. 
E. Beginning January 1, 2027 and for each calendar quarter thereafter until January 1, 2030, there is assessed against each self-employed individual as described in Paragraph (3) of Subsection A of this section that wishes to opt in to the Supplemental Program one-half percent of the individual's net income as designated by the self-employed individual. 
F. The contributions of employees shall be remitted by the employer following the end of each quarter for which the contributions are deducted and on a date determined by the secretary. 
G. The contributions of self-employed individuals shall be remitted by the individual following each end of the quarter for which the contributions are deducted and on a date determined by the secretary. A self-employed individual shall not be required to make contributions to the fund from leave compensation. 
H. Nothing in this section shall be construed to prohibit an employer from providing additional leave compensation or extended length of leave to employees receiving compensation from the department. 
SECTION 6 defines Eligibility, leave compensation calculation and documentation required.
 A. Beginning January 1, 2028, the department shall provide leave compensation to an eligible applicant who takes leave after the applicant, in accordance with the provisions of the Act, has filed a claim for leave approved by the department. 
B. Beginning January 1, 2028, the department shall provide supplemental leave compensation to an eligible applicant who takes leave after the applicant, in accordance with the provisions of the Act has: 
(1) filed a claim for leave approved by the department; 
(2) received six weeks of leave compensation; and 
(3) contributed to the Fund for at least six months during the twelve-month period prior to submitting an application. 
C. An applicant shall be eligible for a maximum of three weeks of supplemental parental leave. 
D. An applicant shall be ineligible to receive leave compensation or supplemental leave compensation if the applicant meets any of the criteria in this subsection.
E. The department shall issue leave compensation and supplemental leave compensation to an eligible applicant whose claim has been approved as described in this subsection.
F. The department shall issue leave compensation or supplemental leave compensation to self-employed individuals as described in this subsection.
G. When an applicant or an authorized representative submits a claim for leave with the department, the department shall verify the information specified in this subsection. 
H. The department shall notify the employer and applicant in writing within 20 business days of application if approved or denied or if further information is required. 
Every individual filing a new claim for leave shall be advised that: 
(1) leave compensation and supplemental leave compensation may be subject to federal and state income taxes; 
(2) requirements exist pertaining to estimated tax payments; 
(3) the individual may elect to have federal income tax deducted and withheld from the individual's leave compensation or supplemental leave compensation payments at the amount specified in the federal Internal Revenue Code of 1986; and 
(4) the individual is permitted to change a previously elected withholding status one time during each calendar year.
J. Amounts deducted and withheld from leave compensation and supplemental leave compensation shall remain in the Fund until transferred to the federal internal revenue service. 
K. The department shall follow all state and federal laws, rules and procedures pertaining to the deducting and withholding of income tax. 
SECTION 7 requires claims for leave.
A. The department shall require an applicant who seeks leave compensation or supplemental leave compensation to provide evidence of the birth or adoption of a child or placement of a foster child with the applicant. 
B. Information contained in an applicant's files and records pertaining to the Act are confidential and not open to public inspection, other than to department employees or the employees of an approved privately operated paid leave program or plan in the performance of their official duties. However, the applicant or an authorized representative may review the records or receive specific information from the records upon the presentation of the applicant's signed authorization. 
C. Employee information acquired by a private employer pursuant to the Act shall be kept confidential by the employer; provided that confidential records may be used by department employees or the employees of an approved privately operated paid leave program or plan in the performance of their duties. 
SECTION 8 specifies employee notice to employer. 
A. Beginning January 1, 2028, an employer shall allow an employee to take up to a combined total of nine weeks of parental leave and supplemental parental leave during any application year. 
B. An employee shall meet the requirements in this subsection for notifying the employer.
C. The employer has the right to appeal a determination to the department within 15 calendar days after receipt of documentation of the approved claim for leave. 
D. Leave taken pursuant to the Act shall not result in a reduction of the total amount of leave to which an employee is otherwise entitled pursuant to contract, policy, collective bargaining agreement or other law or rule in excess of the amount of leave actually taken pursuant to the Act; provided that an employer subject to the federal Family and Medical Leave Act of 1993 may require an employee who takes leave and receives leave compensation or supplemental leave compensation pursuant to the Act that also qualifies for leave pursuant to the federal Parental Leave Act of 1993 to take leave concurrently. An employer shall not require an employee to exhaust any other leave entitlement prior to granting leave pursuant to the Act. 
E. An employer shall post and keep posted in a conspicuous place upon its premises a notice that informs employees of the right to take leave, the ability to opt in to the supplemental paid parental leave program and the major provisions of the Act. 
SECTION 9 addresses return to employment.
A. A self-employed individual shall notify the department within ten business days of the self-employed individual's return to work. 
B. Upon an employee's return after leave, an employer shall notify the department within ten business days that the employee has returned to work. 
C. An employer that has employed an employee for 180 days or more prior to the commencement of an employee's leave shall: (1) restore the employee to the position held by the employee when the leave was commenced; or (2) place the employee in a position for which employee benefits, wages and other terms and conditions of employment are equivalent to or greater than those provided in the position from which the employee took leave. 
D. Nothing in this section shall be construed to entitle a restored employee to: (1) the accrual of seniority or employment benefits during the period the employee is using leave; or (2) the right to any benefit or position of employment other than the right the employee would have been entitled to had the employee not taken the leave. 
E. Any yearly certification or training that an employer requires as a condition of employment may remain in place and applicable to any employee taking leave; provided that nothing in this subsection shall supersede another provision of law or a collective bargaining agreement that governs an employee's return to work after leave. 
F. Nothing in this section shall prohibit an employer from requiring an employee who uses leave to report periodically to the employer on the status and intention of the employee to return to work. 
G. An employer shall pay its share of health insurance premiums and maintain an employee's health coverage while the employee is on leave pursuant to the Act under terms that the employee would have received if the employee had not taken leave. The employee on leave shall pay the same share of premium payments as the employee would have paid if the employee were not on leave. 
SECTION 10 prohibits interference and retaliation.
A. It is unlawful for an employer or any other person to interfere with, restrain or deny the exercise of, or the attempt to exercise, any right protected pursuant to the Act. 
B. An employer shall timely provide to the employee documents required to apply for leave. 
C. An employer, employee organization or other person shall not take retaliatory personnel action or otherwise discriminate against a person because the person exercised rights protected pursuant to the Act as specified in this subsection.
D. It is unlawful for an employer's absence policy to count leave taken pursuant to the Act as an absence that may lead to or result in discipline, discharge, demotion, suspension or any other adverse action. 
E. The protections provided in this section shall apply to any person who reasonably but mistakenly alleges violations of the Act. 
F. An employer that is found by a hearing officer or court of competent jurisdiction to have discharged a worker in violation of this section shall rehire that employee; provided that the worker agrees to be rehired.
SECTION 11 addresses adverse determinations and appeal procedures.
A. An applicant or an authorized representative named in an application for leave may appeal an adverse determination of that application to the department as specified in this subsection.
B. An aggrieved party, including an employee or former employee, or the department on its own motion may bring an administrative action for an alleged violation of the Act under a public or privately run leave program as specified in this subsection. 
C. A party may appeal a final decision made by the department pursuant to the provisions of this section to the district court pursuant to Section 39-3-1.1 NMSA 1978. 
D. The department may appear in its own name in district court in actions for injunctive relief to prevent any person or entity from violating the provisions of the Act. 
SECTION 12.provides for preemption.
A. A city, county, home rule municipality or other political subdivision of the state shall not adopt or continue in effect any ordinance, rule, regulation, resolution or statute that establishes a program of rights and benefits as set out in the Act, excluding a paid sick leave or paid time off ordinance, policy or resolution. 
B. Subject to the requirements of the Act, the provisions of Subsection A of this section shall not prevent a city, county, home rule municipality or other political subdivision of the state from establishing any leave policies for its employees. 
SECTION 13 specifies collective bargaining agreements unaffected. Nothing in the Act shall be construed to diminish the rights, privileges or remedies of any employee under any collective bargaining agreement. 
SECTION 14 authorizes the department to make rules and orders cooperation.
A. By July 1, 2026, the department shall adopt initial rules to implement the Act. 
B. State agencies and departments shall cooperate with the secretary to timely and efficiently provide the information and services necessary to carry out the provisions of the Act. 

SECTION 15 adds a temporary provision to create the Paid Parental Leave Implementation Advisory Committee (Committee). 
A. The Committee is created in the Workforce Solutions Department. The Committee consists of eight members appointed by the secretary of workforce solutions as specified in this section. 
B. The Committee shall provide input regarding best practices for the development and implementation to carry out the provisions of the Act. 
C. The secretary of workforce solutions shall consult with the Committee at least quarterly as rules are developed to implement a program pursuant to the Act. 
D. Members of the Committee are not entitled to per diem and mileage expenses. The workforce solutions department shall provide staff for the Committee. 
E. The Committee shall function from the date of its appointment, which shall be no later than October 1, 2025, until January 1, 2027. 

Current Law:

 House Bill 446 Section 9-29A-1 NMSA 1978 (being Laws 2020, Chapter 3, Section 1, as amended) in the Early Childhood Education and Care Fund does not make payments for parental leave.