SB 3/a PAID FAMILY MEDICAL LEAVE ACT

Sen Mimi Stewart

Actions: [1] SCC/STBTC/SFC-SCC [2]germane-STBTC [4] DP-SFC [6] DP/a [7] fl/aa- PASSED/S (25-15) [13] HHHC-HHHC [14] DP [15] FAILED/H (34-36).

Scheduled: Not Scheduled

 Senate Bill 3 (SB 3) enacts the Paid Family and Medical Leave Act and creates the Paid Family and Medical Leave Fund. SB 3 provides for the Paid Family and Medical Leave Program to pay eligible employees a percentage of their wages to bond with a new child or care for a family member for a limited time. SB 3 makes exceptions for certain employees. SB 3 provides for the Workforce Solutions Department to administer the program. Similar programs are preempted. SB 226552 creates a temporary advisory committee.
 

 Senate Bill 3 (SB 3) enacts the Paid Family and Medical Leave Act and Fund as follows: 

SECTION 1 creates the Paid Family and Medical Leave Act (Act).

SECTION 2 provides definitions as used in the Act.

SECTION 3 creates the Paid Family Medical Leave Fund (Fund).
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 who paid into the fund and shall consist of all revenue. Money in the fund shall be invested, managed and appropriated by the usual directions.

B. Money in the fund is appropriated to the department to distribute leave compensation pursuant to the Act and to cover the costs of administration and outreach for the paid family and medical leave program. 

C. Money shall be disbursed by the usual channels as directed in this subsection. Any unexpended or unencumbered balance remaining at the end of a fiscal year shall not revert or be transferred to any other fund.

D. To determine an actuarially sound premium rate and a future premium rate-setting mechanism for the program created by the Act, the department shall contract with a qualified independent actuarial consultant to analyze the data as specified in this subsection.

E. Beginning January 1, 2028, and not later than October 1 of each calendar year, the secretary shall ensure and maintain the self-sufficiency and solvency of the Fund as directed in this subsection.

SECTION 4 provides directions for the Act, including applicability and contributions and their remittance to the Fund. Exemptions and requirements of privately run programs are specified.

A. The Act applies to: 
(1) all public and private employees who are subject to state jurisdiction, 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 subject to state jurisdiction who opt into the program; and 
(4) Indian nations, tribes and pueblos that elect to be covered, or to terminate coverage, in the program for their employees. 

NOTE; CHECK EACH OF THESE SUBSECTION GROUPS TO DETERMINE SCHEDULE BY CALENDAR QUARTER OR YEAR.

In Subsections C and D the Act provides the same assessment schedule for each affected group beginning January 1 2026, and for each calendar quarter thereafter until January 1, 2029, and applies an earning cap as established by the Social Security Administration, as follows:
- there is assessed against each employee one-half percent of the employee's wages. An employee shall not be required to make any contributions to the fund from leave compensation. 
- there is assessed against each employer with five or more employees an amount equal to four-tenths percent of each participating employee's wages.
- there is assessed against each self-employed individual as described in Paragraph (3) of Subsection A of this section one-half percent of the individual's net income as designated by the self-employed individual. 

In Subsections C and D, beginning January 1, 2029, and for each calendar quarter thereafter, the Act provides an assessment schedule for specified affected groups and continues to apply an earning cap as set by the secretary pursuant to Subsection E of Section 3 of the Act. 
there is assessed against each employee an assessment on the employee's wages at 55 percent of the premium set. 
there is assessed against each self-employed individual as described in Paragraph (3) of Subsection A of this section an assessment on the individual's net income as designated by the self-employed individual at 55 percent of the premium set.

Beginning January 1, 2029 and for each calendar year thereafter, there is assessed against each employer with five or more employees an amount equal to each participating employee's wages at forty-five percent of the premium set. An employer shall not recover, or seek to recover, any amounts assessed against employers pursuant to this subsection from the employer's employees. 

E. Remittance: The contributions of employees and employers 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. 

F.  Remittance: 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. 

G. Employer Waiver to Exempt: An employer that has adopted and operates a paid family and medical leave plan or program for the benefit of its employees that provides leave and leave compensation substantially similar to or greater than the leave and leave compensation offered pursuant to the Act may apply for a waiver to exempt the employer and its employees from participating in the program. An employer granted a waiver pursuant to this subsection and the employer's employees shall not be required to remit premium contributions to the Fund. The employer shall apply and provide supporting documentation to the department for exemption each calendar year. 

H. An employer granted a waiver pursuant to Subsection G of this section and the employer's employees shall have the same rights and protections enjoyed by employers and employees covered pursuant to the Act.
I. Subsection G of this section shall notify all employees covered by the employer's paid leave program of their coverage for leave and compensation and their rights to leave and appeal to the department if the Act is violated.

J. A paid family and medical leave plan that is privately operated, as described in Subsection G of this section, shall not: (1) require an employee to pay more for private coverage than the employee would pay through contribution to the Fund; or (2) impose additional restrictions or conditions on leave or leave compensation beyond those explicitly authorized by state law. 

K. The department shall withdraw approval of a waiver for a privately operated paid leave plan or program that violates the provisions of Subsections G through J of this section. An employer whose waiver has been withdrawn may reapply for a waiver in five years.

L. Nothing in this section shall be construed to prohibit an employer without a waiver from providing supplemental leave compensation or extended length of leave to employees receiving compensation from the department. 

SECTION 5 provides requirements for an employee to take leave in accordance with the Act.
 A. Beginning January 1, 2027, the department shall provide leave compensation to an eligible employee who takes leave after the employee, in accordance with the provisions of the Act and department rules, has: 
(1) filed a claim for leave compensation approved by the department; and (2) contributed to the fund as specified and provided that at any time during the 12-month period in which the individual was previously covered by a privately operated paid leave plan or program pursuant to Subsection G of Section 4 of the Act shall count toward this requirement.

B. Beginning January 1, 2027, the department shall provide leave compensation to an eligible self-employed individual as specified in Subsection A. 

C. An employee or self-employed individual is eligible for a maximum of 12 weeks of leave compensation during any application year. An employee or self-employed individual is not required to use any leave consecutively. 

D. An employee or self-employed individual may receive leave compensation for intermittent leave in increments of no fewer than eight hours. 

E. An employee or self-employed individual shall be ineligible to receive leave compensation if any of the criteria in this subsection are met.

F-G. The department shall issue leave compensation from the Fund to an eligible employee  or self-employed individual whose claim has been approved based on the calculations in these  subsections.

H. When an employee, a self-employed individual or an authorized representative submits a claim for leave compensation with the department, the department shall require the information as specified in this subsection.

The department shall notify the employer and employee or self-employed individual in writing within 20 business days of application if: 
APPROVED: (1) shall notify the employee or self-employed individual of the amount of leave compensation that the employee or self-employed individual is eligible to receive biweekly; provided that an eligible employee or self-employed individual shall begin receiving leave compensation within ten business days of the date of submission of a properly completed application or ten business days after approved leave begins; 
DENIED: (2) shall notify the employee or self-employed individual of the grounds for denying the application for eligibility and of the right to appeal; and 
FURTHER INFORMATION REQUIRED: (3) to determine the employee's or self-employed individual's eligibility for paid leave or the amount of leave compensation; provided that when the department receives sufficient information or supporting documentation to make an eligibility determination, the department shall adhere to the notification provision of this subsection. 

J. Every individual filing a new claim for leave compensation shall, at the time of filing, be advised about federal and state income tax requirements as specified in this subsection.

K. Amounts deducted and withheld from leave compensation shall remain in the Fund until transferred to the Internal Revenue Service. 

L. The department shall follow all state and federal laws, rules and procedures pertaining to the deducting and withholding of income tax. 

SECTION 6 requires documentation and confidentiality for claims for leave. 
The department shall require an employee or self-employed individual who seeks family leave compensation to provide evidence of the birth or adoption of a child or placement of a foster child with the employee or verification by a health care provider that a family member has a serious health condition as specified in this subsection. 

B. The department shall require an employee or self-employed individual who seeks medical leave compensation to provide verification by a health care provider that the person has a serious health condition that supports the claim for leave compensation. 

C. The department shall require an employee or self-employed individual who seeks safe leave compensation to provide a police report, court-issued document or signed statement from a source specified in this subsection that supports the claim for leave compensation. 

D. The department shall require an employee or self-employed individual who seeks qualifying exigency leave compensation to provide a copy of the military member's active duty orders or other documentation issued by the military that indicates that the military member is on covered active duty, and the dates of the military member's covered active duty service. 

E. Information contained in an employee's or self-employed individual's files and records pertaining to the Act are confidential and not open to public inspection. However, the employee, the self-employed individual or an authorized representative of either may review the records or receive specific information from the records upon the presentation of the person’s signed authorization. 

F. Employee information acquired by a private employer pursuant to the Act shall be kept confidential by the employer. 

SECTION 7 directs that an employee provide notice of leave to an employer and specifies that reduction of other leave is prohibited.
B. An employee shall: (1) make a reasonable effort to schedule leave so as not to unduly disrupt the operations of the employer; (2) provide the employer with prior notice of the schedule on which the employee will be taking leave; and (3) provide the employer with documentation of the approved leave compensation request. 

C. The employer has the right to appeal a determination to the department within 15 calendar days after receipt of documentation of the approved leave compensation request. 

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 the Act.
An employer subject to the federal Act may require an employee who takes leave and receives leave compensation pursuant to the Act and to the federal act to take leave concurrently. An employer shall not require an employee to exhaust any other leave entitlement prior to granting leave. 

E. Nothing in this section shall be construed to entitle an employee to more leave than required pursuant to the Act. 

F. An employer shall post in a conspicuous place upon its premises a notice that informs employees of the right to take leave and summarizes the major provisions of the Act. 

SECTION 8 sets the requirements for 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 or upon the completion of an intermittent leave claim, 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 90 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 or 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. 

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 9 specifies that interference and retaliation against an employee is prohibited. 
A. It is unlawful for an employer or any other person to interfere with, restrain or deny the exercise of 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 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 10 provides appeal procedures and departmental disciplinary powers. 
A. An employee, a self-employed individual 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 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. 

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 11 provides that 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. 
However, 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 12 provides that nothing in the Act shall be construed to diminish the rights, privileges or remedies of any employee under any collective bargaining agreement. 

SECTION 13 requires agencies and departments to cooperate. 
A.By July 1, 2025, the department shall adopt initial rules to implement provisions in Sections 3, 4 and 5 of the Act.

B. State agencies and departments shall cooperate with the secretary to provide the information and services necessary to carry out the provisions of the Act. 

SECTION 14 creates a Paid Family and Medical Leave Implementation Advisory Committee (Committee) as a temporary provision.
 A. The Committee is created in the Workforce Solutions Department. The Committee consists of members as specified in this subsection.

B. The Committee shall provide input regarding best practices for the development, implementation and promulgation of rules and educational materials to carry out 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, 2024, until January 1, 2026.

SECTION 15 provides for repayment of an appropriation to the Fund as a temporary provision.
Beginning January 1, 2028, $6,000,000 shall be transferred from the Fund at the end of each fiscal year to the General Fund until the total transfers pursuant to this section equal the total amount of an appropriation made to the Workforce Solutions Department for costs associated with the implementation of the Act contingent on the passage of legislation in the second session of the fifty-sixth legislature appropriating funds for the purposes of the Act.
 

 Amended February 3, 2024 as SFCa/SB 3:
The Senate Finance Committee amendment to Senate Bill 21 makes nine changes to the original Paid Family and Medical Leave Act, as follows:

In Section 2, between lines 5 and 6, Subsection B, a definition for “client”, is inserted. Between lines 20 and 21, Subsections F and G are inserted to add definitions for “employee leasing arrangement” and “employee leasing contractor”. The section is relettered to correspond with the amendments.

In Section 2, Subsection G(5) the definition of “family member” is amended to strike “related by blood or affinity”.  

In Section 4, Subsection A(1) and A(3) are amended to strike "subject to state jurisdiction" and insert  "in the state of New Mexico". 

Section 4, Subsection E is amended to expand the definition to add:
"When an employee leasing arrangement is in place, contributions shall be remitted by the employee leasing contractor on behalf of the client."

Section 5, Subsection E(4) and E(5) are each amended to reflect that leave compensation applies to either an employee or a self-employed individual. 

 Senate Bill 3 duplicates House Bill 6 to create the Paid Family and Medical Leave Act.