HB 11 PAID FAMILY & MEDICAL LEAVE INSURANCE ACT

Rep Marian Matthews

Actions: [2] HHHC/HCEDC-HHHC

Scheduled: Not Scheduled

 House Bill 11 (HB 11) enacts the Paid Family and Medical Leave Insurance Act and creates an authority and board. HB 11 creates the Paid Family and Medical Leave Insurance Fund and provides for administration. HB 11 excepts certain employees. HB 11 provides for rule making and an appeals process. HB 11 preempts similar programs. HB 11 prescribes penalties.
 

 House Bill 11 (HB 11) creates and provides support for the Paid Family and Medical Leave Insurance Act (Act) as follows:

SECTION 1 enacts the Act.

SECTION 2 provides definitions as used in the Act.

SECTION 3 creates the Paid Family and Medical Leave Insurance Authority (Authority) and Paid Family and Medical Leave Insurance Board (Board).
A. Creates the Authority and attaches it administratively to the Workforce Solutions Department.

B.  Creates the Board to oversee the Authority and specifies the composition of the 11 member board.

C-G. Specifies terms, appointments and details of the management of the Board.

SECTION 4 provides for Authority staff as follows:
A. Creates the position of director for the Authority. The director shall be hired by the board and shall serve at the pleasure of the board. The director's salary shall be set by the board. 

B. The director may employ additional staff, agents or contractors as necessary for carrying out the Authority's duties. 

SECTION 5 creates the Paid Family and Medical Leave Insurance Program (Program) as follows:
A. The Authority shall establish and administer a Program to provide up to six weeks of family and medical leave compensation to covered employees during any 12-month period. 

B. Beginning January 1, 2026, each covered employee and self-employed individual who has enrolled in the Program shall contribute a percentage of the employee's or self-employed individual's subject earnings to the Fund. The contribution rate shall be set by the Authority and shall not exceed one-half percent of subject earnings. 

C. By January 1, 2027, and annually, the Authority shall conduct an actuarial study to evaluate the sustainability of the fund with the information specified in this subsection. 

D. On January 1, 2028, and annually, the Authority may adjust the contribution rate according to the recommended contribution rate identified in the actuarial study as specified in this subsection.

E. The contributions of employees shall be remitted by the employer following the end of each quarter for which the contributions are deducted on a date determined by the Authority. 

F. To implement and administer the Program, the Authority shall take actions as specified in this subsection to:
 establish a process for contributions to the fund, 
maintain a website, 
develop a process for determining eligibility and employer waivers, and 
make contracts necessary to the performance of its duties, and adopt rules necessary to implement the Act.

G. The Authority may contract for an administrator, actuarial studies and public outreach.

H. State agencies and departments shall cooperate with the authority to timely and efficiently provide the information and services necessary to carry out the provisions of the Act. 

SECTION 6 creates the Paid Family and Medical Leave Insurance Fund as follows:
A. The Fund is created in the state treasury and shall be administered by the Authority. The Fund shall be held for the benefit of the employees who paid into the Fund and shall consist of all revenue collected and attributable 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 Authority for the purposes specified in this subsection.

C. Money shall be disbursed from the Fund as described in this subsection.Any unexpended or unencumbered balance remaining at the end of a fiscal year shall not revert to the General Fund. 

SECTION 7 specifies family and medical leave compensation, eligibility and documentation required.
Beginning January 1, 2027, covered employees shall be entitled to a total of six weeks of compensation during any calendar year for any of the following reasons: 
the birth of the covered employee's child; 
the placement of a child with the covered employee for adoption or foster care; 
to care for a family member of the covered employee; or 
to recover from the covered employee's serious health condition. 

B. Leave taken by a covered employee due to the birth, adoption or fostering of a child may be taken before the impending birth or placement to prepare. 

C. Leave taken by a covered employee due to the birth, adoption or fostering of a child shall not be taken intermittently unless the covered employee and the employer agree otherwise. Leave taken by any covered employee for any other reason outlined in Subsection A of this section may be taken intermittently if both the covered employee and employer agree. A covered employee may receive leave compensation in increments of no fewer than eight hours.

 D. If a covered employee requests intermittent leave, the covered employee's employer may require the covered employee to transfer temporarily to an available alternative position that the covered employee is qualified for if the position meets the specifications in this subsection.

E. A covered 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 covered employee's intent to take leave at least 30 calendar days before taking leave, except when the circumstances require the covered employee to begin leave in less than 30 days, in which case the covered employee shall provide notice as soon as practicable; and 
(3) provide the employer with prior notice of the schedule on which the covered employee will take leave. 

F. Leave taken pursuant to the Act shall not result in a reduction of the total amount of leave to which a covered employee is otherwise entitled; provided that an employer subject to the federal Family and Medical Leave Act of 1993 may require a covered employee who takes family and medical leave and receives compensation under the Act that also qualifies as leave under the federal Family and Medical Leave Act of 1993 to take leave concurrently. 

G. A covered employee shall be ineligible to receive leave compensation if situations occur as specified in this subsection, such as:
filing fraudulent claims, 
receiving unemployment insurance, 
failing to use the leave as intended, or
leave is covered by the Workers’ Compensation Act.

 H. To be eligible for leave compensation, a covered employee shall meet the requirements specified in this subsection.

I. The weekly compensation offered to covered employees shall calculated as specified in this subsection.

J-L. The Authority shall withhold applicable federal and state income taxes from a covered employee's leave compensation, maintain the deductions in the Fund, and follow procedures specified by the United States department of labor and the federal internal revenue service pertaining to the deducting and withholding of income tax. 

SECTION allows enrollment in the Program by self-employed individuals as follows:
A. A self-employed individual may submit an application to the Authority to enroll in the Program. A self-employed individual enrolled in the Program shall be required to remain in the 
program for at least three years and shall be automatically re-enrolled each year unless the self-employed individual opts out. 

B. A self-employed individual may withdraw from the Program upon submitting written notice to the Authority at least 30 days prior to the expiration of the initial three-year enrollment period or a subsequent enrollment period. 

SECTION 9 provides specifics for family and medical leave certification.
A. The authority shall require a covered employee who seeks leave compensation to provide evidence of the birth, adoption, or foster placement of a child with the covered employee or verification by a health care provider that a family member has a serious health condition that supports the covered employee's claim for compensation. 

B. The authority shall require a covered employee who seeks leave compensation to provide verification by a health care provider that the covered employee has a serious health condition that supports the covered employee's claim for compensation. 

C. Information contained in a covered employee's files and records pertaining to the Act are confidential and not open to public inspection, other than to Authority employees and agents in the performance of their official duties and reporting requirements. However, the covered employee or the covered employee's authorized representative may review the records or receive specific information from the records upon the presentation of the covered employee's signed authorization. 

D. Employee information gathered by an employer pursuant to the Act shall be kept confidential. 

SECTION 10 allows an employer waiver in some instances as specified in this section. 
A. An employer that has adopted and operates a private paid family and medical leave program or plan for the benefit of its employees that provides leave and compensation that is of equal or greater duration and value than the family and medical leave compensation offered under the Act may apply for a waiver to exempt the employer and its employees from participating in the Program. The employer shall apply and provide supporting documentation to the Authority for exemption each calendar year. The documentation shall include evidence as specified.

B. An employer granted a waiver shall notify all employees covered by the employer's paid leave program at the start of the employee's employment and annually thereafter with the information specified in this subsection.

C. Employees who work for an employer that has received a waiver from the Authority shall not contribute a percentage of their earnings to the Fund.

D. A denial of leave compensation by a private plan or program shall be subject to the denial of compensation appeal procedure outlined in Section 14 of the Act.

E. Nothing in this section shall be construed to limit an employer from providing a private paid family and medical leave program or plan that provides greater benefits than required by the Act. 

SECTION 11 specifies family and paid medical leave fraud and disqualification from the Program, including repayment of leave compensation and penalties.
Family and medical leave compensation fraud is specified in this subsection.

B. Except as otherwise provided for in this section regarding the repayment of family and medical leave compensation, a person who commits fraud shall face penalties as described in this subsection. 

C. A person participating in the Program who willfully makes a false statement or misrepresentation to obtain leave compensation shall be disqualified from receiving any compensation under the program for three years after making the false statement or misrepresentation. 

D. If leave compensation is paid to a covered employee erroneously or as a result of willful misrepresentation by the covered employee, or if a claim for family and medical leave compensation is rejected after compensation is paid, the Authority may seek repayment  of leave compensation from the covered employee. When payment is made due to willful misrepresentation, the Authority may seek payment of a penalty not to exceed 50 percent of the leave compensation. 

E. If leave compensation is paid as a result of willful misrepresentation by a health care provider, the Authority may seek payment of a penalty from the health care provider not to exceed 300 percent of the leave compensation paid as a result of the misrepresentation. 

F. A person, including an employer, who intentionally aids, abets, assists, promotes or facilitates the making of a misrepresented claim for compensation shall be liable for the same financial penalty as the person who made the claim. 

SECTION 12 provides employee employment and benefits protection.
A. A covered employee who has been employed by the employee's current employer for at least 120 days and takes family and medical leave pursuant to the Act shall be entitled on return from the leave is restored to employment as specified in this subsection.

B. Nothing in this section shall be construed to entitle a restored covered employee to the accrual of seniority or employment benefits during leave or any right, benefit or position other than right to which the employee would have been entitled if leave had not been taken. 

C. An employer  and the covered employee shall each shall pay their share of the covered group life insurance, health insurance and disability insurance premiums while the employee is on leave pursuant to the Act under terms that the covered employee would have received if the covered employee had not taken leave; provided that nothing in this section shall prohibit an employer disputing an employee's eligibility to receive family and medical leave or compensation. 

D. Nothing in this section shall be construed to prohibit an employer from requiring a covered employee on family and medical leave to report periodically to the employer on the status and intention of the covered employee to return to work. 

SECTION 13 prohibits interference and retaliation as follows:
A. It is unlawful for an employer or any other person to interfere with, restrain or deny the exercise of any right protected under the Act. 

B. An employer, employee organization or other person shall not take retaliatory action or otherwise discriminate against a covered employee because the covered employee exercised rights protected Act as specified in this subsection.

C. It is unlawful for an employer's absence policy to count family and medical leave taken under the Act as an absence that may lead to or result in discipline, discharge, demotion, suspension or any other adverse action. 

D. The protections provided in this section shall apply to any person who reasonably but mistakenly alleges violations of the Act. 

E. An employer found by a hearing officer or court to have discharged a covered employee in violation of this section shall rehire that employee; provided that the covered employee agrees to be rehired. 

F. Nothing in this section shall limit an employer from making a report to the Authority, a law enforcement officer or a law enforcement agency relating to family and medical leave compensation fraud allegedly committed by an employee. 

SECTION 14 provides appeal for adverse determinations and provides administrative actions and Authority disciplinary powers.
A. A covered employee or the covered employee's authorized representative named in an application for leave may appeal an adverse determination of that application to the Authority as specified in this subsection.
B. An aggrieved party, including a covered employee or former employee, or the Authority 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 follows as specified in this subsection.

C. A party may appeal a final decision made by the Authority pursuant to the provisions of this section to the district court pursuant to Section 39-3-1.1 NMSA 1978. 

D. The Authority 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 or rules of the Authority. 

SECTION 15 requires employers shall provide written notice at the time of hiring a new covered employee and annually thereafter to each of the employer's employees that provides information on the Act as specified, including employee’s rights and obligations; process for filing a claim; protections that employees have; the right to file an appeal to the Authority.

SECTION 16 specifies Authority reporting requirements. 
No later than July 1, 2025 and annually thereafter, the Authority shall submit a report to the legislature that includes information as specified in this subsection. The Authority shall make the report available to the public on the Authority's website. 

SECTION 17 requires the Authority shall conduct a public education campaign to provide information on the Program and specifies the information to be included in the education campaign. The Authority may use money from the Fund for the campaign. 

SECTION 18 provides:
A. No city, county, home rule municipality or other political subdivision of the state shall 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 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 19 protects collective bargaining agreements.
Nothing in the  Act shall be construed to diminish the rights, privileges or remedies of any employee under any collective bargaining agreement. 

 Relates to SB 3 and HB 6 Paid Family and Medical Leave Act.