Gluesenkamp Perez, Bipartisan Colleagues Introduce Bill to Help Small Businesses Offer Paid Family and Medical Leave

Jul 02, 2024

Last week, Rep. Marie Gluesenkamp Perez (WA-03), along with  Reps. Randy Feenstra (IA-04), Stephanie Bice (OK-05), and Yadira Caraveo (CO-08), introduced the bipartisan Paid Family and Medical Leave Tax Credit Extension and Enhancement Act to help small businesses offer paid family and medical leave (PFML) to their employees.

This legislation specifically extends and reforms the 45S tax credit – which was a two-year tax credit authorized by the Tax Cuts and Jobs Act of 2017 and later extended by Congress through 2025 – for employers that voluntarily offer up to 12 weeks of PFML.

“Taking care of your health, newborn, or family when they’re most in need shouldn’t come at the cost of paying the bills,” said Rep. Gluesenkamp Perez. “This bipartisan legislation will make the successful paid family and medical leave tax credit permanent and expand access to more Washington-based businesses so more families can feel the benefits.”

More specifically, this legislation improves the 45S tax credit available to small businesses that provide PFML, expanding it to include PFML provided through an insurance company or in a state with a mandate. The bill will also reduce the minimum time a worker must be employed to claim the credit from one year to 6 months to more quickly support young employees who are starting their families and provide resources and outreach to help guide and educate small businesses about the use of the credit.

According to the Bureau of Labor Statistics, more than 41 percent of employees at businesses with more than 500 employees have access to PFML while just 20 percent of workers at businesses with fewer than 99 employees have access to PFML.

“When a family welcomes a newborn into the world or a medical condition leaves someone unable to work, it’s important that employees of businesses both large and small have access to paid family and medical leave. Paid family and medical leave – known as PFML for short – ensures that workers can take needed paid time off to spend with their families when a new baby arrives or, in the event of a medical emergency, allows employees to take the time that they need to heal and recover without missing a paycheck. But, right now, there is still uncertainty for both businesses and their employees because a tax credit – created through the Tax Cuts and Jobs Act – to help employers offer PFML expires next year,” said Rep. Feenstra. “While larger corporations have more resources to offer PFML, we cannot leave our main-street businesses behind. My legislation delivers a real solution by making this credit permanent and more accessible for small businesses so that they can more easily offer up to 12 weeks of PFML for their employees every year. By making this important tax credit permanent for our main-street employers, we can deliver certainty for our small businesses, keep our workers healthy and employed, and strengthen our economy and rural communities.”

“The 45S tax credit has helped many employers expand paid family leave benefits for their workers. However, awareness and uptake of this credit have been lower than we’d like. That’s why I’m pleased to join Congressman Feenstra in introducing this legislation which will improve the credit, make it more flexible, increase employer awareness, and to make the tax credit permanent,” said Rep. Bice. “I will continue to work with my colleagues to find comprehensive solutions to provide more families with more paid leave.”

“Nobody should have to choose between a paycheck and taking care of a loved one,” said Rep. Caraveo, MD. “As a pediatrician and former state legislator who led the effort to establish Colorado’s PFML program, I’ve seen how paid family and medical leave enables parents to raise children and helps families to look after one another without placing stress on the family finances. I’m proud to co-lead this bipartisan legislation, which will provide permanent tax credits incentivizing more businesses to offer these life-changing benefits to their employees.”

“BPC Action applauds Reps. Feenstra, Bice, Gluesenkamp Perez, and Caraveo for introducing the Paid Family and Medical Leave Tax Credit Extension and Enhancement Act. We are pleased to endorse this bill to make permanent and expand the employer tax credit for paid family and medical leave known as 45S,” said Michele Stockwell, President of the Bipartisan Policy Center Action. “This tax credit helps businesses provide paid family and medical leave benefits to hard-working Americans and we encourage Congress to take up this important bill.”

“In a tight labor market like we’re experiencing now, many restaurant operators are looking for benefits like paid family leave to set them apart when recruiting skilled hospitality professionals,” said Sean Kennedy, Executive Vice President of Public Affairs at the National Restaurant Association. “The Paid Family and Medical Leave Tax Credit Extension and Enhancement Act ensures that small business restaurant operators who are considering or are already offering PFML have access to economic supports that make that a little easier.”

“For the over 11 million individuals caring for loved ones living with Alzheimer’s or other dementia in our nation, it is unfortunately all too common to face the dilemma of whether to continue caring for their loved ones or to stay afloat financially,” said Robert Egge, Chief Public Policy Officer of Alzheimer’s Association. The Paid Family and Medical Leave Tax Credit Extension and Enhancement Act will help families impacted by this devastating disease by making permanent and expanding the employer tax credit for paid family and medical leave.”

Full text of the bill is available here.

Sens. Deb Fischer (NE) and Angus King (ME) have introduced companion legislation in the U.S. Senate.

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