Amid Severe Workforce Shortage, Paid Family and Medical Leave Program Would Raise Taxes and Further Constrict Workforce Retention

Based on a fiscal note from the Joint Fiscal Office, the Paid Family and Medical Leave (PFML) program would be funded by a 0.55% payroll tax. The initial startup cost for the program would require $40.2 million of one-time funding. The annual price tag to administer the program would be $13 million and it would require 45-50 new employees to manage. Along with the extreme cost, it is no secret Vermont is facing a severe workforce shortage and given the state’s difficult history of standing up insurance programs, just the logistics of creating the program would be an uphill battle. The PFML program would provide 12 weeks of leave at 90% wage replacement and no waiting period, going beyond what was passed by the legislature in 2019. The Vermont Chamber continues to testify on the current economic realities facing Vermont business owners, and the potential unintended consequences of a payroll tax on top of the considerable cost involved in the loss of an employee for 12 weeks.