President Trump’s proposed FY 2021 budget includes a national parental leave program paid for by the federal-state unemployment insurance (UI) program. The proposal would impact nearly every employer in Michigan.
The budget description of the proposal indicates: “The Budget includes a proposal to establish a Federal-state paid parental leave benefit program within the UI program that would begin in 2023. The program will provide six weeks of benefits for mothers, fathers, and adoptive parents. The benefit is provided to help families recover from childbirth and to bond with their new children.”
The cost of the proposed program is projected to be $20.8 billion over the 10-year budget period (Fiscal Years 2021-30) and would be “offset” by $7.3 billion in savings associated with state revenues.
Although it’s unclear at this point where the funding for this program would come from, other than “within the UI program,” prior proposals from this administration have proposed that funding come from states’ UI Trust Funds. The Michigan Chamber and other business groups have traditionally opposed using state UI Trust Fund dollars to pay for parental and/or family leave. This is because the UI Trust Fund is financed 100% by employers and is earmarked for the payment of UI claims. If Trust Fund dollars are diverted for this purpose, states may have to raise UI taxes on employers to properly fund their systems.
The Michigan Chamber will closely monitor this proposal and voice our funding concerns, if appropriate. Please contact Wendy Block with any questions at wblock@michamber.com.