WASHINGTON, D.C. – U.S. Senators Angus King (I-Maine) and Deb Fischer (R-Neb.) have introduced legislation that makes it easier for businesses to offer paid family and medical leave (PFML) plans to employees. The Paid Family and Medical Leave Tax Credit Extension and Enhancement Act would provide certainty to businesses by making the paid family leave tax credit permanent and would provide additional options for financing paid leave such as through PFML insurance. Importantly, the bill also includes a King-led provision that allows eligible employers to receive the credit for leave offered in excess of any state or local mandates, offering a significant incentive for employers who wish to offer more leave than the Maine requirement.

Senators King and Fischer led the original effort to establish the country’s first ever nationwide PFML policy that created a two-year general business tax credit for employers that voluntarily offered up to 12 weeks of PFML to employees below a certain income level. The current credit, included in the 2017 Tax Cuts and Jobs Act and implemented in 2018, sunsets in 2025.

“I have often said that Maine is one big town—big community—with long roads. And when a member of our community is hurting, we drop everything to take care of our own. However, no one should have to choose between caring for our families or receiving the next paycheck to put food on the table,” said Senator King. “That’s why I’ve been working with my Republican colleague, Deb Fischer of Nebraska, to introduce the Paid Family and Medical Leave Tax Credit Extension and Enhancement Act which makes the PFML tax credit permanent.  By making this extension permanent on a bipartisan basis, we’re prioritizing people over politics –and supporting those who care for one another in times of need.”

“Americans shouldn’t have to choose between making ends meet and taking care of family—that’s why Senator King and I passed the first ever nationwide paid family leave law. Now, we need to make that legislation permanent and expand access to paid family leave. Our new bill will encourage more businesses to offer paid family leave to more working Americans,” said Senator Fischer.

The legislation builds on the existing credit by making the following changes:

• Provides certainty to businesses by making the credit permanent.

• Allows eligible employers to receive the credit for leave provided in states without PFML mandates or for leave offered in excess of any state or local mandate.

• Currently, employers providing PFML under state or local government mandates are ineligible for the credit — meaning that some employers with operations in both non-mandate and mandate states are ineligible for the credit.

• Allows employers to claim the credit for a portion of Paid Family Leave (PFL) insurance premiums paid for qualifying employees. The structure mirrors the current credit – enabling employers to receive up to a 25% credit towards yearly premiums, depending on the percentage of wages the insurance plan replaces.

• Provides employers the option to offer PFML to employees at 6 months and better target the credit towards younger workers.

• Requires the Small Business Administration and Internal Revenue Service to conduct targeted outreach, education, and technical assistance to assist in increasing awareness of the credit.

The legislation is supported by Hospitality Maine, the American Council of Life Insurers (ACLI), American Institute of Certified Public Accountants (AICPA), Bipartisan Policy Center (BPC), National Federation of Independent Businesses (NFIB), National Restaurant Association, One Country Project (OCP).

Click here to read a summary of the legislation.

Click here to read the text of the legislation.

###