04/16/2025 03:15 PM House LABOR & COMMERCE

        HB 193-UNEMPLOYMENT BENEFITS; PAID PARENT LEAVE                                                                     
                                                                                                                                
5:00:55 PM                                                                                                                    
                                                                                                                                
CO-CHAIR FIELDS announced  that the next order  of business would                                                               
be  HOUSE BILL  NO. 193,  "An  Act establishing  a paid  parental                                                               
leave  program; relating  to unemployment  benefits; relating  to                                                               
the collection of child support  obligations; and relating to the                                                               
duties of the Department of Labor and Workforce Development."                                                                   
                                                                                                                                
5:01:00 PM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 5:01 p.m. to 5:02 p.m.                                                                       
                                                                                                                                
5:02:11 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CAROLYN  HALL, Alaska State Legislature,  as prime                                                               
sponsor,  gave   the  prepared  sponsor  statement   for  HB  193                                                               
[included  in  the  committee  file],   which  read  as  follows,                                                               
[original punctuation provided]:                                                                                                
                                                                                                                                
     House  Bill 193  would  establish  the Alaska  Parental                                                                    
     Leave Program.  As the State seeks  to recruit, attract                                                                    
     and retain  young families, this  policy would  serve a                                                                    
     crucial purpose:  giving parents the time  to bond with                                                                    
     their child.  By helping  families take  important time                                                                    
     off for  childbirth, adoption, or fostering,  the State                                                                    
     can ensure that parents  and newborns can attend follow                                                                    
     up  doctors  appointments;  lower   the  risk  for  re-                                                                    
     hospitalization;  have economic  security that  reduces                                                                    
     stress on  parents & children; further  cement the bond                                                                    
     between parents  and an adopted child  or foster youth;                                                                    
     and help  mothers re-enter the workforce  after any one                                                                    
     of these scenarios.                                                                                                        
                                                                                                                                
     By  building  off  of existing  infrastructure  in  the                                                                    
     State Department  of Labor & Workforce  Development, an                                                                    
     employee's  current  contributions  can go  towards  an                                                                    
     invaluable program that                                                                                                    
     returns many benefits back to our society.                                                                                 
                                                                                                                                
5:03:48 PM                                                                                                                    
                                                                                                                                
TRISTAN WALSH,  Staff, Representative Carolyn Hall,  Alaska State                                                               
Legislature,  gave a  presentation  on  behalf of  Representative                                                               
Hall, prime  sponsor of HB  193, via PowerPoint, titled  "HB 193:                                                               
Paid Parental  Leave."   He began  on slide  2 of  the PowerPoint                                                               
[included  in the  committee file],  and  gave a  summary of  the                                                               
bullet  points,  which  read  as  follows  [original  punctuation                                                               
provided]:                                                                                                                      
                                                                                                                                
     ? Currently,  the State of  Alaska only has  the Alaska                                                                    
     Family  and  Medical  Leave  Act,  which  provides  for                                                                    
     unpaid absences for state  employees and employers over                                                                    
     a certain size.                                                                                                            
     ?  Paid parental  leave is  known to  help improve  the                                                                    
     health  and life  outcomes of  infants  and parents  of                                                                    
     newborns and allows for fostering and adoption.                                                                            
     ?  2019  National  Defense Authorization  Act  extended                                                                    
     paid parental leave to federal employees.                                                                                  
     ? Alaska is  in competition with many  states for young                                                                    
     and talented  workers. Paid  parental leave  provides a                                                                
     well known and                                                                                                           
     valuable benefit at low cost and high benefit.                                                                           
     ? All other states  are pursuing these policies. Alaska                                                                  
     cannot afford to be left behind.                                                                                         
     ?  Paid  parental leave  allows  women  to reenter  the                                                                    
     workforce without being penalized.                                                                                         
                                                                                                                                
MR. WALSH  moved to slide 3,  citing that in the  absence of paid                                                               
parental leave, "23  percent of mothers return to  work within 10                                                               
days  of giving  birth ...  due to  the financial  burden on  the                                                               
household."   He further  reported that  is against  most doctors                                                               
orders.                                                                                                                         
                                                                                                                                
MR.  WALSH  moved to  slide  4,  drawing the  committee  members'                                                               
attention to  a graph  representative of  the Heckman  [Curve], a                                                               
statistical  model used  to illustrate  the  importance of  early                                                               
investment  in the  first  three years  of a  child's  life.   He                                                               
reported  that individuals  have better  socioemotional outcomes,                                                               
and  less likely  to be  dependent on  drugs.   He asserted  that                                                               
bonding  with parents  is  a very  transformative  first step  in                                                               
early investment.                                                                                                               
                                                                                                                                
MR. WALSH  gave an overview  of how paid parental  leave supports                                                               
parents,  shown  on slide  5,  which  read [original  punctuation                                                               
provided]:                                                                                                                      
                                                                                                                                
     ? Women  who take  paid leave have  a 51%  reduction in                                                                  
     the odds  of being  rehospitalized within 21  months of                                                                  
     giving birth.                                                                                                              
     ? Has  positive associations with reductions  in stress                                                                  
     and  increase  in  exercise,   both  critical  for  new                                                                    
     mothers.                                                                                                                   
     ? Mothers  with paid  leave are  less likely  to report                                                                  
     postpartum depression,  with some studies showing  a 2%                                                                  
     reduction in poor mental health  with each week of paid                                                                    
     leave.                                                                                                                     
     ? Can  reduce maternal  health disparities for  at risk                                                                  
     populations,  such  as  African American  and  American                                                                    
     Indian/Alaska Native mothers.                                                                                              
     ? Fathers are more  likely to report greater engagement                                                                  
     in   children's    lives,   boosting    cognitive   and                                                                  
     developmental benefits for children.                                                                                       
     ? Fathers who  take paid leave are more  likely to live                                                                  
     longer.                                                                                                                  
                                                                                                                                
5:06:38 PM                                                                                                                    
                                                                                                                                
CO-CHAIR FIELDS requested statistics on estimated savings were                                                                  
Alaska to achieve a 51 percent reduction of hospitalizations                                                                    
based on percentage of women on Medicaid for birthing care.                                                                     
                                                                                                                                
5:07:08 PM                                                                                                                    
                                                                                                                                
MR. WALSH continued with the  presentation, moving on to slide 6,                                                               
and  gave an  overview on  how paid  parental leave  would impact                                                               
Alaska,  which read  as follows  [original punctuation  provided,                                                               
with some formatting changes]:                                                                                                  
                                                                                                                                
   • Most working people in the United States do not have                                                                       
     paid  leave  through  their jobs,  including  about  75                                                                    
     percent of  Alaskans, which is ~270,000  workers in our                                                                  
     state.                                                                                                                   
   • Even unpaid leave under the federal Family and Medical                                                                     
     Leave Act is inaccessible for 68 percent of Alaskans.                                                                    
   • If women in Alaska participated in the labor force at                                                                    
     the same  rate as women  in countries with  paid leave,                                                                  
     there would  be an  estimated 8,000  additional workers                                                                  
     in  the  state  and   $313,870,000  more  wages  earned                                                                  
     statewide.                                                                                                               
   • Women make up 47% of our total workforce; 28% of                                                                           
     business owners are women.                                                                                                 
   • Paid leave can reduce working women's reliance on                                                                          
     public assistance and  SNAP by as much  as 40% compared                                                                    
     to women who do not have this benefit.                                                                                     
                                                                                                                                
MR. WALSH gave an overview on how paid parental leave                                                                           
supports businesses, shown on slide 7, which read as                                                                            
follows [original punctuation provided]:                                                                                        
                                                                                                                                
     ? In  states that  implemented paid  leave such  as NY,                                                                    
     businesses reported significantly  easier time managing                                                                    
     long absences.                                                                                                             
     ?  Two thirds  of businesses  report that  they managed                                                                    
     the absence by temporarily re-assigning work.                                                                              
     ? Studies  in California  found small businesses  saw a                                                                    
     14%  decrease in  per worker  labor costs  when workers                                                                  
     took  paid family  leave; the  smallest businesses  had                                                                  
     the greatest percentage based savings.                                                                                 
     ? In  CA, 92% of  businesses reported that  paid family                                                                    
     leave had a positive impact on employee turnover.                                                                          
     ?  Workers  who have  access  to  paid leave  are  more                                                                  
     likely to  return to  work than drop  out of  the labor                                                                  
     pool.                                                                                                                    
                                                                                                                                
5:09:55 PM                                                                                                                    
                                                                                                                                
CO-CHAIR FIELDS  asked about the gender  wage gap in Alaska.   He                                                               
remarked  that the  biggest  driver  of the  gender  wage gap  in                                                               
Alaska  was  mothers who  temporarily  left  the workforce  after                                                               
giving birth  and thus experienced  an interruption in  their pay                                                               
and career.                                                                                                                     
                                                                                                                                
5:10:37 PM                                                                                                                    
                                                                                                                                
MR. WALSH continued with an overview on how paid parental leave                                                                 
helps businesses, shown on slide 8, which read [original                                                                        
punctuation provided]:                                                                                                          
                                                                                                                                
     ? Turnover at  small businesses has been  shown to cost                                                                    
     approximately 23.5%  of that worker's annual  wage, and                                                                    
     can  go as  high as  150% as  a vacancy  goes on.  Paid                                                                    
     leave   can   dramatically    increase   retention   of                                                                    
     employees.                                                                                                                 
     ?  Studies have  found  that  firms implementing  these                                                                    
     policies have greater revenue and  profit per full time                                                                    
     equivalent employee;  technology companies saw  a $2.64                                                                    
     return for  every $1.00  invested. Manufacturers  saw a                                                                    
     $2.57 return for every $1.00.                                                                                              
     ? A  recent study  found that  workers with  paid leave                                                                    
     are 22% more likely to  recommend their job to a friend                                                                    
     who does not have that benefit.                                                                                            
     ?  Further  polling  found that  Generation  Z  workers                                                                    
     identified paid  family leave as the  number one policy                                                                    
     they consider when relocating for work.                                                                                    
                                                                                                                                
MR. WALSH moved to slide 9  and spoke to paid parental leave                                                                    
policies in  other states.   He reported that, in  2024, 199                                                                    
bills  [regarding  paid parental  leave]  were  filed in  36                                                                    
states.  He  further reported that three  states   Kentucky,                                                                    
Illinois, and  South Carolina - passed  legislation for paid                                                                    
parental  leave.    He  noted  that  seventeen  states  were                                                                    
considering  expansions   to  existing  programs   and  drew                                                                    
committee members'  attention to the  map on slide  9, which                                                                    
was representative of  the status of paid  parental leave in                                                                    
each state as of January 15, 2025.                                                                                              
                                                                                                                                
MR.  WALSH gave  an overview  of the  unemployment insurance                                                                    
model policy that HB 193 was  based upon, shown on slide 10,                                                                    
which read as follows [original punctuation provided]:                                                                          
                                                                                                                                
     ?  Unemployment insurance:  wage  replacement for  when                                                                    
     you are  unemployed and  looking for  work. Established                                                                    
     in 1935  by President Roosevelt in  the Social Security                                                                    
     Act.                                                                                                                       
     ? Another type of wage  replacement, such as short term                                                                    
     disability  is   widely  available:   however,  limited                                                                    
     application  available   for  family   purposes  beyond                                                                    
     pregnancy complications.                                                                                                   
     ?  Public  and  private  employers  are  familiar  with                                                                    
     unemployment insurance, payroll processes.                                                                                 
     ? State  of Alaska  requires employers to  collect this                                                                    
     on behalf of employees.                                                                                                    
     ? Employee contribution is  unique amongst many states,                                                                    
     and can be diverted towards paid parental leave.                                                                           
     ?   Establishes  a   separate  fund   where  employee's                                                                    
     contribution is held for the collection of a claim.                                                                        
     ? HB  193 also adjusts  benefits so that  an employee's                                                                    
     wage  replacement  is  always  at least  50%  of  their                                                                    
     earnings in the base period.                                                                                               
                                                                                                                                
MR.  WALSH   moved  to  slide  11,   drawing  committee  members'                                                               
attention  to  a  flowchart,  titled  "UI  Parental  Leave  Model                                                               
Flowchart,"   and  explained   that  the   employee  contribution                                                               
collected  for   unemployment  insurance  would   be  bifurcated,                                                               
sending  0.35  percent  to  the  State  Training  and  Employment                                                               
Program/Alaska    Technical    Vocational    Education    Program                                                               
(STEP/TVEP)  and  sending  0.15  percent to  the  parental  leave                                                               
program envisioned  by HB  193.  He  further explained  that 0.15                                                               
percent  currently goes  toward the  unemployment insurance  (UI)                                                               
trust fund.   He  cited Legislative Legal  and the  Department of                                                               
Labor  and Workforce  Development(DOLWD) in  explaining that  the                                                               
0.15 percent  of employee contribution  could be diverted  into a                                                               
paid leave program  for parents.  He noted that  the employer tax                                                               
rate would be held harmless under the proposed legislation.                                                                     
                                                                                                                                
5:16:20 PM                                                                                                                    
                                                                                                                                
MR.  WALSH,  in response  to  a  question from  Co-Chair  Fields,                                                               
noting  that  they  will  be presenting  more  modelling  to  the                                                               
committee in the future regarding  the funding mechanism under HB
 and  the solvency  of the  unemployment insurance  (UI) trust                                                               
fund.                                                                                                                           
                                                                                                                                
5:17:00 PM                                                                                                                    
                                                                                                                                
MR.  WALSH   moved  to  slide  12,   drawing  committee  members'                                                               
attention  to   a  flowchart,  titled  "Example:     hypothetical                                                               
employee with  the maximum  taxable wage  of $51,700,"  and noted                                                               
that the UI Tax Rate would  be $775.50, with the employee portion                                                               
representing  $258.50.   He further  noted that  of the  employee                                                               
portion, $180.95 would go towards  the STEP/TVEP programs and the                                                               
remainder,  would  go  towards  the  paid  family  medical  leave                                                               
program envisioned  under HB  193.   Additionally, he  noted that                                                               
the employer portion of $517 would go into the UI Trust Fund.                                                                   
                                                                                                                                
MR.  WALSH  moved  to  slide  13 and  gave  an  overview  of  the                                                               
different  policy levers  that the  legislators  could pull  when                                                               
considering HB 193, which read [original punctuation provided]:                                                                 
                                                                                                                                
     HB 193                                                                                                                     
     In determining the program, the four                                                                                       
     main factors to consider are:                                                                                              
     -Benefit duration                                                                                                          
     -Benefit amount (% wage replacement)                                                                                       
     -Contribution rate                                                                                                         
     -Eligible uses                                                                                                             
                                                                                                                                
5:18:35 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  COULOMBE stated  that she  received a  legal memo                                                               
stating that employer and employee  contributions are held in the                                                               
same regard by the federal government.                                                                                          
                                                                                                                                
MR. WALSH deferred to Legislative Legal Services.                                                                               
                                                                                                                                
5:20:40 PM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 5:20 p.m. to 5:21 p.m.                                                                       
                                                                                                                                
5:21:42 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE COULOMBE asked whether  there would be any concern                                                               
of legality with the employer  and employee contributions, noting                                                               
that she  received a  legal memo  stating that  the contributions                                                               
are restricted similarly.                                                                                                       
                                                                                                                                
ALLISON   RADFORD,   Legislative   Counsel,   Legislative   Legal                                                               
Services,  Legislative  Affairs  Agency, replied  that  once  the                                                               
state collects  funds for the purpose  of unemployment insurance,                                                               
federal  law dictates  that it  must  be used  accordingly.   She                                                               
explained that, under HB 193,  an additional special contribution                                                               
would be added  and collected in the same  manner as unemployment                                                               
insurance contributions  from the  employee and deposited  into a                                                               
separate  fund,  so  it  is  not collected  for  the  purpose  of                                                               
unemployment insurance.   She further  explained that  the amount                                                               
that  is collected  from the  employee is  "credited back  to the                                                               
employee against their unemployment insurance burdens."                                                                         
                                                                                                                                
[HB 193 was held over.]