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 193 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.]