Proposal would deduct from Illinois paychecks to create new state agency – Washington Examiner
A proposal in Illinois, led by State Senator Ram Villivalam, aims to create a Division of Paid Family and medical Leave within the Department of Labor through Senate bill 2413. The bill suggests introducing a tax on employee paychecks to fund a state-managed paid leave program, potentially imposing a 1.12% tax on employees, which would be divided between employers and employees. Critics, including Noah Finley from the National Federation of Autonomous Business and former state Representative Jeanne Ives, argue that the bill represents a “jobs tax” and will add financial burdens on workers and businesses. They express concerns about the program being poorly managed and the potential for increased litigation against employers. advocates for the bill argue it would provide necessary paid leave for various circumstances, allowing up to 27 weeks of leave under certain conditions. The bill is currently awaiting further debate in the Illinois Senate.
Proposal would deduct from Illinois paychecks to create new state agency
(The Center Square) — A small business advocate says a paid leave proposal in the Illinois Senate would be a direct tax on workers and employers.
State Sen. Ram Villivalam, D-Chicago, proposed creating the Division of Paid Family and Medical Leave within the Illinois Department of Labor with Senate Bill 2413.
Noah Finley is the Illinois state director for the National Federation of Independent Business.
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“Senate Bill 2413 is, in essence, a jobs tax. It’s going to be a direct tax on workers and employers in Illinois,” Finley told the Center Square.
Finley said the measure would take money from employee paychecks to form a new state agency.
“This creates a state-run program that would provide up to 27 weeks of paid leave, depending upon circumstances, for a wide variety of situations,” Finley explained.
The proposed Division of Paid Family and Medical Leave would be charged with the administration of a paid family and medical leave insurance program under the direction of a deputy director.
In a video post on X, former state Rep. Jeanne Ives, R-Wheaton, said SB 2413 would impose a 1.12% tax on employee paychecks.
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“It goes to a state-managed paid leave program, and then workers are given up to 18 weeks of paid family or medical leave each year, plus up to nine extra weeks for pregnancy,” Ives said.
“As an example, a worker making $100,000 will have the employer and worker pay in a total of $1,120, split 60-40 employer to worker. That money will go to a state-run fund to hand out paid leave to people who qualify for it. Not for me or my husband necessarily, but people the state says get the leave,” Ives added in a statement to the Center Square. “It’s not connected to the individual, it’s aggregated for the general population who applies for it. The tax is progressive with incomes up to double the Social Security base, which is $352,000 right now taxed, but benefits paid out at a capped rate much lower than what wealthier people pay in at. In other words, the middle and higher income folks will pay in a lot more than they get out if they even use the fund.”
Ives said SB 2413 is bad on multiple levels.
“The last thing you want is the state touching anything that is a paid benefit to you, because you know it’s going to be mismanaged,” Ives said.
Finley said the bill would be a tax on jobs.
“When we are already struggling to employ Illinois workers, the last thing we need to do is add another tax, another barrier to hiring people. We should instead be making it easier to hire people in this state,” Finley said.
Finley cited data from the Illinois Department of Employment Security, which indicates slow job growth for the state in most categories outside of government.
According to Finley, the smallest employers would suffer the most under SB 2413. He said the bill would also expose employers to potential lawsuits.
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“Under this legislation, outside interest groups can actually sue employers if they think that the employers are not complying fully with the law,” Finley said.
SB 2413 currently has a third reading deadline of May 9 in the Illinois Senate.
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