Rio Rancho Regional Chamber of Commerce Expresses Concerns on Proposed Paid Family and Medical Leave Mandate in New Mexico

Rio Rancho, NM – January 25, 2024 – The Rio Rancho Regional Chamber of Commerce is issuing this press release to voice our concerns regarding the proposed paid family and medical leave mandate (HB 6) that received a “Do Pass” in its first committee in the New Mexico Legislature.

After conducting a thorough review, our Chamber has identified persistent issues in the current proposal that mirror the challenges faced during last year’s legislative session. The proposed bill raises significant bipartisan concerns about its potential impact on local economies and the financial burden it places on the state.

The proposed paid family leave mandate (HB 6) introduces a new tax on businesses and employees, with the likelihood of an escalating tax burden over time to cover utilization costs. Despite the involvement of an actuary in the rate-setting process, this does not alleviate the anticipated impact on businesses. Additionally, the legislation would necessitate the creation of a sizable bureaucracy within state government to oversee the program, adding administrative burdens for employers, particularly small businesses without full human resources departments.

Of particular concern is the potential major disruptions for employers, especially for most New Mexico businesses with fewer than 20 employees. These businesses often lack the flexibility to manage long-term vacancies, struggle to quickly hire temporary employees, and are ill-equipped to absorb the potential negative consequences of the proposed program.

The proposed bill’s broad eligibility requirements also raise concerns about potential misuse of the program. The inclusion of leave claims for situations involving non-family members “related by… affinity” and with a “close association” with the employee or their spouse could lead to abuse and increased challenges for businesses. These are all concerns, along with the Department of Workforce Solutions creating and administering a program that duplicates services which are currently offered in New Mexico by licensed insurance agents and insurance companies, services that transfer the risk to insurance providers and not to NM employees and businesses.

Moreover, the bill’s provisions for rates set annually based on use and unlimited taxation authority granted to the Workforce Solutions Secretary pose additional worries. Beginning in 2029, employees and employers face unknown premiums, and questions arise about the financial burden on businesses already grappling with various economic challenges.

In contrast, the Chamber recommends a more targeted approach, focusing on existing federal family leave guidelines. Implementing an “opt-in” program for employees and employers, managed by an existing licensed insurer, ensures the program is a feasible benefit to those currently offered by many employers today. Paid Family Leave, while socially beneficial, should be a choice based on individual needs, much like selecting health insurance.

While acknowledging the complexities surrounding paid family leave, the Chamber believes that a thoughtful, tailored approach is essential. Insurers, with a history of providing insurance to individuals and businesses, are heavily regulated to meet capital requirements. The proposed paid family leave act, as it stands, would not comply with New Mexico insurance laws, and it is crucial to consider the specific needs and circumstances of our state without imposing a one-size-fits-all solution that may hinder economic growth and create an unlimited tax burden for employees and employers.


Jerry Schalow  

Executive Director