HB0446

HOUSE BILL 446

57th legislature - STATE OF NEW MEXICO - first session, 2025

INTRODUCED BY

Rebecca Dow and Gail Armstrong and Luis M. Terrazas

and Angelita Mejia and Jenifer Jones

AN ACT

RELATING TO EMPLOYMENT; AMENDING THE EARLY CHILDHOOD EDUCATION AND CARE FUND TO ALLOW APPROPRIATIONS FOR PARENTAL LEAVE COMPENSATION; ENACTING THE PAID PARENTAL LEAVE ACT; CREATING THE SUPPLEMENTAL PAID PARENTAL LEAVE FUND; PROVIDING FOR THE PAID PARENTAL LEAVE PROGRAM AND THE SUPPLEMENTAL PAID PARENTAL LEAVE PROGRAM TO PAY AN ELIGIBLE APPLICANT A PERCENTAGE OF THE EMPLOYEE'S WAGES TO ALLOW THE APPLICANT TO BOND WITH A NEW CHILD; LIMITING THE TIME ALLOWED FOR PAID PARENTAL LEAVE; EXCEPTING CERTAIN EMPLOYEES; PROVIDING FOR ADMINISTRATION OF THE PROGRAM BY THE WORKFORCE SOLUTIONS DEPARTMENT; PREEMPTING SIMILAR PROGRAMS; CREATING A TEMPORARY ADVISORY COMMITTEE.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

SECTION 1. Section 9-29A-1 NMSA 1978 (being Laws 2020, Chapter 3, Section 1, as amended) is amended to read:

"9-29A-1. EARLY CHILDHOOD EDUCATION AND CARE FUND.--

A. The "early childhood education and care fund" is created within the state treasury. The fund shall consist of distributions, appropriations, gifts, grants and donations. Income from investment of the fund shall be credited to the fund. Money in the fund shall be expended only as provided in this section.

B. The state investment officer, subject to the approval of the state investment council, shall invest money in the early childhood education and care fund:

(1) in accordance with the prudent investor rule set forth in the Uniform Prudent Investor Act; and

(2) in consultation with the state treasurer.

C. The state investment officer shall report quarterly to the legislative finance committee and the state investment council on the investments made pursuant to this section. Annually, a report shall be submitted no later than October 1 each year to the legislative finance committee, the revenue stabilization and tax policy committee and any other appropriate interim committees.

D. On July 1 of each year, a distribution shall be made from the early childhood education and care fund to the early childhood education and care program fund in an amount equal to the greater of five percent of the average of the year-end market values of the fund for the immediately preceding three calendar years or two hundred fifty million dollars ($250,000,000).

E. In addition to the distribution pursuant to Subsection D of this section and appropriations pursuant to Subsection F of this section, money in the early childhood education and care fund may be expended in the event that general fund balances, including all authorized revenues and transfers to the general fund and balances in the general fund operating reserve, the appropriation contingency fund, the tobacco settlement permanent fund, the state-support reserve fund and the tax stabilization reserve, will not meet the level of appropriations authorized from the general fund for a fiscal year. In that event, to avoid an unconstitutional deficit, the legislature may appropriate from the early childhood education and care fund to the general fund only in the amount necessary to meet general fund appropriations for that fiscal year and only if the legislature has authorized transfers from the appropriation contingency fund, the general fund operating reserve, the tax stabilization reserve and the tobacco settlement permanent fund that exhaust those fund balances.

F. In addition to the distribution pursuant to Subsection D of this section and appropriations pursuant to Subsection E of this section, the legislature may appropriate money from the early childhood education and care fund to the workforce solutions department for the purposes of paying leave compensation to employees and self-employed individuals covered by the Paid Parental Leave Act."

SECTION 2. [NEW MATERIAL] SHORT TITLE.--Sections 2 through 14 of this act may be cited as the "Paid Parental Leave Act".

SECTION 3. [NEW MATERIAL] DEFINITIONS.--As used in the Paid Parental Leave Act:

A. "applicant" means an employee or self-employed individual who is applying for leave compensation or supplemental leave compensation pursuant to the Paid Parental Leave Act;

B. "application year" means the twelve-month period beginning on the first day of the calendar week in which an employee or self-employed individual files an application for parental leave compensation;

C. "claim for leave" means an application for leave compensation or supplemental leave compensation that an applicant makes to the department pursuant to the Paid Parental Leave Act in accordance with department rules;

D. "department" means the workforce solutions department, the secretary or an employee of the department exercising authority lawfully delegated to that employee by the secretary;

E. "employee" means a person working within the state who performs a service for wages or other remuneration under a contract of hire, written or oral, express or implied, and includes a person employed by the state or a political subdivision of the state. "Employee" does not mean an employee of an employer subject to the provisions of Title II of the federal Railway Labor Act or an employee as defined in the federal Railroad Unemployment Insurance Act;

F. "employer" means a person that has one or more employees within the state and includes an agent of an employer and the state or a political subdivision of the state;

G. "fund" means the supplemental paid parental leave fund;

H. "Indian tribe" means a federally recognized Indian nation, tribe or pueblo, wholly or partially located in New Mexico, a governmental unit, subdivision, agency, department or instrumentality thereof or a business enterprise wholly owned by such an Indian nation, tribe or pueblo;

I. "leave compensation" means income that the department pays an applicant who takes parental leave;

J. "parental leave" means leave for which an applicant can apply for leave compensation pursuant to the Paid Parental Leave Act and that is granted to the applicant to allow the applicant to bond with a child of the applicant within twelve months of the birth or adoption of a child or placement of a foster child with the applicant if the applicant is a first time foster parent;

K. "secretary" means the secretary of workforce solutions;

L. "supplemental leave compensation" means income the department pays to an applicant who has opted into the supplemental paid parental leave program;

M. "supplemental parental leave" means parental leave that an employee may receive after opting into the supplemental paid parental leave program; and

N. "wages" means all remuneration for services, including commissions, bonuses or unpaid loans to employees and the cash value of all remuneration in any medium other than cash.

SECTION 4. [NEW MATERIAL] SUPPLEMENTAL PAID PARENTAL LEAVE FUND--CREATION.--

A. The "supplemental paid parental leave fund" is created in the state treasury and shall be administered by the department. The fund shall be held for the benefit of the employees and self-employed individuals who opt in to paying into the fund and shall consist of all revenue, including any fees collected pursuant to the Paid Parental Leave Act in accordance with department rules. Money in the fund shall be invested by the state investment officer. Income from investment of the fund shall be credited to the fund.

B. Money in the fund is appropriated to the department to distribute supplemental leave compensation pursuant to the Paid Parental Leave Act and to cover the costs of administration and outreach for the paid parental leave program pursuant to that act.

C. Money shall be disbursed from the fund only on warrant issued by the department of finance and administration pursuant to vouchers signed by the secretary or the secretary's authorized representative. Any unexpended or unencumbered balance remaining at the end of a fiscal year shall not revert or be transferred to any other fund.

SECTION 5. [NEW MATERIAL] APPLICABILITY--PAID PARENTAL LEAVE PROGRAM--SUPPLEMENTAL PAID PARENTAL LEAVE PROGRAM-- EMPLOYEE CONTRIBUTIONS.--

A. The Paid Parental Leave Act applies to:

(1) all public and private employees who are in the state of New Mexico, except those employees who are employed by the United States;

(2) the employers of employees as described in Paragraph (1) of this subsection, whether or not the employer is physically located in the state;

(3) self-employed individuals in the state of New Mexico; and

(4) Indian tribes that elect to be covered, or to terminate coverage, in the program for their employees.

B. The department shall administer a paid parental leave program and a supplemental paid parental leave program to provide leave compensation and supplemental leave compensation to employees and self employed individuals. Beginning January 1, 2028, eligible employees and self-employed individuals shall be annually entitled to up to:

(1) six weeks of leave compensation; and

(2) three weeks of supplemental leave compensation paid from the supplemental paid parental leave fund if the employee opts into the supplemental paid parental leave program.

C. An employee or self-employed individual shall automatically be enrolled in the supplemental paid parental leave program by contributing to the fund pursuant to Subsections D and E of this section.

D. Beginning January 1, 2027 and for each calendar quarter thereafter until January 1, 2030, there is assessed against each employee that wishes to opt in to the supplemental paid parental leave program one-half percent of the employee's wages up to the earnings cap established by the federal social security administration program, pursuant to the Federal Insurance Contributions Act. An employee shall not be required to make any contributions to the fund from leave compensation.

E. Beginning January 1, 2027 and for each calendar quarter thereafter until January 1, 2030, there is assessed against each self-employed individual as described in Paragraph (3) of Subsection A of this section that wishes to opt in to the supplemental paid parental leave program one-half percent of the individual's net income as designated by the self-employed individual.

F. The contributions of employees shall be remitted by the employer following the end of each quarter for which the contributions are deducted and on a date determined by the secretary.

G. The contributions of self-employed individuals shall be remitted by the individual following each end of the quarter for which the contributions are deducted and on a date determined by the secretary. A self-employed individual shall not be required to make contributions to the fund from leave compensation.

H. Nothing in this section shall be construed to prohibit an employer from providing additional leave compensation or extended length of leave to employees receiving compensation from the department.

SECTION 6. [NEW MATERIAL] ELIGIBILITY--LEAVE COMPENSATION AND SUPPLEMENTAL LEAVE COMPENSATION CALCULATION--DOCUMENTATION REQUIRED--NOTICE OF DETERMINATION.--

A. Beginning January 1, 2028, the department shall provide leave compensation to an eligible applicant who takes leave after the applicant, in accordance with the provisions of the Paid Parental Leave Act and department rule, has filed a claim for leave approved by the department.

B. Beginning January 1, 2028, the department shall provide supplemental leave compensation to an eligible applicant who takes leave after the applicant, in accordance with the provisions of the Paid Parental Leave Act and department rules, has:

(1) filed a claim for leave approved by the department;

(2) received six weeks of leave compensation; and

(3) contributed to the fund for at least six months during the twelve-month period prior to submitting an application.

C. An applicant shall be eligible for a maximum of three weeks of supplemental parental leave.

D. An applicant shall be ineligible to receive leave compensation or supplemental leave compensation if:

(1) the applicant willfully or knowingly files a fraudulent claim for leave or has filed a fraudulent claim for leave within the previous three years;

(2) the applicant is receiving unemployment insurance benefits during the period for which the claim for leave is filed;

(3) during leave, the applicant does not provide the care or use leave as related to the need for leave described in the applicant's application for leave;

(4) the leave compensation would duplicate the amount the applicant is receiving or has received in temporary total disability benefits from a workers' compensation claim for the same time period; or

(5) the leave compensation duplicates what the applicant is earning or has earned in wages for the same time period.

E. The department shall issue leave compensation and supplemental leave compensation to an eligible applicant whose claim has been approved as follows:

(1) the calculation of weekly leave compensation and supplemental leave compensation shall be based on the employee's average weekly wages during the twelve months immediately preceding the date of the claim for leave. For the purposes of this paragraph, the "employee's average weekly wages" means an amount calculated by the department by dividing the total wages earned by an eligible employee during the previous twelve months by the number of weeks worked during the previous twelve months. If the employee worked fewer than twelve months, then weekly leave compensation and supplemental leave compensation shall be based on the employee's average weekly wages during the weeks the employee worked;

(2) an eligible employee's weekly leave compensation or supplemental leave compensation shall equal one hundred percent of the compensation that would be paid to a non-tipped, state-minimum-wage-earning employee, pursuant to Section 50-4-22 NMSA 1978, working the same number of hours per week as the employee, plus sixty-seven percent of the employee's average weekly wages greater than the non-tipped, state minimum wage compensation; and

(3) the maximum amount of weekly leave compensation or supplemental leave compensation shall be no more than the annual mean wage of all occupations in New Mexico as calculated by the United States bureau of labor statistics state occupational employment and wage estimates for the most recent year available divided by fifty-two.

F. The department shall issue leave compensation or supplemental leave compensation to self-employed individuals as follows:

(1) a self-employed individual shall determine the annual net income to be used by the department when the self-employed individual enrolls in the paid parental leave program. A self-employed individual may adjust the individual's annual net income one time per year on the anniversary of the individual's enrollment;

(2) the calculation of weekly leave compensation and supplemental leave compensation shall be based on the self-employed individual's designated annual net income;

(3) a self-employed individual's weekly leave compensation or supplemental leave compensation shall equal one hundred percent of the compensation that would be paid to a state-minimum-wage-earning employee, pursuant to Section 50-4-22 NMSA 1978, working full time each week, plus sixty-seven percent of the self-employed individual's net income per week greater than the state minimum wage compensation; and

(4) the maximum amount of weekly leave compensation or supplemental leave compensation shall be no more than the annual mean wage of all occupations in New Mexico as calculated by the United States bureau of labor statistics state occupational employment and wage estimates for the most recent year available divided by fifty-two.

G. When an applicant or an authorized representative submits a claim for leave with the department, the department shall verify:

(1) if the applicant is an employee, a record of total wages, the total number of weeks worked and the average number of hours worked per week during the previous twelve months in the employment from which the applicant seeks leave; or

(2) if the applicant is a self-employed individual, documentation that the individual's business operated and earned net income from self-employment during the previous twelve months.

H. The department shall notify the employer and applicant in writing within twenty business days of application:

(1) if approved, and shall notify the applicant of the amount of leave compensation or supplemental leave compensation that the applicant is eligible to receive biweekly; provided that an eligible applicant shall begin receiving leave compensation within ten business days of the date of submission of a properly completed application or ten business days after approved leave begins;

(2) if denied, and shall notify the applicant of the grounds for denying the applicant's application for eligibility and of the applicant's right to appeal; and

(3) if further information or supporting documentation is required to determine the applicant's eligibility for paid leave or the amount of leave compensation; provided that when the department receives sufficient information or supporting documentation from the applicant to make an eligibility determination, the department shall adhere to the notification provision of this subsection.

I. Every individual filing a new claim for leave shall, at the time of filing such claim, be advised that:

(1) leave compensation and supplemental leave compensation may be subject to federal and state income taxes;

(2) requirements exist pertaining to estimated tax payments;

(3) the individual may elect to have federal income tax deducted and withheld from the individual's leave compensation or supplemental leave compensation payments at the amount specified in the federal Internal Revenue Code of 1986; and

(4) the individual is permitted to change a previously elected withholding status one time during each calendar year.

J. Amounts deducted and withheld from leave compensation and supplemental leave compensation shall remain in the fund until transferred to the federal internal revenue service.

K. The department shall follow all state and federal laws, rules and procedures pertaining to the deducting and withholding of income tax.

SECTION 7. [NEW MATERIAL] CLAIMS FOR LEAVE-- DOCUMENTATION--CONFIDENTIALITY.--

A. The department shall require an applicant who seeks leave compensation or supplemental leave compensation to provide, in accordance with department rules, evidence of the birth or adoption of a child or placement of a foster child with the applicant.

B. Information contained in an applicant's files and records pertaining to the Paid Parental Leave Act are confidential and not open to public inspection, other than to department employees or the employees of an approved privately operated paid leave program or plan in the performance of their official duties. However, the applicant or an authorized representative may review the records or receive specific information from the records upon the presentation of the applicant's signed authorization.

C. Employee information acquired by a private employer pursuant to the Paid Parental Leave Act shall be kept confidential by the employer; provided that confidential records may be used by department employees or the employees of an approved privately operated paid leave program or plan in the performance of their duties.

SECTION 8. [NEW MATERIAL] EMPLOYEE NOTICE TO EMPLOYER--REDUCTION OF OTHER LEAVE PROHIBITED.--

A. Beginning January 1, 2028, an employer shall allow an employee to take up to a combined total of nine weeks of parental leave and supplemental parental leave during any application year.

B. An employee shall:

(1) make a reasonable effort to schedule leave so as not to unduly disrupt the operations of the employer;

(2) provide the employer with prior notice of the schedule on which the employee will be taking leave twenty days before use or as soon as practicable; and

(3) provide the employer with documentation of the approved claim for leave pursuant to department rules.

C. The employer has the right to appeal a determination to the department within fifteen calendar days after receipt of documentation of the approved claim for leave.

D. Leave taken pursuant to the Paid Parental Leave Act shall not result in a reduction of the total amount of leave to which an employee is otherwise entitled pursuant to contract, policy, collective bargaining agreement or other law or rule in excess of the amount of leave actually taken pursuant to the Paid Parental Leave Act; provided that an employer subject to the federal Family and Medical Leave Act of 1993 may require an employee who takes leave and receives leave compensation or supplemental leave compensation pursuant to the Paid Parental Leave Act that also qualifies for leave pursuant to the federal Parental Leave Act of 1993 to take leave concurrently. An employer shall not require an employee to exhaust any other leave entitlement prior to granting leave pursuant to the Paid Parental Leave Act.

E. An employer shall post and keep posted in a conspicuous place upon its premises a notice that informs employees of the right to take leave, the ability to opt in to the supplemental paid parental leave program and the major provisions of the Paid Parental Leave Act.

SECTION 9. [NEW MATERIAL] RETURN TO EMPLOYMENT.--

A. A self-employed individual shall notify the department within ten business days of the self-employed individual's return to work.

B. Upon an employee's return after leave, an employer shall notify the department within ten business days that the employee has returned to work.

C. An employer that has employed an employee for one hundred eighty days or more prior to the commencement of an employee's leave shall:

(1) restore the employee to the position held by the employee when the leave was commenced; or

(2) place the employee in a position for which employee benefits, wages and other terms and conditions of employment are equivalent to or greater than those provided in the position from which the employee took leave.

D. Nothing in this section shall be construed to entitle a restored employee to:

(1) the accrual of seniority or employment benefits during the period the employee is using leave; or

(2) the right to any benefit or position of employment other than the right the employee would have been entitled to had the employee not taken the leave.

E. Any yearly certification or training that an employer requires as a condition of employment may remain in place and applicable to any employee taking leave; provided that nothing in this subsection shall supersede another provision of law or a collective bargaining agreement that governs an employee's return to work after leave.

F. Nothing in this section shall prohibit an employer from requiring an employee who uses leave to report periodically to the employer on the status and intention of the employee to return to work.

G. An employer shall pay its share of health insurance premiums and maintain an employee's health coverage while the employee is on leave pursuant to the Paid Parental Leave Act under terms that the employee would have received if the employee had not taken leave. The employee on leave shall pay the same share of premium payments as the employee would have paid if the employee were not on leave.

SECTION 10. [NEW MATERIAL] INTERFERENCE AND RETALIATION PROHIBITED.--

A. It is unlawful for an employer or any other person to interfere with, restrain or deny the exercise of, or the attempt to exercise, any right protected pursuant to the Paid Parental Leave Act.

B. An employer shall timely provide to the employee documents required to apply for leave.

C. An employer, employee organization or other person shall not take retaliatory personnel action or otherwise discriminate against a person because the person exercised rights protected pursuant to the Paid Parental Leave Act. Such rights include:

(1) requesting, filing for, applying for or exercising any right to take leave as provided for pursuant to the Paid Parental Leave Act;

(2) communicating to the employer or any other person or entity an intent to file a claim, a complaint with the department or courts or an appeal;

(3) testifying, planning to testify or assisting at any time in any investigation, hearing or proceeding pursuant to the Paid Parental Leave Act;

(4) informing any person about an employer's alleged violation of the Paid Parental Leave Act; and

(5) informing any person of the person's rights pursuant to the Paid Parental Leave Act.

D. It is unlawful for an employer's absence policy to count leave taken pursuant to the Paid Parental Leave Act as an absence that may lead to or result in discipline, discharge, demotion, suspension or any other adverse action.

E. The protections provided in this section shall apply to any person who reasonably but mistakenly alleges violations of the Paid Parental Leave Act.

F. An employer that is found by a hearing officer or court of competent jurisdiction to have discharged a worker in violation of this section shall rehire that employee; provided that the worker agrees to be rehired.

SECTION 11. [NEW MATERIAL] ADVERSE DETERMINATIONS--APPEAL PROCEDURES--ADMINISTRATIVE ACTIONS--DEPARTMENTAL DISCIPLINARY POWERS.--

A. An applicant or an authorized representative named in an application for leave may appeal an adverse determination of that application to the department as follows:

(1) the aggrieved party shall:

(a) file an appeal in writing with the department within fifteen business days of receiving notice of the adverse decision;

(b) set forth the reasons for appeal; and

(2) the secretary or authorized representative may:

(a) hold a hearing within ten business days after an appeal is properly made, due notice is given to the parties in dispute and mediation is refused by any party;

(b) develop a record of the proceedings; and

(c) rule on the appeal within twenty business days after the completion of the hearing and issue a final decision in accordance with Subsection B of Section 39-3-1.1 NMSA 1978.

B. An aggrieved party, including an employee or former employee, or the department on its own motion may bring an administrative action for an alleged violation of the Paid Parental Leave Act under a public or privately run leave program as follows:

(1) the aggrieved party or the department shall:

(a) file a complaint alleging a violation of the Paid Parental Leave Act in writing with the department within thirty business days of becoming aware of the alleged violation;

(b) set forth the grounds of the complaint; and

(2) the secretary or authorized representative shall:

(a) upon receipt of a complaint alleging a violation, first allow for mediation upon agreement by all parties;

(b) hold a hearing within ten business days after a complaint is properly made, due notice is given to the parties in dispute and mediation is refused by any party;

(d) have power to take disciplinary action, including investigating, fining, censuring or reprimanding a party or suspending or revoking a waiver issued pursuant to the Paid Parental Leave Act; and

(e) rule on a complaint within twenty business days after the completion of the hearing and issue a final decision in accordance with Subsection B of Section 39-3-1.1 NMSA 1978.

C. A party may appeal a final decision made by the department pursuant to the provisions of this section to the district court pursuant to Section 39-3-1.1 NMSA 1978.

D. The department may appear in its own name in district court in actions for injunctive relief to prevent any person or entity from violating the provisions of the Paid Parental Leave Act or rules promulgated by the department.

SECTION 12. [NEW MATERIAL] PREEMPTION.--

A. A city, county, home rule municipality or other political subdivision of the state shall not adopt or continue in effect any ordinance, rule, regulation, resolution or statute that establishes a program of rights and benefits as set out in the Paid Parental Leave Act, excluding a paid sick leave or paid time off ordinance, policy or resolution.

B. Subject to the requirements of the Paid Parental Leave Act, the provisions of Subsection A of this section shall not prevent a city, county, home rule municipality or other political subdivision of the state from establishing any leave policies for its employees.

SECTION 13. [NEW MATERIAL] COLLECTIVE BARGAINING AGREEMENTS UNAFFECTED.--Nothing in the Paid Parental Leave Act shall be construed to diminish the rights, privileges or remedies of any employee under any collective bargaining agreement.

SECTION 14. [NEW MATERIAL] DEPARTMENT TO PROMULGATE RULES--AGENCIES AND DEPARTMENTS TO COOPERATE.--

A. By July 1, 2026, the department shall adopt initial rules to implement the Paid Parental Leave Act.

B. State agencies and departments shall cooperate with the secretary to timely and efficiently provide the information and services necessary to carry out the provisions of the Paid Parental Leave Act.

SECTION 15. TEMPORARY PROVISION--PAID PARENTAL LEAVE IMPLEMENTATION ADVISORY COMMITTEE--CREATED--PURPOSE-- MEMBERS.--

A. The "paid parental leave implementation advisory committee" is created in the workforce solutions department. The advisory committee consists of eight members appointed by the secretary of workforce solutions. Members of the advisory committee include:

(1) four representatives of employers; and

(2) four representatives of employees.

B. The paid parental leave implementation advisory committee shall provide input regarding best practices for the efficient and timely development, implementation and promulgation of rules and educational materials to carry out the provisions of the Paid Parental Leave Act.

C. The secretary of workforce solutions shall consult with the paid parental leave implementation advisory committee at least quarterly as rules are developed to implement a program pursuant to the Paid Parental Leave Act.

D. Members of the paid parental leave implementation advisory committee are not entitled to per diem and mileage expenses. The workforce solutions department

shall provide staff for the committee.

E. The paid parental leave implementation advisory committee shall function from the date of its appointment, which shall be no later than October 1, 2025, until January 1, 2027.

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