New Mexico (February 28, 2025) – Today, the New Mexico House of Representatives passed HB 11 Welcome Child and Family Wellness Leave Act. This was a substitute bill for the Paid Family and Medical Leave (PFML) passed on a straight party-line vote out of the House Commerce and Economic Development Committee on February 20, 2025.
The substitute HB 11 offers six weeks of paid leave for various medical reasons and 12 weeks for the birth or adoption of a child. The bill passed the House by a vote of 38 to 31, with bipartisan opposition to the passage. Although the tax rate is lower in the substitute bill, it is still a new employment tax on both employees and employers. The bill also provides for a payment to one parent of a new child by birth or adoption of $9,000 per child. The estimated cost for this benefit on an annual basis, according to public records for birth trends in New Mexico, is $183 million per year.
The tax will be levied on employers beginning January 1, 2027, and employees beginning July 1, 2027. Benefits will begin January 1, 2028. New Mexico is estimated to be a high-use state based on what is experienced in other states with related programs. In that scenario, the state’s Fiscal Impact Report (FIR) shows that the fund for this program will be insolvent in the first year of use in the amount of $106,563,232. The insolvency continues to worsen each year and by 2031 will have reached a deficit of $870,362,605.
“It’s a sad day in New Mexico when a legislative body would be so irresponsible as to pass a bill that taxes employees and employers and is known to have such huge solvency issues before it goes into effect,” Carla Sonntag, president and CEO of New Mexico Business Coalition said. “Employees and employers should not be taxed on a program that will fail financially and lead to higher taxes.”
Three hours of debate ensued for and against the bill. Representative Rebecca Dow offered a substitute bill that would only provide benefits for the birth or adoption of a child with no tax levied against employers or employees. That bill was tabled.
Sonntag said, “I hope the Senate has enough sense not to jeopardize the state, employees, and employers with this poorly written legislation. While the state is flush with excess cash this year, that will likely not continue.”