Alaska House Passes Paid Parental Leave, Exempts Seasonal Workers from Sick Leave

The Alaska House of Representatives voted Saturday to create the state's first paid parental leave program while exempting seasonal workers and small businesses from a 2024 ballot initiative's paid sick leave mandate.

House Bill 193 passed 36-4 after hours of debate and a dozen amendments. The legislation establishes eight to 12 weeks of paid parental leave funded through unemployment insurance contributions and reduces employer UI contributions by 0.20 percentage points. An amendment exempting seasonal workers and businesses with fewer than 10 employees from the paid sick leave requirements voters approved two years ago passed 22-18.

Representative Zack Fields, an Anchorage Democrat, opposed the sick leave exemption. "I think it's very problematic to substantially gut a ballot initiative less than two years after it was passed by voters," Fields said. "I want to emphasize there were more than 100 Alaska small businesses involved with passing this ballot initiative."

Representative Will Stapp, a Fairbanks Republican who sponsored the sick leave exemption, said the ballot measure created unintended consequences for seasonal employers. "The biggest challenge that the commercial fishing industry is having with this ballot initiative that would be fixed by Section 4 of this amendment is at the end of the season, half the workforce walks off the job and takes paid sick leave," Stapp said.

The paid parental leave program drew support from members who said Alaska needs the benefit to compete for working families. Representative Carolyn Hall, an Anchorage Democrat who sponsored the bill, said the program addresses workforce retention. "I cannot stress the importance of creating a paid parental leave program for Alaskans," Hall said. "It is a massive step in the right direction and a tremendous opportunity for working families in Alaska."

The bill restructures employer and employee contributions to unemployment insurance and related programs. Employers currently pay one percent into UI. Under the bill, employers will pay 0.30 percent into UI, 0.30 percent into the State Training and Employment Program, and 0.20 percent into paid parental leave, totaling 0.80 percent. That reduces their total contribution by 0.20 percentage points. Employees will pay 0.35 percent into training programs and 0.15 percent into paid parental leave. The paid parental leave program exempts businesses with fewer than 25 employees unless they opt in.

The House adopted an amendment allowing employees and employers paying into the paid parental leave fund to use the benefit, after debate over whether small employers should pay in without access. The body also adopted an amendment requiring employees to work for an employer for at least 13 weeks before becoming eligible for paid parental leave and removed foster parents from program eligibility.

Representative Jeremy Bynum, a Ketchikan Republican, raised concerns about long-term fund solvency. "We significantly changed this bill in finance less than a month ago," Bynum said. "One of the things that I have not had come to us yet is updated modeling on how the bill was changed."

Hall said the Department of Labor modeled the program extensively and built in safeguards. "Based on the modeling that has been discussed thus far, it is at about the year 2040 when you start to see a reduction in the capitalization of the paid parental leave program," Hall said. "And just like with many statutes and many of the policies that we pass in this body, we continually go back and we refine these policies to shore them up."

Fields defended the program's sustainability. "The member's characterization that the benefits are not sustainable is simply inaccurate," Fields said. "This has been modeled extensively by Department of Labor actuaries for two years as it has gone through the committee process."

The bill also increases maximum weekly unemployment benefits from $375 to $524 and adjusts benefits annually for inflation. Fields said the increase addresses Alaska's seasonal workforce challenges. "In no state is unemployment insurance more important than Alaska because we have the most seasonal workforce in our construction, oil, and gas industries," Fields said.

Representative Julie Schwanke, an Anchorage Republican, opposed the bill. "Running a small business is really hard," Schwanke said. "What we are doing here is handing a competitive advantage to large businesses and corporations in our state, and we are making it more difficult for small businesses to succeed."

Representative Sarah Vance, a Homer Republican, supported the sick leave exemption. "This is impacting all of the small town Alaska in a significant way," Vance said. "We have fishing, tourism, healthcare, and government jobs in my community, and you are telling me we cannot pass this."

The House rejected amendments that would have reduced the benefit to four to eight weeks or six to 12 weeks. The body adopted an amendment delaying the program's start date, with Hall supporting the change to allow more time for fund capitalization.

The bill now returns to the Senate for consideration of House amendments.