Today, the New Mexico House of Representatives approved HB 11, known as the Welcome Child and Family Wellness Leave Act. This legislation serves as a substitute for the Paid Family and Medical Leave (PFML) bill, which was passed by the House Commerce and Economic Development Committee on February 20, 2025. The new bill allows for six weeks of paid leave for various medical reasons and twelve weeks for childbirth or adoption.
The bill was passed in the House with a vote of 38 to 31, despite bipartisan opposition. Although it features a lower tax rate than its predecessor, it introduces a new employment tax affecting both employees and employers. Additionally, it includes a $9,000 payment per child to one parent upon birth or adoption. The annual cost of this benefit is estimated at $183 million based on New Mexico's birth trends.
The taxes will be imposed on employers starting January 1, 2027, and on employees from July 1, 2027. Benefits are scheduled to begin on January 1, 2028. According to the state's Fiscal Impact Report (FIR), New Mexico is expected to have high usage rates similar to other states with similar programs. The report predicts that the program's fund will face insolvency in its first year by $106,563,232, with deficits projected to reach $870,362,605 by 2031.
Carla Sonntag, president and CEO of New Mexico Business Coalition said: "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." She added that "Employees and employers should not be taxed on a program that will fail financially and lead to higher taxes."
During three hours of debate over the bill, Representative Rebecca Dow proposed an alternative that would offer benefits solely for childbirth or adoption without taxing employers or employees; however, this proposal was tabled.
Sonntag expressed hope that "the Senate has enough sense not to jeopardize the state, employees, and employers with this poorly written legislation," noting concerns about future financial sustainability despite current excess state funds.
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