New Mexico Paid Family and Medical Leave Act: What small businesses need to know

The Paid Family & Medical Leave Act (PFMLA) would help establish the Paid Family & Medical Leave (PFML) Fund, a program that would be administered by the New Mexico Department of Workforce Solutions (NMDWS). The Fund would be a state-administered paid family and medical leave insurance program to cover leave compensation for a qualifying life event, paid for through modest employee and employer contributions. The program would make paid family and medical leave more affordable and accessible to small business owners and their employees.

Who would benefit?

All employers and workers who contribute to the fund and experience a qualifying life event would be eligible to apply for leave compensation. This includes:

• Part-time and seasonal workers
• Small business employees
• Remote workers employed by out-of-state employers
• Self-employed and contracted employees who opt in to the program

How would the program work?

After paying into the fund for at least six of the previous 12 months, PFML would be available for workers who need to take up to 12 weeks away from work due to specific qualifying events. During an employee's leave period, employers may use the wages to cover the temporary costs of covering the employee's work (overtime wages, temp employee).

What would be the cost of launching a paid family and medical leave program in New Mexico?

*State minimum wage beginning January 1, 2023 
**State Avg. Wage based on Bureau of Labor Statistics Occupational Employment Survey Annual Mean May 

What would be the timeline?

If the legislation is enacted, the PFMLA implementation timeline would be as followed:

• July 2025 to July 2026: Rulemaking and IT system build
• July 2026 to January 2027: Employer support and technical assistance
• January 2027 to December 2027: Employers and employees pay into the fund
• January 2028: AFTER paying into the fund for at least six months and submitting an application to NMDWS, employees may receive a percentage of average weekly wages for up to 12 weeks.

What are the benefits of implementing PFMLA in New Mexico for small business owners?

Implementing a program such as the PFMLA will benefit small employers in:

• Reducing turnover costs – Replacing an employee costs approximately 21% of the employee’s annual salary. Employees with access to paid leave are significantly more likely to be employed by their employer in the second year after the birth of a child or serious health event.
• Improving productivity and morale – Businesses in states with paid family leave laws report more than 50% increase on measures of productivity after the state’s paid leave implementation. 
• Reducing workplace injuries and deaths – When workers with serious health conditions take paid leave, they are more likely to be fully recovered when they return to work, decreasing risks of medical emergencies or relapses on the job. This protects employees, customers and business owners from liabilities associated with workplace accidents and injuries.
• No additional expense or small savings – Most businesses report no cost increase. Those already offering paid family or medical leave report cost savings with decreased benefit costs. One study found a 14% decrease in per worker labor costs for small businesses.

Where can I learn more about this proposal or get involved? 

Join the Paid Family and Medical Leave Coalition’s campaign to make sure lawmakers understand the importance of passing PFMLA in the 2024 legislative session.

• Visit the PFML Coalition webpage. There, you can learn more, sign up to join the campaign, share your personal story about the need for paid leave, and catch up on the most up-to-date news about the effort to pass PFMLA.
• Contact your state legislators. Express your support and share your story directly