Defeat of job-killing paid leave bill: A victory for NM’s small businesses

​House Bill 11 (HB 11), known as the Paid Family and Medical Leave Act, recently faced a significant setback in the New Mexico Legislature. The anti-business bill, designed to establish a state-administered paid family and medical leave program, was defeated in the Senate Finance Committee with an 8-3 vote, with only three Democrats supporting the measure. This outcome has sparked discussions about the bill’s potential implications, particularly concerning its impact on small businesses.​

HB 11 aimed to provide New Mexico workers with paid leave benefits:

Family Wellness Leave: This provision proposed up to six weeks of paid leave for circumstances such as serious health conditions, acting as a family caregiver, bereavement, military exigencies, or situations involving domestic violence, stalking, sexual assault, or abuse. Funding was to come from contributions by both employees and employers, with workers contributing 0.2% of their income and employers with five or more employees contributing 0.15% of wages. For an employee earning $1,000, this would translate to a $2 contribution from the employee and a $1.50 contribution from the employer.​

The defeat of HB 11 has been met with relief by many in the business community, particularly among small business owners who viewed the bill as potentially detrimental to their operations. The primary concerns centered around the financial and operational burdens the legislation would impose:​

• Financial Strain: The mandated contributions were seen as an additional tax on both employers and employees. Small businesses, often operating on thin profit margins, feared that these extra costs could lead to increased prices for consumers, reduced employee benefits, or even layoffs.​
  
• Operational Challenges: Replacing employees on extended leave poses significant challenges, especially for small businesses with limited staff. The potential difficulty in finding qualified temporary replacements could disrupt operations, reduce productivity, and negatively impact customer satisfaction.​

The journey of HB 11 through the legislative process was marked by intense debates and closely contested votes. The House Commerce and Economic Development Committee approved a substitute version of the bill on February 20, 2025, with a narrow 6-5 vote. Despite adjustments to address financial impact concerns, the bill faced opposition from various business groups. Terri Cole, executive director of the Greater Albuquerque Chamber of Commerce, argued that the bill imposed a tax increase on both employers and workers. Tom Patterson from the New Mexico Cattle Grower’s Association highlighted challenges specific to rural areas, noting that the assumption of readily available qualified labor to cover for employees on leave does not hold true in rural New Mexico.​