## Legislative bill overview

The bill HR 138 aims to amend the Internal Revenue Code to provide a new tax credit for small businesses that offer paid family and medical leave to their employees. Specifically, the legislation proposes a refundable tax credit that would cover a percentage of wages paid to employees on leave, incentivizing more businesses to adopt such policies. The credit is designed to support small businesses financially while promoting employee welfare and work-life balance.

## Why is this important

This legislation is significant as it addresses the growing need for paid family and medical leave in the United States, where many workers currently lack access to such benefits. By incentivizing small businesses to implement paid leave policies, the bill could lead to improved employee retention, greater productivity, and enhanced overall public health. Additionally, it reflects a shift in workplace culture towards valuing employee well-being, which is crucial in the post-pandemic economic landscape.

## Potential points of contention

• Funding and financial implications for the federal budget, as increased tax credits could lead to significant revenue losses.


• Concerns regarding the adequacy of the proposed percentage of wages covered, which may not sufficiently alleviate the financial burden on small businesses.


• Potential disparities in access for businesses depending on their size and industry, which could lead to uneven benefits across the economy.


• Opposition from some business groups who argue that mandated paid leave could increase operational costs and hinder competitiveness.