State employees could receive Noem’s paid family leave expansion, despite legislative rejection

A state commission could endorse 12 weeks of paid family leave for state employees less than two months after lawmakers voted against changing state law to make that happen.

The Civil Service Commission will consider the rule change during Tuesday’s meeting. It would extend paid family leave for new parents from eight weeks to 12 for any full-time state employee with at least six months on the job.

It would also cover 100% of an employee’s salary for that 12 weeks, compared to the 60% of salary covered by the current policy.

Commission Chair Barbara Christianson of Rapid City said the board members have known for about a month that their April meeting would involve a rules hearing, but members only recently learned about the rule proposal on paid family leave.

The commission’s website shows that the rule was posted at around 1 p.m. Sunday.

“We have had no discussions on it,” Christianson said.

That’s not out of line with typical commission practice for rules hearings, she said, as commissioners use rules hearings to learn the details of proposals from staff members.

Paid family leave was a pillar of Gov. Kristi Noem’s legislative package for the 2023 legislative session, which ended a few weeks ago. Noem successfully pushed to create the current paid family leave program for state employees in 2020.

Noem seeks relief for employers, families in State of State speech

Since her time in Congress, Noem has framed the issue as a “pro-life” policy that supports women and families. In her State of the State address this January, she asked lawmakers to pass bills that would let more parents in the public and private sectors bond with their children.

Those bills would have done far more than the proposed rule before the commission this week could do.

On the state employee side, the proposal hinged on an insurance plan. House Bill 1151 would have authorized the state to ask for bids and select an insurance company that would cover 80% of the cost of paid family leave for state employees, with taxpayers picking up less than $3 million to cover the other 20%.

It also would have allowed private companies to buy into that insurance pool, in the interest of lowering premiums for the state and any private businesses that might choose to participate. 

State employees could have taken paid leave to care for a sick child, spouse or parent, or to care for family in the event of a deployment for an active-duty military spouse. Private employers would have had flexibility on how much family leave to offer.

Noem policy adviser Rachel Oglesby told lawmakers in the House that the insurance program would soften the budget blow of the policy. Allowing private businesses to buy into the insurance pool would allow the state to encourage the adoption of a benefit more employees have come to expect without using a government mandate.

“House Bill 1151 is not a government subsidy,” Oglesby said. “It is an opportunity.”

Among its backers were AARP of South Dakota, state employee groups and insurance companies.

A companion bill to the state employee leave plan, Senate Bill 154, would have created a $20 million pool of grant funds to help private businesses recoup the cost of offering paid family leave.

That bill was killed by a Senate committee on Feb. 15. The House bill died in committee the following day. 

At the time, lawmakers said there was no need for the governor’s legislation, at least as it related to state employees. 

“There’s room to do this within state government without this particular bill, and I hope that moves forward,” said Rep. Tony Venhuizen, R-Sioux Falls. “I do think when we get into the state participating in the private market, it’s maybe something that goes a little bit further than our body is ready to go.”

Oglesby did tell lawmakers on Feb. 16 that the state could expand family leave without a new law, but that the state couldn’t buy an insurance policy or expand eligibility without one.

Last year, she said, the state paid out 41,201 hours of paid family leave.

“If we juiced that up to 12 weeks at 100%, the total cost to the state would be about $2.7 million a year,” Oglesby said.

The language of the Civil Service Commission’s proposed rule does not spell out the cost to state agencies or make reference to any insurance policy.

State employees will welcome the expansion of benefits, according to Eric Ollila, the executive director of the South Dakota State Employees Organization.

Ollila’s group supported both of the paid family leave bills this year. There was disappointment about the failure of the paid family leave policy a few months back, he said, but “it was nice to see that the state wanted to go ahead and do that through the rulemaking process.”

The commission is set to meet on the rule at 1:30 p.m. Central time. Some commission members had planned to appear via Zoom, but Chair Christianson said it’s unclear if the meeting will be postponed in the face of an anticipated Tuesday snowstorm.

Staff with the Bureau of Human Resources did not immediately reply to requests for comment on Monday. Noem spokesman Ian Fury did not reply to an email and a call on paid family leave.