Helping small businesses offer paid family and medical leave to their employees

Every year, millions of Americans welcome a newborn into the world, care for loved ones who require additional support, or need time to recover from a medical condition themselves. These common, yet challenging, life events often demand more time spent at home, making it difficult to maintain a routine work schedule and, in turn, creating financial uncertainty under already stressful and unpredictable circumstances. Having a child, tending to a family member, or prioritizing personal health and wellbeing should not force workers to miss a paycheck or lose their job entirely.

Senator Fischer first created a remedy for this dilemma in the Tax Cuts and Jobs Act of 2017. Her provision, the first nationwide paid leave policy in America’s history, aimed to alleviate anxiety for working families. This provision benefitted both employers and employees alike by offering small businesses in Iowa, Nebraska, and across the country a tax credit for voluntarily providing up to 12 weeks of paid family and medical leave (PFML) to their workers. Instead of quitting their job, workers could take paid leave as necessary, and instead of losing talented employees, small businesses could retain a strong workforce without breaking the bank. Recognizing the success of this policy, Congress extended this credit through the end of 2025 several years ago, but time is running short. If Congress fails to act quickly, this lifeline for both workers and small businesses will soon expire indefinitely.

That’s why we introduced legislation – the Paid Family and Medical Leave Tax Credit Extension and Enhancement Act – to make this important tax credit for small businesses permanent and hope to see it included in any year-end tax package that Congress considers. In our conversations with business owners back home, the urgent need to make this tax provision permanent is clear. But even the hard data underscores the importance of our bill. 

According to the U.S. Bureau of Labor Statistics, more than 41% of employees at businesses with more than 500 employees have access to PFML while just 20% of workers at businesses with fewer than 99 employees have access to PFML. That means that our smallest employers – which make up a considerable amount of the job creators in rural communities – are at a disadvantage when trying to keep workers on payroll after the birth of a newborn or when caring for a loved one or facing a personal medical challenge. At the same time, our small businesses simply do not have the same financial resources that large corporations do to offer PFML plans. As a result, this tax credit levels the playing field, ensuring that workers employed at small businesses are not unfairly punished and that small businesses can offer the best possible and most accommodating work environment for their employees at an affordable price.

We also made a few improvements in this legislation to make the credit work even better. Our bill expands the credit to cover a new insurance product employers can buy called Paid Family Leave insurance. We also made a technical fix to address employers with operations in both states that require PFML under local law and states without a requirement. Our legislation reduces the minimum time a worker must be employed to claim the credit from one year to 6 months to more quickly support employees who are starting their families and encourage young people to plant their roots in rural areas. Additionally, in response to a recent survey by the National Federation of Independent Business that found that only 22% of small business owners had heard of this tax credit, we took steps to increase outreach and help educate small businesses about the use of the credit. If business owners do not know about this provision, they cannot implement it – and that’s a problem. We must make sure that our job creators know that this credit is available to them so that they can offer PFML plans to their employees in a cost-effective manner. 

Small businesses form the backbone of the American economy and keep our Main Streets vibrant and strong. By equipping our job creators with the tools and resources that they need to offer PFML to their employees, we can provide workers and families with relief during life’s most difficult moments, power our economy forward, and grow our rural communities.

This op-ed was originally published in the Omaha World Herald on March 23, 2025.