Proposal would deduct from IL paychecks to create new state agency
[May 05, 2025]
By Jim Talamonti | The Center Square
(The Center Square) – A small business advocate says a paid leave
proposal in the Illinois Senate would be a direct tax on workers and
employers.
State Sen. Ram Villivalam, D-Chicago, proposed creating the Division of
Paid Family and Medical Leave within the Illinois Department of Labor
with Senate Bill 2413.
Noah Finley is the Illinois state director for the National Federation
of Independent Business.
“Senate Bill 2413 is, in essence, a jobs tax. It’s going to be a direct
tax on workers and employers in Illinois,” Finley told The Center
Square.
Finley said the measure would take money from employee paychecks to form
a new state agency.
“This creates a state-run program that would provide up to 27 weeks of
paid leave, depending upon circumstances, for a wide variety of
situations,” Finley explained.
The proposed Division of Paid Family and Medical Leave would be charged
with the administration of a paid family and medical leave insurance
program under the direction of a deputy director.
In a video post on X, former state Rep. Jeanne Ives, R-Wheaton, said SB
2413 would impose a 1.12% tax on employee paychecks.
“It goes to a state-managed paid leave program, and then workers are
given up to 18 weeks of paid family or medical leave each year, plus up
to nine extra weeks for pregnancy,” Ives said.
"As an example, a worker making $100,000 will have the employer and
worker pay in a total of $1,120, split 60-40 employer to worker. That
money will go to a state-run fund to hand out paid leave to people who
qualify for it. Not for me or my husband necessarily, but people the
state says get the leave,” Ives added in a statement to The Center
Square.
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Illinois state Sen. Ram Villivalam, D-Chicago
Greg Bishop / The Center Square
“It's not connected to the individual, it's aggregated for the
general population who applies for it. The tax is progressive with
incomes up to double the Social Security base, which is $352,000
right now taxed, but benefits paid out at a capped rate much lower
than what wealthier people pay in at. In other words, the middle and
higher income folks will pay in a lot more than they get out if they
even use the fund.”
Ives said SB 2413 is bad on multiple levels.
“The last thing you want is the state touching anything that is a
paid benefit to you, because you know it’s going to be mismanaged,”
Ives said.
Finley said the bill would be a tax on jobs.
“When we are already struggling to employ Illinois workers, the last
thing we need to do is add another tax, another barrier to hiring
people. We should instead be making it easier to hire people in this
state,” Finley said.
Finley cited data from the Illinois Department of Employment
Security, which indicates slow job growth for the state in most
categories outside of government.
According to Finley, the smallest employers would suffer the most
under SB 2413. He said the bill would also expose employers to
potential lawsuits.
“Under this legislation, outside interest groups can actually sue
employers if they think that the employers are not complying fully
with the law,” Finley said.
SB 2413 currently has a third reading deadline of May 9 in the
Illinois Senate.
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