Bill Summary for HB1018

• Bill Number: HB1018
• Primary Sponsor: Representative A. Collins
• Purpose: To create the Strong Families Act, establishing an income tax credit for employers providing paid family and medical leave to eligible employees.

Key Provisions:

1. Employer Tax Credit:

• Employers are eligible for a tax credit equal to 25% of the wages paid to a qualified employee while on family and medical leave.
• Maximum Credit: $4,000 per employee per tax year.
• Family and medical leave must be provided for up to 12 weeks within a 12-month period.

2. Eligibility Criteria for Employers:

• Provide at least 4 weeks of paid family and medical leave to full-time employees annually.
• Offer prorated leave to part-time employees based on their work hours relative to full-time employees.
• Ensure leave is available in the smallest increments recognized by their payroll system.
• Adopt a non-retaliation policy, preventing discrimination or interference with employees utilizing family leave.

3. Qualified Family and Medical Leave:

• Defined as leave taken for:
  • An employee's serious health condition.
  • The birth or adoption of a child.
  • Caring for a child, spouse, or parent with a serious health condition.
• Excludes earned sick leave, annual leave, or compensatory leave.

4. Concurrent Leave:

• Family and medical leave under this act can run concurrently with leave required under state or federal laws, such as the Family and Medical Leave Act (FMLA).

5. Limitations:

• The tax credit cannot exceed the employer’s total income tax liability in a given year.
• Applicable to tax years beginning on or after January 1, 2025.

Layman’s Terms Summary:

HB1018 incentivizes Arkansas employers to offer paid family and medical leave by providing a tax credit of up to $4,000 per employee annually. To qualify, employers must provide at least four weeks of paid leave for situations such as childbirth, adoption, or serious health conditions affecting employees or their immediate family members. The leave policy must comply with non-retaliation and other protective measures, and the tax credit is limited to the employer's annual tax liability.