Celebrating New Paid Family Leave Policies in Tennessee: A Win for Families, Teachers, and Businesses
Tennesseans for Quality Early Education (TQEE) is thrilled to celebrate the passage of groundbreaking legislation providing six weeks of paid family leave to state employees, including public educators, and introducing a new state tax credit to help businesses offer paid family leave to their employees. This state tax credit doubles the existing federal incentive, making it easier for businesses to support their workforce during crucial family moments.
Why Paid Family Leave Matters: Insights from Research
For Families and Babies: Building Strong Foundations
The earliest weeks and months of a baby’s life are foundational. During this critical period, the interactions between a baby and their caregivers play a vital role in their physical, cognitive, language, and emotional development. The Harvard Center for the Developing Child emphasizes the importance of a stable, responsive relationship with an attentive, nurturing caregiver for healthy brain development and resilience.
Babies who lack secure relationships with caregivers are at greater risk of experiencing toxic stress, which can stem from neglect, abuse, or extreme poverty. Prolonged exposure to such stress can disrupt brain development, leading to long-term health, behavioral, and learning issues.
For Businesses: Enhancing Workforce Stability and Productivity
Paid family leave is not just beneficial for families; it’s a strategic advantage for businesses. Research from Vanderbilt University’s Prenatal to Three Policy Impact Center highlights that employees with access to paid leave are more likely to stay with their employer, exhibit higher morale, and be more productive. Women with paid family leave are more likely to return to their prebirth employer and remain employed by their child’s first birthday, ultimately contributing to a more stable and committed workforce.
In the context of current labor shortages, offering paid family leave is a crucial tool for attracting and retaining talent, particularly women. This has a positive ripple effect on family incomes and the state’s economic productivity. Vanderbilt’s research found that paid family leave boosts maternal labor force participation by 8 percentage points, underscoring its significant impact.
What the New Laws Mean for You
For State Employees and Public Educators
The new legislation grants Tennessee state employees and public educators six weeks of paid parental leave (PPL) to care for or bond with a newborn or adopted child. To qualify, employees must have worked full-time with an eligible state entity or local education agency for at least 12 consecutive months. They can take PPL within 12 months of the birth or adoption but must provide their employer with at least thirty days’ notice.
For detailed guidance:
For Businesses: Leveraging the New Tax Credit
Starting this year, Tennessee businesses can benefit from a new state tax credit for paid family leave, which matches the federal tax credit. This means:
- A 12.5% tax credit if the employer pays 50% of wages during up to 12 weeks of leave.
- A 25% tax credit if the employer pays 100% of wages during up to 12 weeks of leave.
This incentive allows more businesses to follow the lead of major Tennessee employers like BlueCross BlueShield, Kroger, and Nissan in offering comprehensive paid family leave benefits. The state tax credit applies to tax years ending December 31, 2023, through December 31, 2025, and will need to be extended for continued benefits.
For more information and guidance on the new tax credit, visit Tennessee Business Tax Credit Guidance.
A Brighter Future for Tennessee
The new paid family leave policies represent a significant step forward for Tennessee, benefiting families, educators, and businesses alike. By supporting parents during crucial early months, we are investing in the future resilience and success of our children, creating a more stable workforce, and enhancing the state’s economic competitiveness. TQEE applauds this progress and looks forward to the positive impact these policies will have across our state.
