The bill establishes a paid parental leave program in Texas, administered by the Texas Workforce Commission, under a new Chapter 320 added to the Labor Code. This program is designed to provide paid leave for certain employees who meet specific criteria, including those employed by companies with at least 50 employees or those that voluntarily contribute to the program. Eligible employees can request up to 40 days of paid leave for the birth of their child or 20 days for other qualifying events such as the birth of a spouse's child, adoption, or foster care. The amount of paid leave is capped at the lesser of the employee's average weekly wage or the state average weekly wage.

Additionally, the bill mandates employer contributions to fund the program, set at 0.15 percent of wages paid to eligible employees. Employers with fewer than 50 employees may also voluntarily participate. The Texas Family Fund will be created to manage these contributions, and the bill outlines the administration and rules for the program, which will take effect on January 1, 2026, with paid leave available starting January 1, 2027. The bill also includes provisions to protect employees from adverse employment actions related to their use of paid leave.

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