(MONTPELIER, Vt.) — In a yellow-walled conference room at the Vermont statehouse this week, one attendee ate ice cream and another bounced a toddler on her lap — but all were focused on a bill that would tax personal wealth for the first time in U.S. history.
At the committee meeting, legislators took up a measure that would tax the capital gains of people with more than $10 million in net worth, even if the gains have not been cashed out.
In other words, if a wealthy person’s stock or real estate holdings go up in value over a given year, the individual would have to pay taxes on those gains, even if he or she doesn’t sell the underlying asset.
The bill, one of an array of similar measures introduced by state-level Democrats nationwide, takes up a cause championed on Capitol Hill by progressives like Democratic Massachusetts Sen. Elizabeth Warren and Independent Vermont Sen. Bernie Sanders.
Here’s what to know about the proposed wealth tax in Vermont and other efforts nationwide:
How would the Vermont wealth tax work?
The wealth tax would impose a levy upon the capital gains of a subset of the Vermont population who boast a net worth of more than $10 million.
For reference, some 1,000 tax returns in Vermont associated with about 2,800 people — including partners and dependents — reached income of $1 million or more in 2022, according to Federal Reserve data presented this week by Kirby Keeton, a nonpartisan legislative counsel for the Vermont assembly.
Those top earners made up 0.32% of tax returns but 20% of all income paid in Vermont that year, Keeton said.
Under the proposed bill, a smaller set of people who hold more than $10 million in net worth would pay a tax on the increased value of assets like stocks, bonds and real estate.
In addition, legislators have proposed a second bill that would impose a 3% tax on income earned beyond a threshold of $500,000.
Fair Share for Vermont, an advocacy group in support of the measure, says it could generate nearly $100 million in annual revenue or roughly 5% of the state budget.
Are other states considering wealth taxes?
The nonprofit Tax Justice Initiative is pushing for wealth taxes in California, Washington and Pennsylvania, according to the group’s website.
An additional sought-after measure would initiate a wealth tax study in Nevada, the group says.
Connecticut, Hawaii, Minnesota, Maryland and New York are among a wider set of states in which the group is carrying campaigns seeking taxes on wealthy corporations or individuals.
The state-level push has elicited a backlash from some lawmakers, however.
In Texas, voters passed a constitutional amendment in November that bans the potential adoption of wealth or net worth taxes.
Earlier this month, in California, Democratic Gov. Gavin Newsome dismissed the notion of using a wealth tax to address a budget deficit that has ballooned to nearly $40 billion.
Still, the wealth tax appears to have gained some traction among Democrats at the federal level.
Last year, President Joe Biden proposed a 2024 tax plan that included a 25% tax on the wealth of individuals with a net worth exceeding $100 million. The plan, Biden said, would apply to 0.01% of Americans.
(NEW YORK) — As car prices have climbed in recent years, bright-colored signs at dealerships and boldface headlines have blared warnings to buyers.
But less attention has been paid to the jump in price for a stiff expense that comes along with the vehicle: insurance.
Car insurance rates have climbed 36% since January 2020, according to an ABC News analysis of consumer price data released by the Bureau of Labor Statistics.
Within the past year alone, rates for car insurance have soared more than 20%, BLS data shows.
“Prices for a lot of things have gone up over the last few years,” Tom Simons, an economist at Jefferies who studies the auto industry, told ABC News. “The difference with car insurance is that it’s still going up while others have subsided.”
The rate increases tie directly to the surge in vehicle prices, analysts told ABC News, noting that the elevated car prices left owners more likely to seek repairs for their current vehicle than opt to buy a new one.
In turn, a spike in demand for car repairs sent up the price of such services, which led to ballooning insurance rates, analysts added. Those rates have continued to rise as repair shops weather expenses like pay increases for in-demand workers and high costs for parts, even as the supply shortages have begun to ease.
The average cost of car insurance in the U.S. stands at roughly $2,500 per year, personal finance site Bankrate found. In 2021, the average cost ran some $1,700, according to Bankrate data reviewed by ABC News.
The source of the rate increases took hold during the pandemic, when a global chip shortage snarled auto production, which sent prices skyward for new and used cars. The elevated prices made it more expensive for insurers to provide replacement vehicles after a major wreck.
Even more, the surge in prices altered the mentality of car owners focused on the “break-even point” at which it becomes more costly to repair a car than buy a new one, Simons said. As the prices of new and used cars skyrocketed, car owners became more willing to swallow high repair costs.
That dynamic caused a rush of demand for car repairs, leading to a shortage of workers and parts, raising the costs faced by repair shops and the prices charged to insurers.
Car repair prices climbed 7% over the past year, a rate more than double the overall pace of inflation during that period, BLS data showed.
Insurers have struggled to make up for expenses amid the sky-high prices for new vehicles and repairs, Jeff Rieder, head of insurance at research firm Aon, told ABC News.
“As much as people are being impacted by the increase in their insurance costs, it’s still not enough for insurers to cover their losses,” Rieder said. “Auto insurance has become an unprofitable business for most companies.”
Despite the forces pushing rates up, the pace of increases is expected to slow in the coming months, analysts said.
After rebounding from the pandemic-era car shortage, the auto industry has built up a glut of new vehicles, which should slow price increases for new cars, Simons said. That will ease the pain for insurers when a plan calls for a replacement vehicle and could soften demand for repairs as customers shift their break-even point, he added.
The labor and parts shortage facing repair shops is likely to persist, however, Simons said. Wider adoption of electric vehicles could also complicate the future of insurance rates, Simons added, since such cars require fewer parts but each one is relatively costly to replace or fix when compared with the components of a combustion vehicle.
“That’s a wild card,” Simons said. “I’m not 100% sure how this will go.”
In this June 5, 2023, file photo, Apple CEO Tim Cook stands next to the new Apple Vision Pro headset, displayed during the Apple Worldwide Developers Conference in Cupertino, Calif. — Justin Sullivan/Getty Images, FILE
(NEW YORK) — Apple Vision Pro, a mixed reality headset, arrives in stores next week promising a personal movie theater wherever users go and screen navigation at the tap of a finger.
The buzzy product, however, bears a price sure to deflate some customers. The most affordable model runs $3,499 while a higher-powered version reaches nearly $4,000.
The high price owes to costs associated with production of the Vision Pro, as well as an initial focus on reaching professionals such as developers who could enhance the product with additional apps, analysts said.
“It’s a very early product,” Ben Bajarin, analyst at research firm Creative Strategies, told ABC News. “There’s a scale and manufacturing challenge that Apple is up against.”
Apple did not immediately respond to ABC News’ request for comment.
Here’s what to know about why the Vision Pro costs $3,499 and whether customers will pay it:
Why is the Vision Pro priced at $3,499?
The price reflects the costly development and production behind the Vision Pro, which required the company to build components specifically for the headset, analysts said.
Laminated glass operates as a surface for the cameras and sensors on the device, while a flexible Light Seal helps mold the product to a user’s face, Apple says. A brand-new R1 chip, Apple says, allows the machine to process inputs from a person’s eye and hand motions.
“If anything, the price is on the low side given the technology that’s packed into this,” Avi Greengart, lead analyst at research firm Techsponential, told ABC News.
Speaking to ABC’s Good Morning America in July, Apple CEO Tim Cook said the price of the Vision Pro is rooted in the high costs of producing what he considers a technological breakthrough.
“The engineering and depth of engineering in it is mind blowing,” Cook said. “Does it come for free? It costs something to do that. But I think it’s a great value.”
Since Apple has yet to build full-scale manufacturing for the product, the company faces difficulty making the large quantity of headsets necessary to quench a mass market at a lower price point, analysts added.
Plus, they said, initial uptake among developers and other professionals most willing to pay a premium for the Vision Pro will enhance its offerings when it reaches a wider audience.
“Apple has been pretty clear in positioning this product as a blank canvas for developers to create and make something brand new,” Bajarin said.
The price also aligns with Apple’s typical role as a maker of items that cost more than their competitors’ products but aim to make up for the disparity with a better user experience, Angelo Zino, senior industry analyst at CFRA Research, told ABC News, noting a similar dynamic with its smartphone.
“Apple is being who Apple is,” Zino said.
Will customers pay the high price for a Vision Pro?
Initial response to the Vision Pro suggests customers are willing to pay the high price — at least some of them.
The product won’t be available in stores until next week, but pre-orders sold out almost immediately when they opened on Jan. 19, Ming-Chi Kuo, an analyst at TF International Securities, said in a Medium post on Monday. Within hours, shipping times jumped to as long as seven weeks, he added.
In all, Kuo found, the company sold as many as 180,000 headsets in the first weekend they were available for preorder.
Consumer appetite appeared to ebb quickly, however, Kuo said. Within 48 hours, shipping times had stabilized, contrasting with the prolonged extensions of shipping delays that typically come in response to iPhone model releases, Kuo added.
“The inability to sustain a steady increase in pre-order demand is a major concern,” he said.
Analysts who spoke to ABC News said they expect the company to sell roughly 500,000 headsets this year. By comparison, Apple sold roughly 232 million iPhones in 2022, the most recent year for which data is available.
“They’ll sell every Vision Pro they can make,” Bajarin said, pointing to the production challenges as the primary impediment to higher sales.
(WASHNGTON) — Energy Secretary Jennifer Granholm can relate to Americans’ anxiety over electric vehicles.
The former governor of Michigan and longtime EV owner (who currently drives a Ford Mach-E) says she has experienced her own challenges with public charging on road trips. She has heard from drivers who are reluctant to give up their eight-cylinder engines and large trucks and SUVs for an electric model. But she is convinced that more Americans will soon realize the benefits of owning one, helping to change the current anti-EV rhetoric in this country.
“The Ford F-150 is a great example of a big car that has gone electric. But people have to make their own decisions,” Granholm told ABC News in an interview Thursday. “I get it — nobody is gonna force anybody to make these decisions. I honestly think … as the price of the electric vehicle comes down, and it has dropped 23% year-over-year, and the price of operating the car and not having to go to the gas station and being able to ‘fill it up’ for much less and more conveniently, honestly, I think it’s going to sell itself.”
She added, “People love their cars. And I think they’ll love their EVs, too.”
Tesla, which commands 56% of the U.S. electric vehicle market, has largely been responsible for the boost in EV sales, which hit a record of nearly 1.2 million units in 2023. According to data from Edmunds, the average transaction price of a new EV last December was $62,526 versus the industry average of $48,408.
Tesla on Wednesday said it sold 1.8 million vehicles in 2013, a 35% jump from 2022, but warned that sales growth would be “notably” slower this year. The carmaker has slashed prices on its popular Model 3 and Model 7 models to maintain its market share. The company’s shares tanked on Thursday even with the announcement of a “next generation low-cost vehicle” coming in late 2025.
Electrifying the U.S. auto industry is a top priority for President Joe Biden. The federal government has provided millions of dollars in funding for the expansion of the nation’s public charging infrastructure, including the maintenance of broken or nonfunctioning chargers. Sales of new electric vehicles totaled 7% of the U.S. market in 2023 though Biden’s goal is to reach at least 50% by 2030.
Owning an electric vehicle and supporting the industry’s push to go green eclipses blue state and red state politics, Granholm argued.
She pointed to the thousands of workers in the South who work on assembly lines building electric SUVs and batteries for major automakers like Mercedes-Benz, BMW, Ford, Volkswagen, Volvo and Genesis. Mercedes-Benz, for example, invested $1 billion in a state-of-the-art battery factory in Alabama. Hyundai Motor Group has teamed up with LG Energy Solution on a $4.3 billion electric vehicle battery plant in Georgia.
“All of those factories that I was talking about regarding building electric vehicles and electric vehicle batteries, 60% of them are going into red states. So, you know, people in red states love their EVs, too, and are working at these factories,” Granholm said. “I just think that over time, the political nonsense about it will die down and people’s experience will speak much more loudly.”
She went on, “For those who care about global warming [and] climate change, EVs are a solution for them. For those who care about cost, EVs are a solution for them. For those who care about power, EVs are a solution.”
ABC News’ complete interview with Secretary Granholm will be published on Monday, Jan. 29.
(NEW YORK) — Shares of Tesla plummeted more than 10% in afternoon trading on Thursday, less than 24 hours after the company reported earnings that fell short of expectations and cautioned of sluggish sales over the duration of this year.
Revenue and profits missed analyst expectations over the three months ending in December, according to the earnings report released on Wednesday.
In all, the company delivered 1.81 million cars in 2023, more than it had in any previous year, the earnings report said. However, Tesla has cut prices as it faces increased competition, putting downward pressure on the company’s revenue.
Further, the company’s vehicle delivery growth “may be notably lower” in 2024, Tesla said in the earnings release.
“Tesla is nothing more than a struggling car company,” Gordon Johnson, CEO and founder of data firm GLJ Research, who is bearish on Tesla, told investors in a note Thursday reviewed by ABC News.
For its part, Tesla said the slowdown owes to the company’s focus on developing a “next-generation vehicle” that will arrive as soon as the second half of 2025. That improved vehicle will supercharge sales, the company said.
“Our company is currently between two major growth waves,” the earnings report said. “The first one began with the global expansion of the Model 3/Y platform and the next one we believe will be initiated by the global expansion of the next-generation vehicle platform.”
The explanation, echoed during a conference call Wednesday, failed to allay the concerns of Dan Ives, a managing director of equity research at the investment firm Wedbush, who is typically bullish on the company.
The conference call, Ives told ABC News in a statement, amounted to a “trainwreck.”
The earnings report has shaken the “near-term confidence” previously endorsed at Wedbush, Ives added. “But we remain firm on a long-term bull thesis around Tesla and the broader AI story set to take hold,” he added.
Tesla CEO Elon Musk drew attention last week when he said in a post on X, formerly known as Twitter, that he’s seeking greater voting control of the electric carmaker, threatening to otherwise pursue major projects such as artificial intelligence outside of the company.
The Tesla board, Musk said, should grant him 25% voting control, an amount that would nearly double the vote share currently afforded to Musk through his stake in the company.
The company has also faced government inquiries over risks posed by some of the technology in its vehicles.
In December, Tesla agreed to recall about 2 million cars over a safety issue tied to its autopilot system, the National Highway Traffic Safety Administration said. Earlier this month, the company recalled an additional 1.6 million vehicles exported to China, citing a problem with the car’s assisted steering system.
The uncertainty that looms over the company, Ives said, amounts to a “bitter pill to swallow for the bulls.”
An exterior view of the Dunkin’ Donuts restaurant in Muncy, Pennsylvania, June 10, 2023. (Paul Weaver/SOPA Images/LightRocket via Getty Images)
(NEW YORK) — Lactose intolerant coffee drinkers who opt for nondairy alternatives like soy, almond or oat milk in their drinks at Dunkin’ may pay as much as $2 more for the alternatives, which a new potential class-action lawsuit claims could constitute discrimination.
The suit, filed last month in the U.S. District Court for the Northern District of California, seeks class certification and represents 10 Dunkin’ customers who say they purchased beverages “that contained non-dairy milk alternatives” between 2018 and 2023, and “paid a surcharge” for either “plant-based or lactose-free milk” in California, New York, Texas, Colorado, Massachusetts and Hawaii.
According to legal documents obtained by ABC News, the plaintiffs named in the suit all suffer from lactose intolerance and milk allergies, making it medically necessary “to avoid consuming drinks that contain milk.”
Depending on the date and location, the customers were charged anywhere from 50 cents to $2.15 extra for the substitution, the filing states.
The lawsuit seeks damages amounting to no less than $5,000,000, and plaintiffs demanded a jury trial.
On Friday, Dunkin’ filed a waiver that acknowledged the lawsuit. The company has until March 4 to respond.
The lawsuit specifically points to the “allergen statement” displayed in Dunkin’ stores that advises customers to inform a barista if they have a food allergy before placing an order.
“Dunkin will modify its regular beverage offerings to remove sugar or use sugar-free sweeteners at no additional charge for those persons with diabetes or who need to control weight,” the lawsuit states. “However, they only accommodate those with lactose intolerance or allergies to milk by imposing a surcharge. There is no expertise or additional work required of Dunkin employees that would substitute whole milk or fat-free milk in place of 2% regular milk, or who would make caffeine-free or sugar-free beverages, to also be able to substitute Non-Dairy Alternatives such as soy, almond, coconut, oat, or other lactose-free ‘milk’ in place of 2% regular milk.”
The lawsuit claims that because lactose intolerance and milk allergies are both considered disabilities, Dunkin’s “conduct violates the Americans with Disabilities Act,” as well as state anti-discrimination laws where the respective customers purchased their beverages.
The ADA states that public entities are required to make “reasonable modifications” to policies or practices when it’s necessary for an individual with a disability to afford their goods, services, facilities, privileges or advantages.
As cited in the lawsuit, the ADA also states that “a public accommodation may not impose a surcharge on a particular individual with a disability or any group of individuals with disabilities to cover the costs of measures, such as the provision of auxiliary aids, barrier removal, alternatives to barrier removal, and reasonable modifications in policies, practices, or procedures, that are required to provide that individual or group with the nondiscriminatory treatment required by the Act or this part.”
In this case, plaintiffs claimed Dunkin’ violated the ADA due to the failure “to make modifications that are necessary to afford goods and services to persons with lactose intolerance but instead imposes a surcharge on this group, purportedly to cover the cost of such measures.”
Dunkin’ did not immediately respond to ABC News’ request for comment on the lawsuit. The Massachusetts-based coffee chain has not yet issued a public statement on the matter.
Martin Shkreli, former chief executive officer of Turing Pharmaceuticals AG, exits court in New York, US, on Wednesday, Oct. 4, 2023. (Bloomberg / Contributor/Getty Images)
(NEW YORK) — Martin Shkreli’s lifetime ban from the pharmaceutical industry was upheld by a federal appeals court in New York on Tuesday.
A three-judge panel of the 2nd U.S. Circuit Court of Appeals ruled Shkreli was punished appropriately for antitrust violations.
Shkreli increased the price of the antiparasitic drug Daraprim — an anti-malaria medication often prescribed for HIV patients — by 4,000%, from $17.50 per pill to $750 per pill in 2015.
Shkreli, a former pharmaceuticals CEO who was nicknamed “Pharma Bro” after hiking the cost of the lifesaving drug, was convicted of securities fraud and had faced a sentence of up to 20 years in prison.
In 2018, Shkreli was convicted of securities fraud and other offenses and was sentenced to seven years in prison.
At the time of his sentencing, Shkreli apologized for his “disgraceful judgment” and dispensed with his prior criticisms of the court and his conviction.
“The only person to blame for me being here is me,” he said. “There is no government conspiracy to take down Martin Shkreli. I took down Martin Shkreli with my disgraceful and shameful actions.”
After serving about five years, Shkreli was released from prison early in May 2022.
After the Federal Trade Commission sued him a court ordered the lifetime ban and made him repay $64 million.
Shkreli argued the lifetime ban was excessive and limited his public speech. The appellate court found the ban was a reasonable measure to protect the public from future price-fixing.
“Given Shkreli’s pattern of past misconduct, the obvious likelihood of its recurrence, and the life-threatening nature of its results, we are persuaded that the district court’s determination as to the proper scope of the injunction was well within its discretion,” according to the opinion.
Shkreli’s company, Vyera Pharmaceuticals, settled allegations it suppressed competition for Daraprim, its most valuable drug, and filed for bankruptcy last year.
(NEW YORK) — With tax season set to kick off next week, the IRS is launching a new initiative to redesign and simplify common tax documents.
The changes will eventually apply to around 170 million letters that are sent out to individual taxpayers every year. The notices, for example, remind taxpayers of how much they owe, that they have made an error on their returns, or that they have been victims of identity theft.
The current IRS forms are often complicated, confusing and filled with legal jargon. The redesigned versions are shorter with clearer language about the steps taxpayers need to take in the specific notice they receive.
“We need to put more of these letters into plain language, something an average person can understand without needing to hire a tax or legal professional,” IRS Commissioner Danny Werfel said on a call with reporters Tuesday.
Letters affecting about 20 million taxpayers will be redesigned for the current 2024 tax season. Werfel said the goal is to cover 90% of all notices sent to taxpayers by next year’s filing season.
“This is a big undertaking to the IRS, and it will take time and resources” Werfel said, crediting funding that was made available through the Inflation Reduction Act.
That legislation, passed in August 2022, allocated $80 billion to the IRS over 10 years, as part of a push to modernize the agency. Some of those funds have since been clawed back amid ongoing spending fights in Congress.
The IRS says the new “Simple Notice Initiative” builds on a previous effort to improve paperless processing, making it easier for taxpayers to submit documents online.
The 2024 tax filing season officially kicks off on Jan. 29.
(NEW YORK) — Venmo, Zelle and Cash App are leaving consumers vulnerable to fraud that’s “draining bank accounts of significant sums of money,” Manhattan District Attorney Alvin Bragg said in letters to the companies that own those financial apps. He demanded they increase protections.
Bragg’s letters said he was writing “in response to a growing number of incidents” involving fraud and theft “through the exploitation of your company’s mobile financial applications on personal electronic devices such as iPhones.”
Peer-to-peer payment services now handle an estimated $1 trillion in payments and the district attorney said “frauds and scams have proliferated” as usage climbs.
In the past year, there have been thefts stretching from Los Angeles, where several people were robbed of thousands of dollars through Venmo at knifepoint, to Orlando, where a woman had thousands drained from her Venmo after a child asked to use her phone. Similar thefts and robberies have been publicly reported in West Virginia, Louisiana, Illinois, Kansas, Tennessee, Virginia and elsewhere across the United States.
“These crimes involve an unauthorized user gaining access to unlocked devices and then draining bank accounts of significant sums of money, making purchases with mobile financial applications, and using financial information from the applications to open new accounts,” Bragg’s letters said. “Offenders also take over the phone’s security by changing passwords, recovery accounts, and application settings. The ease with which offenders can collect five- and even six-figure windfalls in a matter of minutes is incentivizing a large number of individuals to commit these crimes, which are creating serious financial, and in some cases physical, harm to our residents.”
The district attorney called on Venmo, Zelle and Cash App to adopt additional security measures, including imposing limits on transactions, requiring secondary verification of up to a day and better monitoring of unusual activity.
“I am concerned about the troubling rise in illegal behavior that has developed because of insufficient security measures connected with your software and business policy decisions,” Bragg’s letters said.
He is requesting meetings with the companies.
Paypall, the owner of Venmo; Square Inc, the owner of Cash App; and Zelle did not immediately respond to ABC News’ request for comment.
(NEW YORK) — A children’s clothing brand is facing criticism for the way it handled one employee’s request to work remotely while her newborn son was treated in the neonatal intensive care unit.
The controversy erupted into public view last week when Ying Liu, the founder and CEO of Kyte Baby, a company that sells infant sleep sacks and clothing made with bamboo material, took to TikTok to issue an apology to the employee, identified as Marissa, whose parental leave request was denied.
“Hey guys, it’s Ying. I wanted to hop on here to sincerely apologize to Marissa for how her parental leave was communicated and handled in the midst of her incredible journey of adoption and starting a family,” Liu, a mother of five, according to the Kyte Baby website, said in the 90-second video, posted to Kyte Baby’s TikTok account on Jan. 18. “I have been trying to reach out to her to apologize directly as well.”
Liu said in the video that Kyte Baby “prides itself” on being a “family-oriented company,” and said she would be reviewing the company’s human resources “policy and procedures,” in light of the incident.
The employee, Marissa, reportedly adopted a son who was hospitalized in the NICU following his birth in late December. ABC News has not been able to reach the employee for comment.
Liu’s apology, which received more than two million views, drew criticisms from some TikTok users who characterized it as inauthentic and not going far enough to support the employee. Other commenters threatened to boycott the brand.
Shortly after posting the first video, Liu posted a second video on TikTok in which she acknowledged the first apology was “scripted” and “wasn’t sincere.”
She explained in the second video that she was the leader who “vetoed” Marissa’s request to work remotely while her son was in the NICU, saying, “I own 100% of that.”
“When I think back, this was a terrible decision,” Liu said. “I was insensitive, selfish and was only focused on the fact that her job had always been done on-site and I did not see the possibility of doing it remotely.”
Liu also said in the video, which received six million views, that she agreed with people who said Kyte Baby needs to set an example as a women-led business focused on baby products.
“I think a lot of comments are right. We need to set the example because we are in the baby business,” she said. “I want to [go] above and beyond in protecting women and giving them the right protection and benefits when they’re having babies.”
Spotlight on lack of protections, flexibility for parents
The Kyte Baby controversy has turned a spotlight on the lack of paid protections for new parents in the United States.
Currently, the U.S. is part of only a small pool of countries worldwide that do not guarantee paid leave.
Just one-quarter of all U.S. workers have access to paid family leave from their employer, according to the Bureau of Labor Statistics.
Under current U.S. policy — the Family and Medical Leave Act — employees who qualify can take time off to care for a newborn or loved one or recover from illness without fear of losing their job, but in many cases the leave is unpaid.
Some commenters on TikTok also raised the issue of a lack of protections for adoptive parents in the U.S., questioning whether the outcome would have been different had the Kyte Baby employee carried her baby.
The backlash against Kyte Baby denying its employee’s request for remote work also comes as working moms continue to rebuild following the coronavirus pandemic, during which approximately 3.5 million moms of school-age children had to leave active work, shift into paid or unpaid leave, lost their job or exited the labor market altogether, according to the U.S. Census Bureau.
While many women had to leave the workforce due to child care issues, the pandemic also highlighted the benefits of remote work, particularly for working moms. Since last year, the participation rate for women in the workforce between the ages of 25 and 54 has been at an all-time high, according to researchers from the Brookings Institution. Researchers attributed that rise, in part, to the increased ability to telework.
Despite those figures, many employers have instituted or continued to push for in-office mandates over the past year, arguing that returning to the office contributes to greater productivity, collaboration and overall workplace culture. Cities themselves say the shift in remote work at some companies has also forced them to reconsider what to do with empty or unfilled office buildings, with some attempting to convert unused space into housing.
Kyte Baby pledges to change its maternity leave policy
While much of the backlash against Kyte Baby focused on the company doing too little, too late, the company was applauded by some for apologizing and course-correcting in wake of the outcry.
“We all make mistakes. The fact that you are owning it and making it right is what matters. Change comes from learning, learning comes from mistakes,” wrote one commenter.
A spokesperson for Kyte Baby told ABC News in a statement Monday that the company is revising its maternity leave policy.
The spokesperson said the employee in question, Marissa, has “declined” the company’s offer to return to her position at Kyte Baby.
“We continue to apologize to both Marissa and our Kyte Baby community for the handling of her maternity leave. Over the last few days our team has been working to make changes to ensure that something like this does not happen again. We are revising our maternity policy to give new parents, both biological and nonbiological, more time off and creating a better process to support our employees,” the spokesperson said.
According to the spokesperson, Marissa worked with Kyte Baby as an on-site employee in the company’s photo studio, and had been with them for “a little over seven months” when she made the remote work request.
“Based on our maternity policy at the time, all parents, whether biological or non-biological, who have worked for the company for at least six months, but less than one year, receive two weeks paid maternity time and are required to sign a contract saying that they will return to their job for six months after their paid leave is complete. Employees with the company over one year receive four weeks paid maternity time and are required to sign a contract saying that they will return to their job for six months after their paid leave is complete,” the spokesperson said.
“Marissa was offered the standard package with two weeks maternity time, but given her son’s situation, was unable to sign the six-month contract. She did propose a remote option for her job that, in the moment, did not work for us since she worked a largely on-site position in our photo studio. We let her know that her job would be here if and when she opted to return. Marissa opted to leave at this point. However, upon reflection we should have taken more steps to accommodate her situation,” the spokesperson said.
“We’ve since realized that Kyte Baby needs to stand by their values of being a woman owned, family company,” they added. “We have reached out to Marissa directly and let her know that her job is here if and when she is ready to come back. We have also offered to work with her on a remote position. At this time Marissa has declined our offer. We are revising our maternity policy by Feb. 1 and will be updating our internal team at that time.”
