California: Paid leave bill to test Legislature. Business calls it a job killer

Oakland Tribune ^ | July 29, 2002

[John Jorsett]

First of two articles

SACRAMENTO -- In perhaps the most emotional clash of the waning 2002 legislative session, unions and businesses are marshalling forces for an all-out, monthlong slugfest starting next week over making California the first state to grant most workers paid leave from their jobs to care for ill family members or new children.

Labor unions are calling the proposal, which advanced swiftly before lawmakers' summer lull, a blessing for working families. But big and small businesses alike, surprised by the measure and its progress, are now attacking it as a costly "job killer" in an already ailing economy.

The cost of the paid-leave program for births or family illness is estimated at anywhere from hundreds of millions to billions of dollars annually and would be shared by employers and workers. The program would provide about half an employee's wages for about three months.

The bill cleared its first committee hurdle in the Assembly after narrowly winning the approval last month of the Senate before it recessed for the summer. Both houses officially reconvene Aug. 5 for the final four weeks of their annual legislative session.

The measure poses an election-year dilemma for the Democrats who dominate the Legislature, and for Democratic Gov. Gray Davis, who hasn't

taken a position on the bill, but would ultimately determine the fate of the proposal if lawmakers pass it.

Like the more moderate among the Democratic legislators, Davis has tried to please both labor and corporate leaders. He is running for a second term against Republican businessman Bill Simon of Los Angeles.

State and federal laws already authorize leave -- with no pay -- for employees to take care of family members. But under the paid-leave proposal, the State Disability Insurance program would partially replace wages for up to 12 weeks of "temporary family disability."

The specifics are laid out in SB1661 by Sen. Sheila Kuehl, D-Santa Monica, a bill that has draw emotional support from unions and advocates for the families and for the working poor.

"Paid leave is critically important to California workers," says Netsy Firestein of the Labor Project for Working Families, a nonprofit group based in Berkeley.

"No one should have to choose between caring for a child, or seriously ill family member, and a paycheck," Firestein says. "California law already recognizes the importance of family medical leave, but most workers cannot afford to take unpaid leave when their families need them most."

Moreover, supporters say, the need for paid family leave is increasing in the United States, which is one of only a few nations in the world -- along with Australia and Ethiopia -- that do not provide national paid family leave.

Under the proposal, employees could take paid leave to care for any seriously ill or injured family member -- such as a spouse, parent or domestic partner -- beginning in 2004. They also would have a right to disability pay following the birth or adoption of a child, as well as after taking in a foster-care youth.

Workers providing proof of their need for leave would receive 55 percent of their wages, up to a current maximum of $490 a week. The maximum payment would increase each year based on inflation.

The majority of the state's work force -- about 13 million Californians employed by private firms of all sizes -- would be eligible to participate in the program that would become part of the State Disability Insurance system.

Most government workers, however, would not be eligible. Their disability benefits are provided through a taxpayer-funded alternative to the SDI, which is funded by mandatory deductions from workers' paychecks.

In the private sector, workers and employers would divide the cost of the paid-leave program but there are wildly varying estimates of the price tag.

Supporters figure the cost would be about $50 annually per employee, for a total of roughly $650 million a year. And much of the cost to businesses would be offset by the decreased turnover of workers, according to proponents.

But the California Chamber of Commerce believes the toll would hit a crippling $2.5 billion a year. Differing state estimates fall between those of supporters and foes.

"It is unwise to burden California employers and workers with new taxes when the economy is still shaky," says Julianne Broyles, a spokeswoman for the Chamber of Commerce, which represents many of California's largest corporations.

"The added cost of this mandated paid family leave program, plus the recently increased workers' compensation benefit levels, will place new strains on the nearly bankrupt SDI trust fund, which will mean even more SDI tax increases in the future," Broyles says.

Small businesses, which employ six of every 10 working Californians, say it would have the most impact on them.

"If it becomes law, it will be the biggest financial burden for small businesses in decades, coming at a time when the state's economy is the most precarious it has been in a quarter of a century and when Main Street firms are least able to afford it," says Martyn Hopper of the National Federation of Independent Business.

The business sector, now gearing up to defeat the bill, concedes it was largely surprised by the measure and its rapid advancement.

"It was not on our radar," says Steven Gottlieb, a spokesman for the Bay Area Council, a business group.

The bill passed swiftly through initial committees and won approval on a 21-15 vote in the Senate last month, barely gaining the simple-majority margin needed in the 40-member upper house. One Democrat, Sen. Jim Costa of Fresno, joined with GOP members in opposing the plan but it was supported by the Bay Area's liberal senators.

After failing to gain universal support among the Democrats who control the Senate, analysts say the bill is likely to divide the moderate, pro-business and liberal Democrats who together control the Assembly.

The measure last month passed the Assembly Insurance Committee, largely along party lines.

The swift progress of the bill represents a major victory for organized labor, which has fought for a paid family leave law for years but was thwarted by former Republican Govs. Pete Wilson and George Deukmejian.

This time around, the measure has garnered an impressive array of groups supporting it -- and those in opposition.

Supporters include the California Labor Federation, the National Organization for Women, the California Catholic Conference, the Congress of California Seniors, the California Medical Association and Planned Parenthood Affiliates of California.

Among foes are the state's Association of Health Facilities, Farm Bureau Federation, Restaurant Association, Taxpayers Association, Retailers Association and Milk Producers Council.

The family leave bill is pending before the Assembly Appropriations Committee.

It could advance to the full Assembly early in August. But with major controversy surrounding it and lawmakers rushing to deal with hundreds of bills by Aug. 31, its fate is more likely to be determined amid the usual 11th-hour, end-of-session legislative chaos.

TUESDAY: A look at the array of pending bills

[John Jorsett]

Business calls it a job killer

Sounds like a sure-fire thing, then. Nothing the California legislature likes better than to punish business.

[John Jorsett]

FYI

[frmrda]

You know who saw this coming years ago?

Rush Limbaugh.

When the Family and Medical Leave Act was being debated and signed he said something to the effect of "Just wait, they're not going to stop here, next is going to be getting paid not to work". Sure enough, sadly, his words turned out to be prophetic.

[Weimdog]

"The added cost of this mandated paid family leave program, plus the recently increased workers' compensation benefit levels, will place new strains on the nearly bankrupt SDI trust fund, which will mean even more SDI tax increases in the future," Broyles says.

DEMOCRATS = HIGHER TAXES.

[IronJack]

Labor unions are calling the proposal ... a blessing for working families.

Labor unions would call any pay-for-nothing proposal a blessing. That is their job, to ensure that businesses "employ" people who don't have to produce anything. That's what makes labor unions perfect communist front organizations. They are avowed enemies of capitalism, at least ideologically. In practice, they are usually just racketeers, the worst kind of capitalists.

[skeeter]

California politicians killing the goose that laid the golden egg. They're already driving businesses out like its going out of style.

I can't wait until the well dries up completely & the leaches our state tax dollars support have to get real jobs. The hard times that will surely follow'll be worth it.

[A Ruckus of Dogs]

"No one should have to choose between caring for a child, or seriously ill family member, and a paycheck," Firestein says.

I can't believe people think they ought to be paid for taking care of their kids or family.

[A Ruckus of Dogs]

California politicians killing the goose that laid the golden egg. They're already driving businesses out like its going out of style.

Blame the voters who put them in power.

[Southack]

Interestingly enough, the larger trend in business is to pay for performance now.

Contractors get brought in to work sites, are paid only for the hours that they work, and are cut when they cease producing (in theory).

Artists and programmers are frequently contracted to create a product while they work their own hours at home, and they are paid only for their final product.

Laws such as this one in California will only serve to accelerate this trend.

Why take on the growing burden of a new "employee" when one can pay a fixed amount of money for a final end-product, after all?!

Thus, labor unions will see their membership numbers suffer as businesses find alternative ways (instead of using employees) to obtain their desired results.

Home-owners are already doing this. Who among us pays a plumber for the time that he spends caring for his family? No, we only pay him to fix our plumbing. We aren't going to pay for his time away from our home.

Likewise, businesses are going to find ways to not pay for the time that emplyees spend at home, even if that means no longer hiring employees but rather using contractors and other outsourcing methods.

[chit*chat]

This could be a boon to older workers who would now have value as reliable workers. Bet the birth rate increases in states that pass this legislation.

Yes, Rush said it first, but it was a no brainer for thinking individuals, don't you think?

[skeeter]

Blame the voters who put them in power.

You must be referring to state employees & unions, "minority oppressed" and welfare queens which constitute the majority of the Democratic base here in CA.

Sure I blame them. Thats why it will be so sweet to watch them as their lifes blood - state tax receipts - are cut off.

[Dog Gone]

California, the land of the Free Lunch. Just pass a law, and like magic, you have abundant, clean, renewable energy. Just pass a law, and vehicles quit emitting any exhaust. Just pass a law, and your employer will pay you for months even when you don't show up for work.

There are no negative consequences to any of this, because the intentions of the lawmakers are good.

[45Auto]

Blame the voters who put them in power

The voters who put them in power are the same dipsticks who live on welfare, disability, social security, various government "subsidies", drug money and those illegal aliens who vote. The California DemonRAT Party, which currently holds a large majority in the legislature and the governor's office, is bound and determined to, once again, put the bankrupt philosophy of Karl Marx into practice on a grand scale. And the results, once again, will be a disaster. Its already happening: the rotten commie governor in the first two years of his "reign" turned a $10 billion surplus into a $30 billion deficit. Now, the bastards are arguing over how big the tax increase will be.

[GaltMeister]

It seems like the liberal states - especially KommieFornia - are rapidly reaching the point where they have more tax consumers (moochers) than they have taxpayers (producers).

That is an unsustainable situation, and it won't be pretty when it crashes down on their heads.

[Publius6961]

I can't believe people think they ought to be paid for taking care of their kids or family.

Why not?

If the leeches who are always among us can make it work, why not?

The ever present dark side of human nature: maximum benefit with minimum effort.

Used to be called saving for a rainy day.
Now it is institutionalized compassion, at everyone else's expense.
Catered to, nurtured and encouraged by all political parties.

[RJayneJ]

Thanks for the heads up! };^D)

[Ernest_at_the_Beach]

calgov2002:

calgov2002: for old calgov2002 articles. 

calgov2002: for new calgov2002 articles. 

Other Bump Lists at: Free Republic Bump List Register

[Gophack]

If the Legislature REALLY wanted to help families, they would cut taxes or provide an incentive so that moms (or dads) can stay home with their kids. The sad fact is that many moms work because they have to help pay the bills, not because they "want" to.

[Lancey Howard]

California - - LOFL!!!
What a sewer.

[cartoonistx]

I can't believe people think they ought to be paid for taking care of their kids or family.
Does the term Welfare ring a bell?