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Paid Family Leave Plan: Benefit or Just a Burden?

July 13, 2002

A bill awaiting final action in the state Assembly would make California the first state to provide workers with up to 12 weeks of paid time off to take care of a seriously ill child, spouse, parent or domestic partner or to be with a newborn. Slated to be part of the state disability insurance (SDI) fund, weekly benefits ranging from $50 to $490 would begin in 2004. Unpaid family leave is currently available here and in many other states. KAREN KARLITZ spoke with an opponent and a proponent of the measure, SB 1661.



President, California Chamber

of Commerce:

The workers' compensation program, paid for by employers, is the safety net for workers injured on the job. State disability insurance, funded through employee paycheck deductions, compensates for time off because of injury or illness unrelated to work. Deviating from disability insurance's original purpose, SB 1661 gives employees paid time off for family leave. Half of the program's cost would come from a tax on employers. It doesn't make sense for employers to be responsible for situations that have nothing to do with work.

The cost of funding SB 1661 is pure speculation. We don't know how many people would take advantage of it, and there's no cap on the number of people eligible. It's estimated by Chamber of Commerce staff that every employee would have to pay $102 more in taxes per year. Matching funds would be paid by employers, creating potential new costs for firms considering expansion or relocating here. For smaller employers the problem would be even worse. The existing family leave law exempts companies with 50 or fewer employees because they have less flexibility in moving employees around.

It is irresponsible for the state to create programs that require new taxes when the Legislature is already considering new taxes to fund a $20-billion deficit.

Some of the bill's proponents say it would make for a happier work force, but many employers could not afford to do it. If the public finds this program to be worthy of everyone's support--and it would have to compete with other programs to exist--it makes sense to spread its cost through a government subsidy, a tax credit.



Executive Director, California

Women's Law Center

Los Angeles:

SB 1661 is a very reasonable approach to provide employees with some job/wage protection while caring for a family member. I am certain a large number of workers would benefit by this bill's passage and expect that many people would take advantage of it. My understanding is that it would cost an average of $37 per employee per year, and this cost would be shared with the employer. This estimate was provided by the Employment Development Department. California's state disability insurance program has the resources to support these benefits because of the additional contributions that would be made. SB 1661 would not put the state disability fund at risk.

I understand the concerns of business owners that their costs would rise. What has not been considered is that paid family leave would help to retain workers. The great majority of employees would return to their employers after taking care of their family needs. Of course, companies would have the problem of recruiting temporary and/or part-time workers. But in the long run, it is the responsibility of all businesses to provide innovative ways to retain workers and to be good corporate citizens.

This state has always led the way in innovative business practices and policies.

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