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Legislative Memo

T 518.465.7511
www.bcnys.org

BILL:

S.5791 (Savino)/A.8742 (Silver)

Support

SUBJECT:

Paid family care

 

DATE:

June 10, 2009

 

This bill would provide up to 12 weeks of disability benefit payments through the state's mandatory disability insurance system to non-disabled employees for the purposes of child bonding and caring for ill family members. The Business Council opposes enactment of this legislation:

Alignment with federal Family Medical Leave

We've recommended aligning any state proposal to the federal family medical leave act so the tens of thousands of New York State employers of 50 or more employees would not have multiple tiers of rules, requirements, eligible persons etc. to wade through and deal with. Unfortunately, this bill moves further away from earlier paid family leave proposals in areas such as definition of family, the relationship between this type of family care and an employee's own disability and the issue of job guarantee. Since this is part of the state Temporary Disability Insurance program, hundreds of thousands of small businesses with less than 50 employees who are excluded from the federal family medical leave act requirements would be included in this new mandate.

A major objection to paid family care legislation is that it encourages absence

The cost of replacing those on this new leave would be at overtime rates, borne by the businesses and more than likely as mandatory overtime for other employees called in to fill the vacant positions. This would affect the businesses ability to meet its customers' needs and therefore affect their ability to operate efficiently. The result will be increased personnel costs through overtime and diminished morale for those who pick up the slack from these additional absences. At this time of economic turmoil, government should be taking action to encourage productivity and efficiency, not encouraging absenteeism.

Increased benefits and use brings higher costs

Increasing the maximum disability benefit payment and providing for broader use of disability benefits beyond their original intention will increase use of the benefit and, as a simple economic issue, increase costs for everyone's disability insurance.

This bill more than doubles the maximum disability benefit payment from the current $170 per week to 35% of the state's average weekly wage (AWW) on 1/1/10, 40% of the AWW on 4/1/11, 45% of the AWW on 4/1/12 and 50% of the AWW on 4/1/13 and thereafter forever indexed. The federal Bureau of Labor Statistics puts the NYS average weekly wage in 2008 at $1040 per week. Using that number, the maximum disability benefit payment would rise to $364/wk. on January 1st., then $416/wk, $468/wk. and $520/wk by 2013. Of course, as the actual state average weekly wage rises over the years, these maximum disability payments would be higher than the above projections.

This is a recipe for significant increases in the cost of creating and retaining jobs in New York State. Even with increased employee contributions, paid family leave legislative mandates would be another state government policy barrier contributing to our state's uncompetitive business position.

Another posting requirement

Currently, employers are required to post a notice containing information about their disability insurance company, policy number and dates of coverage. Now, new language would require employers to also do an additional communication to employees stating that they have paid for their disability insurance coverage, plus repeat the communication to all new employees within 30 days of their start date. This would be in addition to the dozen plus workplace postings already required by New York State businesses.

For these reasons, The Business Council opposes this legislation and respectfully urges that it not be enacted.