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Legislative Memo

Frank Kerbein
Director, Center for Human Resources
T 518.465.7511
www.bcnys.org

BILL:

A.1793-B (Nolan)

Support

SUBJECT:

Mandated Paid Family Leave

 

DATE:

March 3, 2014

 

This bill would mandate time off for employees and 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 continuous or intermittent child bonding and caring for ill family members. The Business Council opposes enactment of this legislation:

Interferes with the employee/employer relationship
This bill places the state government in the role of dictating terms and conditions of employment for private sector employees.

Employers are best suited for determining terms and conditions of employment with their employees or employee representatives based on their industry, geographic location, size, financial condition and competitive position.

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.

First, this bill would increase the benefit formula from 50% of the employee's average weekly wage to 662/3% of the employee's average weekly wage.

Then, the maximum weekly benefit payable would rise to 35% of the state's average weekly wage (AWW) on 1/1/15, 40% of the AWW on 4/1/16, 45% of the AWW on 4/1/17 and 50% of the AWW on 4/1/18. Based on these new percentages, the maximum benefit payable would quadruple from the current $170/wk to almost $700/wk in just over 3 years. This is a recipe for significant increases in the cost of creating and retaining jobs in New York State.

Even with increased employee contributions for the new family care component, the disability side of the costs associated with these benefit increases would be absorbed by employers. This would be yet another state government policy barrier contributing to our state's uncompetitive business position.

Alignment with federal Family Medical Leave
If this state proposal was aligned to the federal family medical leave act, hundreds of thousands of New York State small businesses would not have multiple tiers of rules, requirements, eligible persons etc. to wade through and deal with. Unfortunately, this bill does not mirror the federal law 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 currently excluded from the federal family medical leave act would be included in this new state leave mandate.

A major objection to paid family care legislation is replacement costs
The cost of replacing those on this new leave, especially unplanned intermittent 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. State government should be taking action to encourage productivity and efficiency, not discouraging it via new government mandates.

Another posting requirement
Currently, employers are required to post a notice containing information about their disability insurance company, policy number and dates of coverage. New language in this bill 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. This is unnecessary and waste of resources.

The message to New York businesses
As we work toward improvement of the state's economy the Legislature needs to send loud and clear positive messages to businesses in and out of the state that new York is open for business. Enactment of this bill sends no such message. In fact, it sends the all too familiar message that the New York State Legislature stands ready to find new and different ways to interfere with business and worsen the business climate.
For these reasons, The Business Council opposes this legislation and respectfully urges that it not be enacted.