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June 5, 2007

Council: 'Paid family leave' proposals would burden New York businesses

Proposals to require employers to offer paid family leave would increase New York's already high job-creation costs, the Council told lawmakers during a Senate Labor Committee Hearing.

In June 5 legislative testimony, Tom Minnick, the Council's specialist in labor policy, told state legislators that the Council opposes any proposals to require employers to offer paid family leave, especially if they would use the state's employer-funded disability system to give paid benefits to employees who are not disabled.

“Paid family leave legislative mandates would be another state government policy barrier contributing to our state's uncompetitive business position,” Minnick testified.

"New York already struggles with job-creation costs and mandates that are among the nation's highest," Minnick testified. "These high costs and mandates are the main reasons why New York's long-term job-growth is so weak relative to the nation's and even to similar, competitor states."

A new mandate that imposed new costs, created new administrative hassles, or both, would worsen these problems, he said.

"A major objection to paid family leave legislation is that it encourages absence. This is not a role that government should play. The cost of filling in for those missing would be at overtime rates, borne by business and more than likely as mandatory overtime for other employees, borne by those other employees who are called in to fill the vacant positions," he said.

In fact, many New York State employers already provide paid family leave and incur substantial expenses doing so, Minnick said.

“Proposals like these assume the worst by employers and seem to take the theme that state government needs to impose paid time off because employers do not provide it,” Minnick said. “Paid time off is already a major employer expense and plays a significant role in an employer's competitive position in attracting and retaining high quality personnel in the job market.”

Information from the Compensation Data 2006 New York survey, an annual survey sponsored by The Business Council and Compdata Surveys of Kansas City, shows that New York employers in all industries average 12.6 paid time off days in the first year of employment growing to 27.9 paid time off days for employees with over 30 years of service, Minnick said.

“These paid time off averages show the generous provisions already made by New York employers in providing pay for significant blocks of time spent off the job, all in response to the competitive marketplace,” Minnick added.

The Council is grateful to Governor Spitzer for attempting to alleviate additional costs businesses would face under mandatory paid family leave, Minnick said.

"It is important to recognize that the Spitzer administration reached out to the business community, including The Business Council, in an effort to lessen the hardships for employers inherent in proposals like these," Minnick testified.