Don’t re­peal and re­place D.C.’s leave law


Em­ploy­ers should be pleased with the D.C. paid family and med­i­cal leave plan. In­stead, they are try­ing to un­der­mine it. Busi­ness lob­by­ists are push­ing a “re­place­ment” that gets rid of the best parts of the plan and places heavy bur­dens on the very em­ploy­ers they pre­sum­ably are try­ing to help.

In re­sponse to broad pub­lic sup­port among busi­ness own­ers and res­i­dents for paid family and med­i­cal leave, the D.C. Coun­cil passed leg­is­la­tion in De­cem­ber to en­sure that no pri­vate-sec­tor D.C. em­ployee would have to choose be­tween a pay­check and pro­vid­ing nec­es­sary care for them­selves or their fam­i­lies. The Uni­ver­sal Paid Leave Act be­came law on April 7, with ben­e­fits be­gin­ning in 2020. The busi­ness lobby, pri­mar­ily rep­re­sent­ing very large em­ploy­ers, ob­jected to this law be­fore it passed. Now it is try­ing to gut it.

Op­po­si­tion to paid leave leg­is­la­tion by busi­ness lob­by­ists is not new, and nei­ther are the ob­jec­tions they raise. Prior to the pas­sage of Cal­i­for­nia’s first-in-the-na­tion paid family leave law nearly 15 years ago, the busi­ness lobby strongly de­nounced the mea­sure, claim­ing it would be a great bur­den for em­ploy­ers (es­pe­cially small busi­nesses), lead to abuse by work­ers and cause eco­nomic harm as a job killer. The same ob­jec­tions are raised to­day here, but ex­pe­ri­ence with paid leave in Cal­i­for­nia, New Jersey and Rhode Is­land re­futes these false claims.

Five years into the Cal­i­for­nia pro­gram, Ruth Milk­man and I car­ried out re­search on em­ploy­ers’ ex­pe­ri­ences with that state’s paid family leave law that found vir­tu­ally no abuse by work­ers and min­i­mal im­pact on busi­ness op­er­a­tions and, thus, no rea­son to re­duce em­ploy­ment. Even bet­ter, the data showed that the pro­gram saved money for busi­nesses, pri­mar­ily through re­duced turnover, with even more sav­ings for com­pa­nies with gen­er­ous paid leave ben­e­fits via co­or­di­na­tion with the state’s pro­gram. Nearly 89 per­cent of Cal­i­for­nia em­ploy­ers, in­clud­ing those with fewer than 50 em­ploy­ees, re­ported no ef­fect or a pos­i­tive ef­fect on pro­duc­tiv­ity, and 91 per­cent re­ported no ef­fect or a pos­i­tive ef­fect on prof­itabil­ity or per­for­mance. The Dis­trict’s pro­gram is mod­eled on Cal­i­for­nia’s.

The D.C. pro­gram cre­ates a fair sys­tem for the Dis­trict’s pri­vate-sec­tor em­ploy­ees and busi­nesses, set­ting a ba­sic stan­dard that lev­els the play­ing field for the small- and medium-sized com­pa­nies that make up 99 per­cent of Dis­trict em­ploy­ers. Ev­ery em­ployer pays a mod­est tax into one fund that, in turn, pays out ben­e­fits when an em­ployee needs leave. In con­trast, the busi­ness lobby and large em­ploy­ers want to re­quire each com­pany to pay their own em­ploy­ees’ family and med­i­cal leaves. These out-of-pocket ex­penses might be vi­able for very large em­ploy­ers, but they would im­pose crush­ing costs and ad­min­is­tra­tive bur­dens on small- and medium-size com­pa­nies.

Em­ploy­ers would need to set up in­di­vid­ual in­sur­ance funds that were ac­tu­ar­i­ally sound and could cover the cost of their em­ploy­ees’ leaves. While em­ploy­ers’ con­tri­bu­tions to cover the cost of leaves is rel­a­tively low when spread over D.C.’s en­tire pri­vate-sec­tor work­force through a so­cial in­sur­ance fund, they loom large when in­di­vid­ual em­ploy­ers must cover the costs of paid leaves for their own em­ploy­ees. The costs to cover these leaves are likely to be eco­nom­i­cally dam­ag­ing for all but the largest em­ploy­ers. Re­quir­ing em­ploy­ers with 50 or even 100 em­ploy­ees to cover the costs of their own em­ploy­ees’ leaves di­rectly, or to buy equiv­a­lent pri­vate in­sur­ance if such an in­sur­ance prod­uct be­comes avail­able, would sad­dle many of them with un­re­al­is­tic fi­nan­cial bur­dens.

When em­ploy­ers cover the costs of paid leaves for their own work­ers, these em­ploy­ees must file ben­e­fit claims with their em­ployer rather than a gov­ern­ment agency. This places new, large ad­min­is­tra­tive re­quire­ments and cost bur­dens on em­ploy­ers, some­thing most would pre­fer to avoid. Un­der the busi­ness lobby’s pro­posal, em­ploy­ees are el­i­gi­ble for paid leave based not on their ten­ure with their cur­rent em­ployer but based on past work ex­pe­ri­ence. That means an em­ployee could get in a car ac­ci­dent in their first week of a new job and their new em­ployer would be re­quired to re­view their em­ploy­ment his­tory, as­cer­tain their el­i­gi­bil­ity for paid leave, and then pay the full costs of the leave.

The cur­rent law, which cov­ers all pri­vate-sec­tor D.C. work­ers through a so­cial in­sur­ance fund ad­min­is­tered by a gov­ern­ment agency, is less costly for most em­ploy­ers, re­lieves busi­nesses of the book­keep­ing bur­den and added costs of ad­min­is­ter­ing the ben­e­fit, stream­lines com­pli­ance and elim­i­nates mon­i­tor­ing by en­force­ment agen­cies. It cre­ates a ba­sic stan­dard for paid leave that em­ploy­ers of all sizes can meet or ex­ceed and pro­vides a fair paid leave pro­gram for em­ploy­ees.

The Dis­trict’s Uni­ver­sal Paid Leave Act is the best deal for em­ploy­ers, es­pe­cially small- and medi­um­size com­pa­nies. If the D.C. Coun­cil cares about lo­cal busi­ness in­ter­ests, it should re­ject ef­forts to re­peal and re­place it.

Eileen Appelbaum is se­nior econ­o­mist at the Cen­ter for Eco­nomic and Pol­icy Re­search and co-au­thor of “Un­fin­ished Busi­ness: Paid Family Leave in Cal­i­for­nia and the Fu­ture of U.S. Work-Family Pol­icy.”


Sup­port­ers of paid family leave at­tend a D.C. Coun­cil hear­ing in 2015.

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