In a budget year dominated by concerns about funding basic education, paid family leave looks like an unlikely budget priority. But, as they say, it’s back.
The Associated Press reports and provides a useful reminder of how things reached this pass.
A decade ago, Washington state created a paid family leave program that required many employers to offer five weeks of paid time off for new parents. But the law that once offered hope to working parents quickly turned into an empty promise because state lawmakers never came up with a way to pay for the benefit, resulting in an indefinite delay of its implementation.
That’s right. It was adopted as an unfunded promise, a promise long unrealized. The AP story continues,
Now lawmakers from the state where companies like Microsoft and Amazon already offer the benefit to their workers are gearing up to consider a host of bills in a bid to replace the dormant law with one that gives more time off for new parents and people who need to care for sick relatives — plus a higher weekly benefit than originally envisioned and a steady funding stream. Legislative hearings on the various proposals start Thursday.
As the AP reports, should lawmakers find a way to fund it, Washington would be one of five states to offer the benefit.
The Washington Research Council provides a nice side-by-side of two bills introduced this session. For a comprehensive look at legislative efforts to mandate benefits, see this WRC report.
In our 2015 policy brief we wrote that only a limited number of studies have been done on the impacts of paid sick leave mandates (which are a relatively new phenomenon). Moreover, those that do exist “were conducted by supporters or opponents of the mandates, and they are often simply surveys of employers and employees” (WRC 2015b). Still, they show that paid sick leave mandates are not costless. No new studies have been released since then.
It is important to remember that em- ployee compensation does not consist only of wages—benefits and working conditions are also important compo- nents. An employer may offer a mix of wages, health insurance, leave, scholar- ships, flexibility, etc. as compensation. In the absence of government intervention, that mix will reflect the preferences of both the employer and employee. Be- cause the mix will differ from employer to employer, prospective employees can shop around for the mix that best suits them.
But when the government mandates specific benefits or working conditions, the optimal mix for a given employee may no longer exist. As Lawrence Sum- mers has written, benefits mandates re- sult in lower wages (Summers 1989). Be- cause of the minimum wage, employers may have to respond by reducing non- mandated benefits. A paid leave man- date might result in the cancellation of a scholarship program, for example. Many employees may not like that tradeoff.
In The Lens, Mike Richards looks at the upcoming legislative battle.
Employees in Washington state could claim up to 38 weeks of paid family and sick leave under companion bills introduced in the House and Senate last week, HB 1116 and SB 5032. The bills zero in on implementing leave provisions above and beyond those in 2007 framework legislation, and in Initiative 1433 approved by voters last November. Supporters say the legislation would provide warranted support for families in times of need, while opponents say costs to employers would be prohibitive…
Of the 38-week leave ceiling in the 2017 bills, State Rep. Matt Manweller (R-13) said, “That’s a half a year of not going to work and getting paid…standard businesses cannot afford to pay an employee for half a year to not come to work. They also have to pay for a replacement worker.”
Erin Shannon, Director of the Center for Small Business at the Washington Policy Center, recently wrote, “Workers could apply for both benefits in the same year, meaning they could receive 38 weeks of paid leave in one year. Employees would be eligible for the paid leave upon working just 340 hours…an average of 6.5 hours per week.”
An unlikely 2017 legislative priority.