|
|||
|
|
|
||||||
|
Mandating Employee Leave
Experts say the Healthy Families Act is unhealthy for employers. Even though healthcare reform and executive-comp legislation may be making the headlines, employer groups remain concerned about the potential paid-time-off mandate.
Reform of the nation's ailing healthcare system remains the big dog in Washington, for now, but that doesn't mean there aren't other issues waiting in the wings to nip at employers. For employers, one of the more troubling pieces of legislation is H.R. 2460, also known as the "Healthy Families Act." In essence, the bill would mandate that employers with 15 or more employees provide paid family leave, with time accumulating virtually on the first day. The bill makes no distinction between part-time and full-time employees. Experts and employers' associations don't appear to dispute the value of offering paid time off to qualified employees. But, while some acknowledge the good idea behind the legislation, they say the road to chaos is paved with such intentions. "I think probably the initial response you get is, we're in a very, very troubled economic climate right now," says Dan Yager, senior vice president and general counsel for HR Policy Association. "It's not going to help the recovery. It's not going to help long-term job growth. It's very, very counterproductive." The Washington-based association, which represents 270 of the country's largest companies, testified before the House Education and Labor Subcommittee on Workforce Protections on June 11. The organizations that testified cited figures that show most employers already offer paid time off, that mandates between the HFA and the Family Medical Leave Act overlap, that the proposed legislation is inflexible -- and ignores industry sectors and workforce makeup, such as a union, non-union or mixed workforce. If the legislation passes, they say, it will be a horse pill that will choke many employers as they struggle to be compliant. "We believe that paid sick leave is really important for employees, and we want employers to provide that leave. But the one-size-fits-all approach, we just do not believe that is the right answer," says Lisa Horn, manager of healthcare in the public affairs department of the Society for Human Resource Management. The Alexandria, Va.-based organization also testified during the June 11 hearing. "We just have a different approach to getting to that goal [of paid leave], and that is what we rolled out with our 21st century workplace-flexibility policy," says Horn. That SHRM policy emphasizes the importance of offering paid time off for employees without requiring employers to adhere to potentially conflicting federal, state and sometimes local leave requirements, says Horn. "The whole coordination issue is something that our members report is a significant challenge already," she says. Yager says the HFA brings forth memories of the administrative headaches that resulted with organizations seeking to be compliant with the FMLA 16 years ago. "There [were] a lot of issues that erupted," he says. "I don't think big employers ever had a problem with the notion of family and medical leave being available to employees who genuinely need it. I think the concern is the way the system winds up being gamed." Yager says employees may end up perceiving HFA as a benefit that they are required to "use or lose," regardless of whether the time is actually needed. Mike Peterson, associate general counsel and director of labor and employment policy for the HR Policy Association, says employers should also be concerned about the proposed bill's enforcement provisions. As currently written, there may be "significant litigation costs for a simple dispute over a couple of days (or hours) of paid sick leave," according to a memo Peterson sent to the organization's members. Because the HFA provides paid time off for every employee -- full- and part-time -- it expands the potential for employee lawsuits. And lawsuits are costly, he says. "Even just bringing the lawsuit, you're looking at $15,000 to $25,000 each, getting the lawsuit going and defending it from an employer's standpoint," says Peterson. Rather than burden companies with the prospect of costly litigation, the association recommends legislators remedy complaints in a fashion similar to way the U.S. Department of Labor handles unemployment-insurance claims. "Keep it on the federal track," says Peterson. "Frankly, one of the reasons we believe that it should definitely be considered is because, with the Healthy Families Act, we're only dealing with a maximum of 56 hours of paid leave." The Center for Economic and Policy Research, based in Washington, disputes any contentions that paid leave policies would contribute to job losses in the United States or have a detrimental effect on economic development. "Guaranteeing paid sick days does not put countries at a competitive disadvantage," says John Schmitt, a senior economist at CEPR and co-author of the report, Paid Sick Days Don't Cause Unemployment. The report studied the national rate of unemployment in 22 highly developed countries. In fact, another report co-author, Dr. Jody Heymann, director of the Institute for Health and Social Policy and professor of epidemiology at McGill University in Montreal, says paid leave could pay off economically by preventing the spread of contagious diseases, such as a serious flu outbreak. Lenny Sanicola, practice leader for employee benefits for WorldatWork, the Scottsdale, Ariz.-based HR membership association, says his organization has been tracking HFA and what it means for employers, but he doesn't expect the bill to eclipse national healthcare or executive-compensation legislation in the near future. "Even if we were in better economic times, and healthcare was still at the forefront, I still think this would take a backseat," he says. Nevertheless, he says, some employers among the association's 25,000-members have expressed concern about how HFA would dovetail -- if, at all -- with paid-time-off banks or other paid leave benefits already offered. They also worry about the logistics of complying with yet another set of regulations that are currently too vague to distinguish. "If an employee takes sick leave under the Healthy Families Act, is that counted as FMLA leave or is that something totally different," he asks. Another concern he hears from members is the toll such legislation will take on existing benefits. In addition to the fact that most employers already offer such leave, additional benefits may span health insurance, 401(k) plans and other policies to attract and engage employees and maintain competitiveness. Accommodating the HFA may drain resources that would be directed to such reward and retention programs. Horn agrees that the perceived benefits of HFA could represent a drain on existing benefits. "There's only a finite total compensation package available, and [employers] are just going to have to shuffle around the deck and make changes elsewhere," she says. "If you throw this mandate on [employers], they're going to have to absorb that cost somewhere, and they're going to have to scale back somewhere."
July 6, 2009 Copyright 2009© LRP Publications |
||||||
Print
Email
Write to the Editor
Reprints
|
||||
|
||||
|
||||
|
© Copyright 2010 LRP Publications. All rights reserved.
|
||||