State Says Few Workers Would Use Paid Family Leave

NJBIZ, Dec 3, 2007 by Goldstein, Scott

STATEHOUSE

Controversial bill to get Assembly committee hearing

If the state's proposed paid family leave program becomes a reality, nearly one out of every 100 eligible workers in New lersey-about 35,600 people-would annually use it, taking an average of nine weeks per leave, according to a state analysis.

The controversial program, which has already passed two Senate committees and is headed to a vote in the full Senate, is expected to get a hearing in the Assembly Labor Committee as soon as this Thursday.

"This is a cutting-edge issue that defines how well this state will react to the new realities of the workplace," said Ion Shure, president of New Jersey Policy Perspective, a group that supports paid family leave.

The bill, as it is now crafted, would give public and private workers in New Jersey 10 weeks of paid leave to care for newborns, adopted children or sick members of their immediate family. Workers would get two-thirds pay, up to $488 per week. Currently, employers are required to allow 12 weeks of leave, but it is unpaid and companies with fewer than 50 employees are exempt.

The bill is getting support from a large coalition of organizations, including labor unions, pro family groups and AARP, formerly known as the American Association of Retired Persons. The cost of the program would not be covered by employers. Instead, workers would fund it by paying about an extra $ 1 a week more into the existing state Temporary Disability Insurance fund through payroll deductions.

Still, business lobbyists-expecting more workers to take leave if they get paid-are bitterly opposing the bill. "You can't just take employees away for almost three months at a time and expect positive results," said Philip Kirschner, president of the New Jersey Business & Industry Association.

Gregory Williams, an aide in the nonpartisan Office of Legislative Services who helped craft the bill, said less than 1 percent of workers are expected to use the paid leave and most of them will be employees at companies with 50 or more workers.

The state's fiscal analysis for the program is based partly on the data from the first three years of the California paid family leave program. "California found that employees at small companies were half as likely to use the benefit, perhaps because it was less likely that their jobs would be saved for them," Williams said.

California offers six weeks of leave at 55 percent of the worker's pay with a cap of $840 per week. Washington state recently adopted a program that offers five weeks of leave with pay of no more than $250 per week. New York and Massachusetts are considering paid family leave bills, according to Shure.

Of the 35,600 people expected to utilize the program, 30,200 of them would be men and women taking the family leave to care for newborn or adopted children, while 5,400 workers would use it to care for sick family members, according to the state's analysis.

The analysis assumes workers will use nine paid weeks per leave. But Williams, citing statistics from California and insurance-based organizations, said those who need to care for sick family members will likely use much less time. The law's authors may have inflated the anticipated length of each leave so the state would not come close to running out of money to fund the program, he says.

The state expects the payroll deductions to raise $153 million per year-based on the current number of workers-and the program to pay $137 million in benefits. It will cost the state $11 million in administrative costs, according to fiscal estimates.

Only the 3.9 million workers whose paychecks contain deductions for temporary disability insurance would qualify for the program.

Based on the California data, companies with exactly 50 employees will have on average one employee take leave every five years; a 20-employee company will have one worker take leave every 12 years; and a company with less than five workers would see a worker take leave once every 300 years, said Eileen Appelbaum, director of the Center for Women and Work at Rutgers University.

Sponsors of the legislation say there are employer-friendly stipulations in the bill that prevent workers from abusing paid leave, such as requiring them first to exhaust up to two weeks of available vacation or sick leave. And, unlike the current law, the bill does not require companies to reserve jobs for those who take paid leave.

"It's not the 1950s anymore," said Shure of New Jersey Policy Perspective. "More people are working. It's increasingly difficult for people to balance jobs and family. They are working longer hours. And people need help to tend to families."

If the bill passes both houses and is signed by the governor before the legislative session ends in early January, the paid family leave program would begin Jan. 1,2009.

Last month, Assembly Speaker Joseph Roberts Jr. (D-Camden) gave the program his strongest endorsement. "I support paid family leave and I believe that it is destined to become law in New Jersey," Roberts said. "Our challenge right now is to try to find the middle ground on this issue, particularly with respect to its impact on small businesses."