Capitol Hill

After significantly expanding their majorities in the House and Senate during the 2008 elections and further energized by President Obama's high approval ratings, congressional Democrats are pursuing an ambitious legislative agenda.

Although health care reform and climate change legislation are Democrats' top priorities, another initiative is emerging that appears to be key in their plans to change the U.S. workplace—the Healthy Families Act (HFA). This legislation would impose a new paid leave mandate on most employers and drastically change how employers deliver benefits to employees.

The HFA

The HFA was introduced in the Senate by Sen. Edward Kennedy (D-Mass.) and in the House by Rep. Rosa DeLauro (D-Conn.) with numerous Democratic co-sponsors. Supporters believe a federal paid leave mandate is necessary because, as Rep. Lynn Woolsey (D-Calif.) said during a recent hearing regarding the bill, "workers should not have to choose between their jobs or their families" when dealing with illnesses. So far, no Republicans have co-sponsored the legislation.

The HFA would require all employers with 15 or more employees to provide 56 hours—or seven days—of paid sick leave annually to all full-time and some part-time employees. Employees would begin accruing paid sick leave their first day on the job at a rate of one hour of paid sick leave for every 30 hours worked and may begin taking accrued leave as soon as 60 days thereafter. The HFA goes well beyond the existing Family and Medical Leave Act, which requires employers with 50 or more employees to provide them with up to 12 weeks of unpaid leave for certain medical and family-related purposes.

Under the HFA, employees could use paid sick leave for their own medical needs or those of a family member or relative; "relative" is defined as anyone who is directly related to the employee or has the "equivalent of a family relationship." The HFA also would mandate that employers allow employees to take leave by the hour without requiring employees to notify their employers in certain circumstances.

If passed, the HFA would require employers who already offer some type of paid leave benefit to conform the existing benefit exactly to the HFA's terms. If the employer fails to do so, any existing paid leave benefits that do not adhere strictly to the HFA-specified format only can be provided in addition to the HFA's terms.

Concerns

NRCA strongly believes imposing a one-size-fits-all mandate for paid sick benefits—as the HFA would do—would severely limit employers' flexibility in designing benefits packages that meet their employees' needs. Such a mandate would harm employees by forcing some employers to reduce employees' wages or other benefits to offset the costs of complying with the paid leave mandate.

NRCA recently joined other business associations to send a letter to key Congress members outlining HFA-related concerns. The letter notes that employers "understand that employees need time off to address personal or family health issues," which is why "83 percent of private sector employees now have access to paid illness leave," according to the U.S. Bureau of Labor Statistics. It also states that imposing unpaid leave mandates on employers "is unwise policy that threatens jobs and the viability of many of the nation's small businesses."

There is speculation on Capitol Hill that Democratic leaders believe it would be good politics to bring the HFA up for votes in the House and Senate during an election year, so the bill may not come up until 2010. However, there also is talk of possibly adding the HFA as an amendment to health care reform legislation that Congress hopes to finish this fall.

Options and strategies

Many observers believe the HFA has a good chance of being enacted in some form, and NRCA is working with other business organizations to explore options and strategies for handling this issue.

Duane L. Musser is NRCA's vice president of government relations.