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Business Lobby Shifts Paid-Leave Stance, Sensing Action in 2021

Sept. 16, 2020, 4:45 PM

Leading U.S. business groups are softening their stance in the debate over federal paid-leave policy, with some stating publicly for the first time that they’re open to Congress creating a national program, provided there are major caveats.

The business community has opposed efforts over the last decade to establish a nationwide paid-leave mandate, instead supporting action by individual employers to adopt their own programs for medical and family leave. Corporate executives have started changing their position to support a national model, and Fortune 500 companies have backed a voluntary federal standard that would shield them from state and local laws.

Now, the coronavirus pandemic, the November election, and the growing patchwork of state mandates are motivating more leading industry lobbying associations to relax their resistance—and position themselves for future negotiations on Capitol Hill.

“For a long time we just said, ‘No.’ Now we are trying to see if there is a way to say, ‘Yes,’” Marc Freedman, vice president of employment policy at the U.S. Chamber of Commerce, said in an interview.

The Chamber is one of several influential trade associations and corporations that filed comments with the U.S. Labor Department this week outlining what they would be willing to support in a federal paid-leave standard, stopping short of openly advocating for Congress to pass legislation mandating leave policy. Their primary sticking points were that if employers are subjected to a federal law, they should be exempted from state and local paid-leave mandates, and that businesses that already provide paid medical or family leave should be offered flexibility.

The comments were sent to the DOL Women’s Bureau in response to a low-profile initiative soliciting public input on paid-leave policies. The project has no clear goal and is being run by a subagency that lacks regulatory authority. But the Chamber and the HR Policy Association are among the groups that seized on the request to lay out opening positions in a debate that lobbyists say could lead to bipartisan legislation next year.

“We think this is a good exercise for employers to engage in, because this is going to be one of the key agenda items in 2021,” said Roger King, senior labor and employment counsel at the HR Policy Association, which represents human resource chiefs at some of the country’s largest employers.

‘No Small Undertaking’

The pandemic has altered the political landscape on leave policy, intensifying pressure on Congress to establish a permanent federal requirement that gives workers paid time off to balance work with health and family obligations, such as helping children with virtual learning assignments or caring for parents who contract Covid-19. The business lobby, too, wants to ensure it will have a seat at the table during negotiations, regardless of who wins the November election.

President Donald Trump signed a temporary virus-relief law in March that extended paid medical and family leave benefits to some workers, but it wasn’t as comprehensive as policies Democrats are backing, and it expires at year’s end.

The Workplace Policy Institute at management-side firm Littler Mendelson wrote in comments to DOL that it “is no small undertaking” to create a national, mandated paid-leave program.

“If that is a path which the legislature wishes to go, we stand ready to work with lawmakers on both sides of the aisle to ensure that any such scheme balances the value and importance of paid leave to employees with the needs of companies who may already be providing generous paid leave programs and wish to continue doing so,” they added.

Vicki Shabo, a senior fellow who focuses on paid leave at the left-leaning think tank New America, said the business community’s responses to the DOL “request for information” were telling.

“The seriousness with which business groups like the Chamber and HR Policy Association and business-side law firms like Littler have answered this RFI is a sign that a national paid family and medical leave policy is a question of when and what, rather than if,” said Shabo.

Opt-In Model

Many business groups, including the ERISA Industry Committee, and companies such as IBM and Prudential, used their comments to outline ways that employers already providing the minimum standard of leave could be shielded from state and local initiatives.

Preemption provisions have been a non-starter for Democrats, who believe a federal law should set a floor for state policies to exceed. Conservatives have expressed concern for weakening states’ rights.

The Chamber and the HR Policy Association suggested that a federal program allow employers to opt-in and also give businesses and states freedom to maintain their own leave policies.

“The overwhelming priority is to provide employers the opportunity to opt into a nationally structured program that relieves them of having to comply with the patchwork of state and local programs,” the Chamber said in its comment letter. “By making this an option for employers, those employers who are comfortable with the state or local programs that cover them, such as those employers who do not operate in multiple jurisdictions, may remain in those programs.”

The HR Policy Association floated a novel approach in which multi-state companies would still be subject to state and local laws requiring more days of paid time off than a potential federal standard, but also would be shielded from state and local procedural requirements that determine how paid leave must be administered, calculated, and paid out.

Shabo predicted that left-leaning advocates would oppose an opt-in formula.

“Their solutions for opt-ins would mean a continuation of a patchwork where some working people—most likely the most vulnerable—are left behind,” Shabo said.

Legislative Backdrop

The president’s daughter and adviser, Ivanka Trump, has backed a national family leave benefit, but the administration hasn’t been able to rally lawmakers behind a bill that could gain bipartisan traction.

Republican lawmakers have split between various legislative models that reach for Social Security benefits or a tax credit as financial assistance for working families, but omit creation of a mandate for paid time off. That includes the Trump-endorsed Advancing Support for Working Families Act (S. 2976), from Sens. Bill Cassidy (R-La.) and Kyrsten Sinema (D-Ariz.).

Most Democrats are pushing for the FAMILY Act (H.R. 1185), a measure introduced by Rep. Rosa DeLauro (D-Conn.) and Sens. Patty Murray (D-Wash.) and Kirsten Gillibrand (D-N.Y.). Democratic presidential nominee Joe Biden has backed the bill, but the business lobby has rejected it, and so far only one Republican, Rep. Chris Smith (R-N.J.), has signed on as a co-sponsor.

Under the bill, Congress would create a fund to guarantee up to 12 weeks of partial income for workers to care for newborn children or family members suffering from serious illness. It would be funded by a tax on employers, employees, and self-employed workers. Business groups have balked at the bill’s tax requirements, as well as the overall mandate, for employers.

Employer groups refrained from endorsing Democratic bills in their comments, but signaled a willingness to engage on the issue in a way that could help build momentum for a legislative compromise.

“There probably is some recalibration,” said Littler Mendelson attorney James Paretti, who co-authored his firm’s comment letter. Referring to Littler’s employer clients, Paretti added: “If there was something to be done here, if there was a federal minimum standard, that might be something they could live with.”

To contact the reporters on this story: Ben Penn in Washington at bpenn@bloomberglaw.com; Jaclyn Diaz in Washington at jdiaz@bloomberglaw.com

To contact the editors responsible for this story: John Lauinger at jlauinger@bloomberglaw.com; Martha Mueller Neff at mmuellerneff@bloomberglaw.com

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