Labor/business compromise paid family and medical leave bill on the move

By ERIN SHANNON  | 
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Jun 30, 2017

After a week of legislative maneuvering, a bill that would implement a new paid family a medical leave law appears to be on the move. Today the Senate Ways & Means Committee voted in favor of providing the $82 million funding package needed to implement the program. 

The bipartisan proposal negotiated by some lawmakers, the business community and organized labor would make Washington the fifth state to require paid family and medical leave to every worker.  If passed by the Legislature, workers would receive the most generous paid leave benefits in the nation beginning January 1, 2020.

Under the bill, SB 5975, workers who clock at least 820 hours in one year would be entitled to up to 18 weeks of paid leave each year to care for a new child, a sick family member, or to tend to their own injury or condition.  Workers using the leave benefits could collect a weekly maximum of $1,000 in replacement wages.  The paid family and medical leave is in addition to the new paid sick leave (which accrues at one hour of paid leave for every 40 hours worked, with benefits paid at full wages) approved by voters last year in Initiative 1433.

The paid leave benefits mandated by the amended version would be funded by a payroll tax paid by both employers and workers.  Employees would pay 100% of the tax to fund the paid family leave fund, while funding for the paid medical leave fund would be split between employers (45%) and workers (55%).   In all, workers would pay 63% of the overall payroll tax with employers paying the remainder. 

Businesses with fewer than 50 workers would be exempt from paying into either fund altogether, with employees of those businesses paying the full 100% of the payroll tax.  However, smaller employers that opt to pay the tax could be eligible to receive “small business assistance” in the form of a state government grant of up to $3,000 for each worker that uses the paid leave benefit (for up to 10 workers each year). 

Collection of the payroll tax would begin January 1, 2019, but the paid leave benefits would not be available until the following year in 2020.

The measure also includes a provision preempting local jurisdictions from mandating their own paid family and leave laws, which has long been a major concern for employers facing a patchwork of differing labor laws (such as minimum wage and paid sick leave) from city to city.

This agreement is the culmination of weeks of intense negotiations between the various stakeholders.  Early in the first legislative session, Democrats and Republicans offered dueling, and dramatically different, versions of paid family and medical leave bills.

The Democrat version (the original version of SB 5032) would have provided up to $1,000 per week for up to 38 weeks of paid leave each year.  Employees would be eligible for the paid leave after working just 340 hours (that’s an average of 6.5 hours per week) and the proposal would have been funded by a 50-50 split between employers and workers.

Across the political aisle, some Republicans offered SB 5149, which would have allowed 12 weeks of paid family and medical leave, phased in over three years.  Employees would have been required to work 26 weeks (6 months) to become eligible for the paid leave benefits that would have offered a maximum of about $650 per week.  That plan proposed funding entirely by employees through a payroll tax, as is done in the four other states with paid family and medical leave laws.

After both proposals stalled, threats of a radical labor-backed initiative convinced many in the business community to push for a compromise.

After months of negotiations, the result is SB 5975.  While no public hearing was held on the policy provisions of SB 5975, earlier this week the Senate Commerce, Labor & Sports Committee held a lively last-minute hearing on a near identical version of SB 5975, in the form of a significantly amended version of SB 5032.  

The hearing highlighted the discord between some members of the business community on the issue of paid family and medical. 

While many stakeholders in the business community participated in the negotiations and support the compromise, hoping it will ward off labor unions running a more onerous initiative, many other small business owners remain adamantly opposed.  Patrick Connor, the president of the National Federation of Independent Business (NFIB), which represents more than 8,000 small business owners across the state, testified that his members say many of their workers do not want a government mandate forcing them to pay for paid family and medical leave benefits they may never use.

One small business owner testified that while he may not be opposed to a paid family and medical leave law in the future, the last-minute rush to push through a government mandate on employers and workers in the final hours of a third special legislation session does not serve the public interest.  He related that many of the small business owners in his community are completely unaware lawmakers are poised to pass a sweeping paid family and medical leave law this week.

Senator Baumgartner, chair of the CLS Committee, expressed concern that while the proposal was negotiated by members of the business community, every one of them that he has spoken with “has said we don’t like the policy, but we’re afraid of an initiative.  It’s been what I could call legislative coercion on the policy.”

Patrick Connor concurred:

“Our members feel like they’re under siege; so either the legislature does something less bad to them or they get something worse at the ballot box.”

Connor explain a paid family and medical leave mandate would be yet another financial pressure straining small businesses who are already struggling with the state’s newly increased minimum wage and paid sick leave mandate.  “These are costs that are not the result of anything other than the public policy demands by a well funded group of folks who are able to put what they want on the ballot and get what they want at the ballot box."