X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

SACRAMENTO – California may be the first state to grant paid family leave if a bill introduced by Sen. Sheila Kuehl (D-Santa Monica) is passed. The bill would allow workers to collect up to 60% of their salary for up to 12 weeks a year while they take care of a serious ill child, spouse, domestic partner or aging parent or bond with a new child. The new program would be funded by a new tax on California employers and their workers. The measure cleared the state Senate in June by a 21-15 vote, and the Assembly Appropriations Committee is hearing the matter. Business groups are against the bill claiming that the costs would prove high and lead to layoffs, while supporters say that the legislation would actually save money by helping reduce employee turnover. The California Credit Union League has not taken a position for or against the measure and that is in keeping with its general policy on labor law issues says CCUL Public Relations Specialist Mark Lowe. As for what the bill, if passed would cost, the numbers range from proponent estimates of $750 million a year to the California Chamber of Commerce estimates of more than $2 billion in just the first year. At issue is the impact of the statewide mandatory bill on smaller businesses that may not be able to afford paid family leave and possible hidden costs. The California branch of the National Federation of Independent Business has recently released a report that California Employment Development Department estimates fall short of actual direct costs of benefits. The state agency estimates that 199,000 people would take advantage of the paid leave during the first year at a cost of $3,503 per beneficiary, or $ 697 million. The NFIB report assumes that the average worker would be paid $4,154 for 12 weeks’ leave under the program, based on government estimates of an average annual salary of $36,000 in the state. In addition, the study claims that the legislation did not take incidentals such as hiring temporary workers into consideration. The report estimates the typical company would be required to spend between $ 9,600 and $11,520 on temporary-worker or overtime costs to cover each 12-week period per beneficiary. According to the report other missing costs for each beneficiary include $3,000 in retraining; $2,000 in lost sales; $1,000 in record keeping; $500 in management time to learn the new law; and $2,000 in changes such as adjustments to payroll systems and personnel manuals. According to the National Partnership for Women & Families, because employers would not be required to pay health, retirement and other benefits while an employee was on leave many of the costs would be recouped. The group adds that the United States is one of the last developed nations without some form of paid parental leave. About 127 countries have such programs, and many others have passed similar laws to compensate workers who need time off because of family emergencies. [email protected]

Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.

Your access to unlimited CUTimes.com content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Critical CUTimes.com information including comprehensive product and service provider listings via the Marketplace Directory, CU Careers, resources from industry leaders, webcasts, and breaking news, analysis and more with our informative Newsletters.
  • Exclusive discounts on ALM and CU Times events.
  • Access to other award-winning ALM websites including Law.com and GlobeSt.com.

Already have an account?

Credit Union Times

Join Credit Union Times

Don’t miss crucial strategic and tactical information necessary to run your institution and better serve your members. Join Credit Union Times now!

  • Free unlimited access to Credit Union Times' trusted and independent team of experts for extensive industry news, conference coverage, people features, statistical analysis, and regulation and technology updates.
  • Exclusive discounts on ALM and Credit Union Times events.
  • Access to other award-winning ALM websites including TreasuryandRisk.com and Law.com.

Already have an account? Sign In Now
Join Credit Union Times

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.