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Businesses Criticize D.C. Paid-Leave Bill, But Struggle To Offer Alternatives

A bill before the D.C. Council offers virtually every worker in the city 16 weeks of paid leave, to be funded by a per-employee tax on employers.
https://www.flickr.com/photos/gabi_menashe/218574269/
A bill before the D.C. Council offers virtually every worker in the city 16 weeks of paid leave, to be funded by a per-employee tax on employers.

Business groups representing just about every industry in the District — from hotels and restaurants to retailers and builders — strongly criticized a proposed paid-leave bill during a D.C. Council hearing on Wednesday, but struggled to offer alternatives or possible changes to the measure when pressed by legislators.

The groups said the bill — which would offer virtually all D.C. workers up to 16 weeks of paid family leave, with the costs covered by a per-employer tax on employers — would dramatically increase operating costs for local businesses, many of which would stop hiring or leave the city altogether.

"This bill would kill D.C. jobs," said Harry Wingo of the D.C. Chamber of Commerce. "This would revive D.C.’s reputation as a high-tax, business-unfriendly place," offered Charles Miller of the Federal City Council. “At the end of the day, you can’t take leave from a job you don’t have or doesn’t exist," warned Cailey Locklair Tolle of the Maryland Retailers Association.

Others worried about the potential for abuse, criticized the lack of specifics on how much the measure could cost different businesses and organizations, and said that D.C. would be jumping far ahead of the three states that currently offer paid leave — both in how much time is given and who would pay for it.

But the consistent drumbeat of criticisms drew pointed questions from Council Chairman Phil Mendelson, who pressed the groups to offer alternatives to the bill — or outline specific changes they would want seen to make the bill more agreeable.

In one particularly animated exchange, he asked Wingo a series of questions about whether the business community could support the overall concept of paid leave for workers. "Do you agree that benefits are beneficial to employees? Is it best for employers if they pay no benefits to their employees?"

Changes likely

Mendelson's questioning seemed to reflect the political reality surrounding the bill, which was introduced in October. With a majority of the Council already supporting the measure — and polling showing it has drawn wide support from residents — he said earlier this week that whether the bill passes isn't the question, but rather what would be included in a final version.

As currently written, the bill would require all private employers to contribute to a fund from which leave benefits would be paid. Workers making up to $52,000 a year would have their full salary covered, while those making more would see a declining percentage of everything above the $52,000 covered. The top pay-out would be $3,000 per week.

"This bill is for people who have to make heartbreaking choices," said Council member Elissa Silverman (I-At Large). She said it would help people take time to care for newborns or ailing relatives, some of whom currently have no paid leave at all.

But in moving towards that goal, Council member David Grosso (I-At Large) — who with Silverman introduced the bill — said the sweeping measure wasn't set in stone. "As written, the bill has 10 variables that would lower the costs on businesses," he said, offering critics a chance to offer changes.

And some business leaders did. Jim Dinegar of the Greater Washington Board of Trade said he would want the issue addressed at the federal level, to avoid creating a regional imbalance where one jurisdiction would offer paid leave while others didn't.

Kathy Hollinger of the Restaurant Association Metropolitan Washington said leave should be limited to workers who have been on the job for at least one year, and asked that provisions requiring employers to notify their workers of paid-leave rights be simplified.

And Steve Hoffman, who owns a local insurance company that has operated in the city since 1906, asked that the leave be cut to eight weeks — and that it be paid for in part by the employee taking the leave. Without some changes, he worried the increased costs would force him to move — or close.

"We've always felt the need to stay and pay back a city that has given us so much," he said. "But if the [bill] passes in its present form, we will have to consider leaving the District because we compete against not only D.C. agents, but also agents across the country."

Containing costs

It was concerns like those that prompted Mendelson to ask proponents of the bill — who largely spoke in personal terms about the bill — to address the costs of implementing paid leave.

"There is a cost to this," he said to a panel of advocates for the bill. "There's no question [paid leave] would help children, families and low-income folks. It could change a whole lot of social problems we have. That's not the issue. I need you to speak to the cost."

"We have to wait until we get the actual calculations of what it would cost to provide this benefit," said Ed Lazere of the D.C. Fiscal Policy Institute, speaking to a reality that hung over the hearing throughout the day — no final calculations on the bill's costs have been produced, nor has a study funded by the U.S. Labor Department on a number of paid-leave proposals for D.C. been finalized.

But even without those specifics in place, Lazere pushed back on the argument that it would drive businesses to close or into the surrounding states.

"After raising the minimum wage, they don't tend to lose employees, they don't tend to move. Businesses are flexible, they can respond to the added costs through a variety of means," he said.

Proponents also said that the bill could actually serve to help small businesses that can't currently afford to offer any leave, and pointed out that more and more large businesses are instituting paid-leave policies as a means to attract and retain top talent.

At one point, Silverman noted that Wingo of the Chamber of Commerce once worked for Google, which recently implemented an 18-week paid-leave policy. She also pointed out that Miller of the Federal City Council doubles as a senior attorney at Covington and Burling, a powerhouse legal firm that also offers 18 weeks of paid leave.

That raised another concern on the bill — what happens with businesses and organizations that already offer paid leave? John Cavanaugh, speaking on behalf of the Consortium of Universities, noted that the city's 10 universities were extremely concerned with how the measure would affect the leave they already offer.

"The consortium strongly supports the concept of paid leave, and has several types of paid leave in effect as evidence," he said. "The consortium opposes the unfunded mandate that will cost institutions in the District $15 million per year to implement a one-size-fits-all program that may not address the needs of our employees."

The diverse groups that could be affected by the paid-leave bill will have a chance to continue weighing in over the next few months, as Mendelson has said he will call at least two more hearings before any further action is taken on the proposal.

And despite uncertainty over what form the bill could ultimately take, Council member Mary Cheh (D-Ward 3) — who supports the measure — said that even having the debate is a positive step forward.

"I doubt the legislation will emerge in same form, but it starts the conversation," she said. "It’s a conversation that’s long overdue."

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