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As Cost Remains A Concern, D.C. Legislator Pares Down Paid-Leave Bill

Just how much paid family leave should D.C. residents get, if any? The issue is up for debate in the D.C. Council.
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Just how much paid family leave should D.C. residents get, if any? The issue is up for debate in the D.C. Council.

A sweeping bill that would give many D.C. residents 16 weeks of paid family leave has been pared down ahead of a public hearing later this week, where proponents and critics of the plan will have a chance to debate how much paid leave workers should get — and who should pay for it.

Under a draft bill circulated by D.C. Council Chairman Phil Mendelson on Monday night, D.C. residents working in the private sector would be eligible for 12 weeks of paid family leave. That's more than the current requirement — which is none — but less than the 16 weeks proposed by Council members David Grosso (I-At Large) and Elissa Silverman (I-At Large) in a bill they introduced last October.

Addressing costs

Mendelson also made other changes to Grosso and Silverman's bill, notably in limiting who can take leave and what conditions would qualify a resident for leave. Even more importantly, Mendelson cut what's known as the wage replacement, or how much money a person on leave makes relative to their normal salary.

Under Grosso and Silverman's original bill, the first $52,000 of anyone's salary would be fully paid back during leave. Above and beyond that, a smaller percentage would be paid, for a maximum weekly payout of $3,000.

But under Mendelson's changes, D.C. residents making less than twice the minimum wage — just under $50,000 per year at $11.50 an hour — would get 90 percent of their pay back. Above that, the amount paid back would decrease rapidly. The maximum weekly payout would be $1,500.

The changes reflect Mendelson's position on the paid-leave bill: while he has said that there are enough votes on the Council to pass it, he has also said that he wants to make sure that the costs of the program — which would be paid for by employers through a payroll tax — are kept under 1 percent of an employee's salary.

It also seems to be an attempt to thread the needle on an issue that has attracted passionate opinions from opposing sides in the debate.

Proponents say that paid leave would not only allow residents to bond with a newborn or attend to a sick relative, but do so without risk of financial ruin. But critics have warned that the proposed paid-leave program would be too expensive for businesses, which they say would choose to stop hiring or leave the city altogether.

That was the opinion expressed by Mayor Muriel Bowser, who has said that while she supports the concept of paid family leave, is concerned that Grosso and Silverman's bill would drive employers out of the city. They reject the charge, saying that paid leave would make D.C. businesses more competitive in hiring.

At a hearing in January, representatives of both sides clashed over how much Grosso and Silverman's 16-week bill would cost. One research organization estimated it would not exceed $280 million per year, less than a 1 percent payroll tax per covered employee. But another group said the bill would actually cost over $700 million — and one academic even pegged the cost at over $1 billion.

D.C. Chief Financial Officer Jeffrey DeWitt said the different cost estimates were largely the product of differing assumptions on who would take leave and how long they would take it for. He split the difference, estimating the Grosso and Silverman's bill would cost employers close to $500 million per year.

Since that hearing, DeWitt's office has been working with the different organizations to better approximate what a paid-leave program could cost employers and the city, which would have to manage the program. Without a solid estimate of those costs, DeWitt could opt not to certify the bill — meaning that it would be less likely to pass.

A work in progress

In a memo to members of the Council, Mendelson said that his changes were meant to spark renewed discussion ahead of Thursday's hearing — the third on the paid-leave bill — where 150 people are scheduled to speak. But he also said that more changes could be made to the proposal as more input is received.

"This draft is unlikely to be the final draft," he said in the memo. "While it reflects changes to the introduced version of the bill, I do not believe it as yet strikes the best balance between cost and benefits. Nor does it address all of the concerns that have been raised thus far."

Speaking on Tuesday, Bowser reiterated her concerns that no final cost estimate had been produced for the bill, and asked that a taskfoce be created to better debate and craft and paid-leave plan for D.C. workers.

"The idea of passing something this complicated…. we have to be very intentional about that," she said.

At the same time, supporters of the paid-leave bill introduced by Grosso and Silverman said that they were worried that business groups would further push to water down the proposal.

"We have concerns that corporate lobbyists will continue to try to weaken the bill. Working families should always come first for the District, especially given that businesses will assuredly continue to thrive in the District’s strong and growing economy," said Jaime Contreras of 32BJ SEIU, the union representing the service sector in the city.

California, Rhode Island and New Jersey are the only states with formal paid-leave programs. In 2014, the D.C. government started giving its employees eight weeks of paid family leave.

WAMU 88.5

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