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Mandatory Paid Leave Bill Introduced in Senate

On June 21, 2007, U.S. Senators Christopher Dodd (D-Conn.), Patty Murray (D-Wash.) and Ted Stevens (R-Alaska) introduced legislation that would create a fund aimed at providing up to eight (8) weeks of paid family leave to employees. An addition to the Family Medical Leave Act (FMLA), this bill would mandate that employees receive up to 8 weeks of pay for the birth or adoption of a child, to care for a child, spouse or parent with a serious illness, or to care for their own serious illness.

The Family Leave Insurance Act of 2007 (Senate Bill 1681) would establish the Family Leave Insurance Fund -- to be paid for by premium payments from employees and employers, as well as government dollars. Employers and employees would be charged a premium fee of 0.2 percent of each employee's earnings, with the government subsidizing any additional administrative cost not covered by the employer/employee premium fees.

Employees would be eligible for 8 weeks of paid leave over a 12-month period with wages varying by income level. Individuals earning up to $20,000 annually would receive100 percent of their weekly earnings, employees earning between $20,001 and $30,000 would receive 75 percent of their weekly earnings, employees earning $30,001 to $60,000 would receive 55 percent of their weekly earnings, and individuals earning $60,001 to $97,000 would receive 40 percent of their weekly earnings.

In order to qualify, employees would pay insurance premiums for at least 12 months and need to have worked for the same employer for 12 months prior to receiving any benefit. Benefits would be paid to the employee by the employers through the regular payroll process, and those employers would then be reimbursed by the Family Leave Insurance Fund.

Consistent with FMLA requirements, all employers with more than 50 employees would be required to participate -- but companies with equal or better benefits can choose to self-insure rather than participate in the federal program. Those employers with less than 50 employees could opt in, and would be given a 50-percent discount on premium payments. Self-employed individuals would be given the small-business discount of 50 percent, but would be required to pay both the employer and employee share of the premium -- resulting in the full fee of 0.2 percent.

Oversight of the program and the fund would reside with the Department of Labor in coordination with other FMLA programs. States and private employers that have existing programs similar to FLIA, and offering equivalent benefit levels, would be allowed to opt-out of the federal program.

Needless to say, if this bill becomes law, employee absenteeism rates are likely to increase significantly. Unpaid leave can be a disincentive to take off from work. Paid leave would be an incentive to take time off for many employees.

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