A plan for states to provide paid leave for new parents was the focus of a hearing held on March 9 by the House Ways and Means Subcommittee on Human Resources.
The Family and Medical Leave Act (FMLA) (P.L. 103-3), which was approved in 1993, mandates that certain businesses grant up to 12 weeks of unpaid leave annually for workers to care for newborn or newly adopted children, to care for seriously ill family members, or to address their own serious health problems. To be eligible, a worker must be employed for at least a year by a public agency, a public school, or a private employer with 50 or more employees living within 75 miles. When employees are granted FMLA leave, their status in the workplace remains unaffected.
While a number of new parents benefit from the FMLA, many lower-income parents are unable to utilize it because they cannot afford to take unpaid leave. On several occasions, the President has publicly endorsed the idea of using state unemployment compensation funds to provide income for parents who have recently had a baby or adopted a child.
Although current law does not prohibit states from taking that action, several states last year sought clarification of their status under federal law. In December, the Department of Labor (DoL) responded by issuing a draft regulation to create a pilot program for states to experiment with the approach. Current law states that unemployment benefits are for individuals who have been involuntarily removed from their jobs, and who are “able and available” to work.
Under the DoL’s draft regulation, that definition would include new parents who have temporarily stepped out of the work force, even though they are not seeking new work. The public comment period on the proposed rule is currently underway, with the publication of a final rule expected before summer.
Following publication of the proposed rule, several states have started to take action. With state legislatures meeting across the country, bills to provide unemployment benefits for those on parental leave have been proposed in at least 13 states—California, Connecticut, Illinois, Indiana, Iowa, Maryland, Massachusetts, Minnesota, New Hampshire, New Jersey, New York, Vermont, and Washington.
Subcommittee Chair Nancy Johnson (R-CT) opened the March 9 hearing with strong criticism of the plan, describing it as a “backdoor raid on the unemployment compensation system.” She added: “Although I am a firm supporter of parental leave…I cannot support using money intended for unemployed workers to pay benefits to families choosing to take parental leave.”
Rep. Johnson also asserted the plan would result in higher unemployment taxes for employers. “Any state that adopts this option will spend more money than it currently does on unemployment benefits,” she said, adding that it is “a mathematical certainty” that “taxes must be increased.” She also expressed concern that many states’ unemployment trust funds are unstable and could not withstand the extra demand of a new benefit.
However, Deputy Assistant Secretary Raymond Uhalde of the DoL testified that the administration’s proposed rule is appropriate because several states already use unemployment funds for individuals who fall outside of the “able and available” definition. “For example, some states allow the payment of benefits to individuals who quit their jobs to accompany spouses who have been transferred to other locations,” he said.
Referring to Rep. Johnson’s concerns about increased taxes and the stability of unemployment trust funds, Mr. Uhalde said the program is “wholly voluntary” for states, adding: “We fully expect that a state would be prudent in its decisions and would not enact changes without first assessing the solvency of its unemployment fund.”
Rep. Johnson’s home state of Connecticut is one of the states considering legislation to provide the parental leave compensation. State Representative Christopher Donovan, sponsor of the measure, told the subcommittee that under Connecticut law, it is already the case that “a worker cannot be disqualified for unemployment benefits if the worker quits employment to care for a seriously ill family member.” He added: “The benefits are clear, the payment system is in place, and the overall system can easily be adapted for family leave.”
However, Todd Shimkus of the U.S. Chamber of Commerce cited the Unemployment Tax Act, saying, “The legislative intent is clear—Congress has not delegated the authority to the Department of Labor to carve out exceptions” to the guidelines for unemployment eligibility. “This regulation effectively strips ‘unemployment’ from unemployment compensation,” he added.
Several other witnesses delivered testimony. Those opposed to the plan included Sen. Judd Gregg (R-NH), Michigan Unemployment Director Jack Wheatley, Kimberley Hostetler of the Connecticut Hospital Association, and Eric Oxfeld of Strategic Services on Unemployment and Workers’ Compensation. Maurice Emsellem of the National Employment Law Project spoke in favor of the plan. In addition, testimony against the plan was submitted in writing by The Heritage Foundation; testimony in favor of the proposal was submitted by the National Partnership for Women and Families, the AFL-CIO, and Rep. Lynn Woolsey (D-CA).
