Protesters in cars join fast-food workers at a McDonald's in California, demanding guaranteed paid sick leave for all workers during the coronavirus outbreak. | Damian Dovarganes, File/AP Photo
By eleanor Mueller
POLITICO | June 25, 2021
Businesses and GOP lawmakers, typically aligned on policies that affect employers, aren't marching in lockstep when it comes to a cornerstone of President Joe Biden’s infrastructure plan: paid leave.
After decades of opposing federal paid leave mandates like the one Biden is pushing, many employer groups — including the U.S. Chamber of Commerce — are giving ground, even as top congressional Republicans push alternatives like tax credits.
The groups say they could accept some form of national policy as long as it preempts state and local leave regulations, making it easier for employers with workers in multiple states to comply with a single standard and leveling the playing field for businesses when it comes to a benefit that consistently polls well.
“The tax credit approach … doesn’t address our primary concern, which is getting to a national program,” Marc Freedman, the Chamber’s vice president of employment policy, said. “We would be happy to get behind an incentive approach if it met the other requirements that we’re looking for. But so far I haven’t seen anything that would address those concerns.”
The National Retail Federation is also pulling for a policy that stretches beyond tax credits and would take some of the burden off of its members to comply with programs in the nine states and District of Columbia that have implemented their own forms of paid family leave, along with the dozen states and D.C. that have enacted paid medical leave.
“Before they impose any additional employer mandates upon my members, my members would like strong federal preemption so we don’t have to continue to deal with this patchwork of state and local laws when it comes to paid leave,” Ed Egee, NRF’s vice president of government relations and workforce development, said.
Biden has proposed guaranteeing all workers 12 weeks of paid family and medical leave, with the requirement phased in over 10 years, for things like the birth of a child or to deal with a serious illness. It would cover at least two-thirds of their pay, up to $4,000 a month. The lowest-wage workers would be eligible to receive 80 percent of their wages.
The plan would be funded by tax increases on wealthy Americans.
What the U.S. Chamber of Commerce is looking for doesn’t align perfectly with Democrats’ vision, which doesn't include preempting state and local programs. And the group has attached plenty of strings to its position.
The Chamber also wants "some kind of size threshold,” Freedman said. Employers with fewer than a certain number of employees — say, 50 — “would not be required to be in the program we envision, but they could if they wanted to,” he said.
But “we have adjusted our position on needing some kind of national, structured program,” Freedman said. “That is still our number one target, and I don’t see that going away.”
Leading Republicans remain opposed to a top-down approach dictated by Washington, as does the powerful small business lobby.
The ranking Republicans on the the House and Senate committees with jurisdiction over the issue, Sen. Richard Burr (R-N.C.) and Rep. Kevin Brady (R-Texas), have promoted policies that focus on incentives rather than a federal mandate. Both lawmakers want to extend a paid family and medical leave tax credit in the tax reform implemented under former President Donald Trump.
"There's a lot of bipartisan interest in the Senate surrounding paid leave," Burr said last month. "But we need to remember that we're really not good at running businesses from Congress. A one-size-fits-all approach does not work on issues, especially paid leave."
But the wall of opposition to mandatory paid leave among employers has significantly weakened.
In March, almost 200 businesses — including Levi Strauss, Etsy, Spotify and Patagonia — sent a letter to congressional leaders urging them to create a “permanent paid family and medical leave policy.” This week, many of those same employers are participating in a virtual fly-in, meeting with lawmakers to advocate for the program’s inclusion in infrastructure investments.
Paid leave laws are “so varied across the country,” said Tracy Layney, chief human resources officer for Levi Strauss, which has a paid leave program. “That’s where the value of a consistent program really plays out ... for companies like ours to administer.”
"This is not just a matter of the unnecessary costs and administrative burden for employers," Marianne McManus, IBM's vice president of health and benefits, testified at a recent Senate hearing. "It is a matter of fundamental fairness and equity for employees. It can be overwhelming and confusing for employees to determine which laws apply and what benefits they are already entitled to."
While all of the large and midsize companies participating in the fly-in have their own paid leave programs, many of the smaller ones cannot afford to provide the benefit to their workers. That's part of their reason for advocating for a national policy: to level the playing field with bigger employers.
The comments represent a dramatic shift in tone from some of the nation’s largest companies, once fiercely opposed to a national paid leave program. Covid, which highlighted the U.S.'s distinction as the only major industrialized nation without mandatory paid leave and raised the specter of people going to work sick, sparked growing support for the policy. So too did support from the Trump administration and some GOP lawmakers.
Not all business groups are supportive of a national policy, though. Small business advocates, in particular, are opposed.
"There is no such thing as a one-size-fits-all policy that works for every business or every industry," Elizabeth Milito, senior executive counsel for the National Federation of Independent Business, said at a House hearing on paid leave last month. "NFIB members would uniformly say now is not the time to create some new behemoth entitlement program with Treasury as the beneficiary."
But small businesses are among those participating in this week's fly-in — which happens to collide with NFIB's annual fly-in. They say that a national paid leave policy would not only allow them to provide their employees with the benefit, but help them retain workers.
“For businesses as small as mine to compete, we need a national paid leave program,” said Donna Welch, the owner of Let's Meat on the Avenue, a butcher shop in Alexandria, Va.