Davis to Sign Bill Allowing Paid Family Leave

SACRAMENTO —  Gov. Gray Davis has decided to sign legislation allowing most California workers to take paid leave after the birth or adoption of a child or to care for sick family members, administration officials said Sunday.

Davis will sign the measure today at UCLA Medical Center in Los Angeles, officials said, capping one of the most closely watched issues of the legislative session and making California the first state to enact a comprehensive paid family leave program. The bill is seen by supporters as a model for the nation.

Under the measure, which was written by Sen. Sheila Kuehl (D-Santa Monica), most workers will be paid about 55% of their salary for six weeks of leave for a new child or sick relative. The program will expand the state fund providing insurance for disabled workers but will be funded entirely by employee payroll deductions, averaging about $26 a year. About 13 million of California’s 16 million workers would be eligible.

Labor unions and women’s groups across the country hailed the Democratic governor’s decision to make California the first state to enact a comprehensive paid family leave program.

“This is a tremendous victory,” said Karen Nussbaum, assistant to AFL-CIO President John Sweeney in Washington, D.C., and an activist involved in the fight for paid family leave for more than 20 years. “It was a huge effort on the part of the labor movement.”

Business groups denounced the governor’s decision.

The California Chamber of Commerce led a coalition of groups that tried unsuccessfully to kill the Kuehl bill in the California Legislature. The groups have described it as one of the most economically damaging pieces of legislation on the governor’s desk.

“It’s a huge disappointment to us that the governor would even consider signing it,” Julianne Broyles, a lobbyist for the California Chamber of Commerce in Sacramento, said Sunday. “California businesses will be at a competitive disadvantage because of this, and [Davis] doesn’t seem to care.”

In reaching his decision, Davis “weighed all the options of taking such a great step, but when it came right down to it, he believes in putting family first,” said press secretary Steven Maviglio.

During the final legislative wrangling over SB 1661 in August, Kuehl said, she agreed to the governor’s suggestions to scale back the bill’s impact on businesses. She shortened the leaves to six weeks from 12 and shifted the expense entirely to workers rather than have employers and employees split the costs.

Those changes haven’t satisfied the California Chamber of Commerce and other opponents, who contend that any form of paid leave will be a costly blow to businesses.

“Paid family leave is one of the worst bills for employers in the 2001-02 legislative session,” said Broyles. “This bill fails miserably to address the real cost concerns of employers--the costs of replacement workers and additional overtime to cover for absent workers, training costs and loss of productivity.”

Supporters, however, said business groups have voiced similar concerns about virtually every labor benefit on the books today, ranging from the minimum wage to workers’ compensation payments for job-related injuries. They said paid leave will result in happier, more focused workers who might otherwise be forced to quit their jobs because of family emergencies.

“We as a nation love to talk about ourselves as a family-friendly nation, but when it comes to having the policies in place to live up to that we often fall short,” said Judith Lichtman, president of the National Partnership for Women and Children, a Washington-based advocacy group involved in the nationwide battle over paid family leave. “This is a really powerful statement on behalf of California workers who need to take time off to care for loved ones but can’t afford to take leave when their families need them the most.”

In a legislative year that has seen the California Labor Federation shepherd more than 20 bills to the governor’s desk, paid family leave was a top priority for the state’s largest labor group.

“Certainly, in terms of family legislation, I think it’s far and away the most significant bill [Davis] has signed,” said Tom Rankin, president of the California Labor Federation. “It’s a program whose time has come. Actually, it came a while back.”

Under the Kuehl bill, only workers who pay into the state disability insurance system would be eligible for the paid family leaves. State government employees are exempted from that system because California covers them under a self-insured program. Payroll deductions for eligible workers--ranging up to $70 a year for people earning more than $72,000 a year--would begin in January 2004. Workers would be allowed to start taking paid leaves as of July 1, 2004. The maximum payment will be $728 a week, and the payments will not be taxed.

Workers will only be allowed to take leaves to bond with a new child--whether by birth, adoption or foster care--or to take care of a sick child, spouse or domestic partner, parent or, in some cases, grandparent.

Financial and administrative details remain to be worked out. Business groups predict worker deductions will have to be much higher to support the program.

Pam Haynes, a lobbyist for the California Labor Federation who worked on the issue in the Legislature, said the benefits for Californians far outweigh the costs or outstanding questions.

“This has been a labor of love,” she said. “I’m so excited that California workers are finally going to be able to take the time they need to be with their families.”

California marks the first victory for the AFL-CIO and its allies in a growing national campaign for paid family leave, unfolding in state legislatures nationwide. Measures similar to the California bill have been introduced in nearly 30 statehouses over the last two years, but none has been signed into law, supporters say.

Labor and advocacy groups are planning to parlay their California success into legislative victories in other states.

“Advocates can go to other states and make the case that if a state as concerned as California was about balancing its budget can do this, other states can do it as well,” said Nussbaum. “The ability to take time off when your family really needs you is so meaningful that I never found it easier to ask people to weigh in, to make phone calls to put this one over the edge. But the employer community fought this one very, very hard.”

The United States is one of the few industrialized nations in the world that doesn’t offer workers paid leave for the birth or adoption of a child or illness of family members. Labor unions, women’s organizations and other advocacy groups have been pushing for the proposal for more than 20 years, with little to show for their efforts.

Six states now offer modest paid family leave programs, adopted in the 1960s and 1970s and funded through unemployment insurance or temporary disability insurance payroll deductions. A few states allow employees to use personal sick leave to care for family members, and some private employers offer paid family leave as an employment benefit.

The California measure builds on a 1993 law--a Clinton administration initiative--that guarantees the jobs of workers who take unpaid leave to bond with a new child or care for a sick family member. That law exempts companies with 50 or fewer employees by allowing them to replace a worker who takes a family-related leave.

Not all businesses oppose paid family leave.

Elliott Hoffman, co-founder of Just Desserts in Oakland, said that his company instituted company-paid family leave after the birth of his son 22 years ago. The benefit has helped him maintain a loyal and motivated work force, he said.

“If family and family values, if you will, are truly an important value in this country, to me this is a no-risk bill,” he said.

Labor unions and other paid family leave advocates said support for the idea is growing as more families with two working parents are torn by their inability to take time off to care for sick children or parents.

“People are finally seeing the real need to do something about it,” Rankin said. “Obviously the politicians are following the people here.”

Sen. Bruce McPherson (R-Santa Cruz) and other opponents of the California measure said they fear that labor groups will try to shift paid-leave costs to employers in the future--something they said many companies can’t afford.

That isn’t the immediate goal of the California labor movement, but cost-sharing for paid family leaves is the long-term goal, Rankin said.

“It’s a crucial program,” he said. “It’s worth it for employees to have this kind of insurance, even if we couldn’t get employers to put up their fair share. That’s not unusual in our society, but it’s outrageous.”