BIA voices opposition to paid family and medical leave

After keeping mum on the issue, organization faults ‘mandatory program’ at NH House panel hearing

The Business and Industry Association of New Hampshire has come out against legislative efforts to establish a state-mandated paid family and medical leave insurance program, while the fate of the governor’s plan for a voluntary program is uncertain.

The BIA – which sat on the sidelines for more than two years on the issue of paid family and medical leave – “couldn’t find our way around that this is a mandatory program,” testified David Juvet before the House Labor Committee during its hearing on Senate Bill 1, so numbered because it is the Senate Democratic majority’s legislative priority.

Instead, Juvet said that, while the organization is not yet endorsing the effort, it is looking at Gov. Chris Sununu’s proposal to allow businesses to join in whatever plan is developed along with the state of Vermont. The governors of the two states are hoping to negotiate with their state employees to set up a program that private businesses could join.

Governor Sununu said he intends to put the plan in the state budget. But the Vermont State Employees Association has rejected the idea and the New Hampshire SEA – which just walked out of contract negotiations – has said it would need to see what emerges though the legislative process.

Meanwhile, Senate Majority Leader Dan Feltes, D-Concord, SB 1’s prime sponsor, testified Tuesday there has only been a “marginal” response from Sununu’s office on a request for details about his voluntary program.

The governor’s office has not returned NH Business Review’s email on the matter, but Feltes issued the following statement:

“We are deeply disappointed the governor has ignored every call, letter and email asking to negotiate on a plan – making it clear he has no interest in signing paid family and medical leave into law. We look forward to shepherding SB 1 through the legislative process and will do everything we can to override Governor Sununu’s expected veto on paid leave.”

Previously muted opposition

Tuesday was the first time that the legislative effort ran into substantial resistance from business organizations.

The BIA joined the Greater Nashua Chamber of Commerce, which, while officially not taking a position, opposed a mandated program as well as the state chapter of the National Federation of Independent Business, which has consistently opposed the legislative proposal.

Their opposition followed hours of testimony overwhelmingly in favor of the bill, primarily from individuals who could benefit from such a program, but also from day care centers and organizations like New Futures and the NH Medical Association, which said it would alleviate what they called the state’s ongoing care crisis.

Until Tuesday’s hearing, business opposition had been muted. Last year, 100 businesses showed up at a legislative hearing to back paid family and medical leave because, they said, it could help them offer a benefit that could attract and retain young workers.

Indeed, Juvet had told NH Business Review that the BIA remained neutral last year because some of its members supported the program, but that was when there was a provision that allowed individuals to opt out of it. This year, he said, the BIA board voted to oppose House and Senate plans after vetting both sides.

Last year’s one-time opt-out provision – accepted by the sponsors in order to get the program through the then-Republican-dominated House – had never been tried before. Programs passed by a handful of states have been mandated to spread the risk and to prevent adverse selection.

Indeed, Sununu opposed last year’s proposal, and the Senate killed it, primarily because of concerns that the program would not be sustainable with an opt-out provision.

“I admit that the opt-out provisions created complications,” said Juvet, in response to a question from Labor Committee Chair Rep. Brian Sullivan, D-Grantham. “It was clumsy but at least it was there.”

Pluses and minuses

SB 1 – which was passed by the Senate on Feb. 14 on a party-line vote – and House Bill 712, which the House Labor committee has already endorsed and is due to be voted on later this week by the full House, both allow businesses to opt out, but only if they provide an equivalent program of their own.

Companies could also simply agree to pay all or a share their workers’ premiums.

In his testimony, Feltes listed a number of other measures intended to make the program easier for business: It dovetails with the unemployment compensation payroll deduction to minimize any extra paperwork; it would be bid out to a private third-party administrator so it would not be an entirely government run program; it would allow an employer to require that a worker use up sick and vacation days before collecting paid leave; it would allow the state Employment Security commissioner to adjust the deduction or the benefit in order to address concerns about sustainability.

But the Senate version extends a job protection provision in the federal Family and Medical Leave Act for firms with fewer than 50 employees to businesses with a minimum of 20, with the House leaving it at 50. That’s the biggest difference between the two bills

“The argument is that employees for some smaller companies may not be comfortable taking leave if they may not get their job back, particularly employees of low wage,” Feltes said in explaining the 20-employee minimum. He noted that the Senate bill originally extended job protections to firms with 15 employees or more but bumped it up to 20, after hearing the concerns of business.

That was still not enough for NFIB and the Nashua chamber, which said the lower limit was their biggest concern with SB 1, though both also opposed the mandated aspect of the bill.

“We cannot support a payroll deduction. It is an income tax,” said Tracy Hall, CEO of the Nashua Chamber. The organization also opposes allowing the Employment Security commissioner from being able to adjust the tax rate or benefits to protect the trust fund.

The bill is “completely silent” on the needs of small business from “the findings to the last word,” said Hall.

“The primary flaw is that it tells a small-business person how to operate their business,” said Bruce Berke, state director of NFIB’s New Hampshire chapter. “It’s a mandate. It’s an intrusion.”

But Feltes emphasized how the measure could help smaller employers who are at a “competitive disadvantage” with larger businesses that offer such benefits in “attracting the workforce of tomorrow.”

Most of those testifying after Feltes talked about how the benefit could have helped them, including Darlene Gildersleeve of Hopkinton, who testified with a 2-year-old girl on her lap. She said she had to leave her job to take care of her teenage daughter who suffered from mental illness and was replaced before she could return.

“I so badly wanted to work and help my family financially,” she said. “If I could have taken paid family leave, an enormous burden would have been lifted from my family.”