IMPORTANT CONGRESSIONAL ALERT ON NEW HOUSE BILL PROVIDING 12 WEEKS OF PAID FAMILY AND MEDICAL LEAVE

            Yesterday, four members of Congress introduced the Family Leave Insurance Act of 2009, which would provide 12 weeks of paid leave to employees who need to take certain types of family or medical leave.  The legislation, if passed, would:

-               provide employees with 12 weeks of paid leave over a 12-month period for their own serious health condition or to care for a new child, an ill family member, or a wounded veteran or to deal with the military deployment of a family member;

-               provide benefits through a new trust fund, which would be financed equally by employers and employees, who would each contribute 0.2% of the employee’s pay to it; and

-               progressively tier the benefits so that during the leave period a low wage employee, who is earning less than $30,000, would receive full or near full salary replacement, middle income employees ($30,000- $60,000) would receive 55% wage replacement, and higher earning employees (over $60,000) would receive 40-45%.  The benefits would be capped at approximately $800 per week;

The U.S. Department of Labor would contract with individual states to administer the program, similar to how the unemployment insurance program is administered. The legislation, if passed, will significantly broaden the definitions of covered employee and covered employer and would place significant financial and administrative burdens on employers administering the program.  It also will likely encourage even more employees than ever to take leave when they otherwise would not have.  Indeed, according to a 2000 U.S. Department of Labor study, 78% of employees who need family or medical leave do not take it because they cannot afford to.  

The Congress members who have introduced the legislation are obviously very committed to ensuring its passage.  Indeed, Rep. Maloney, Chair of the House Financial Services Subcommittee on Financial Institutions and Consumer Credit, who is one of the bill’s proponents stated: “There couldn’t be a worse time than during an economic downturn to ask parents to choose between a paycheck and their new child or sick family member. Tough times call for strong supports for working families, like paid family and medical leave."  Rep. Stark, Chair of the House Ways and Means Health Subcommittee, stated: "If we want to help people through this recession, we need to make sure that workers can maintain their incomes without sacrificing their families' needs.  The Family Leave Insurance Act will provide paid family leave for workers, which will mean healthier children, stronger families, and more competitive businesses."

We will continue to provide you with information as this proposed legislation develops.  If you have any questions about it, contact Amy B. Royal at (413) 586-2288 or at aroyal@royalmunnings.com.