Opening Statement on Additional Paid Family Leave Proposals

The following opening statement was presented by Councilmember Silverman at the Committee of the Whole Hearing on October 10, 2017 to discuss five new paid family leave proposals:

Late last year, this Council passed a comprehensive paid family and medical leave program that would give our businesses a competitive advantage while helping our city’s workers, particularly our lower-wage employees, take care of their loved ones. The legislative process was in some ways unprecedented and certainly extraordinary: It included an extensive economic impact analysis, 14 months of discussions, 3 formal hearings, and countless meetings. After two votes, the program went through Congressional review without a peep and is now our law.

Our goal—both then and now—should be to ensure that the District has a paid leave program that works for everyone.  That means no matter who you work for or what you get paid, you have guaranteed access to leave and you can actually use the benefits. That also means a paid leave program that does not unduly burden our businesses—either big and small.

Before us today are five proposals that have been presented as “improvements” to our program. Yet it is hard to see how that is the case.

Let’s start with the four employer mandate bills: These bills tell businesses that they have to pay 8 weeks paid parental leave or 6 weeks paid family leave or 2 weeks personal illness leave either out of pocket or with some half-baked, market-driven or tax-credit scheme that even conservative economists have lambasted. That’s right: Later we’re going to hear from an expert from the American Enterprise Institute –one of the foremost conservative think tanks in the world – that an employer mandate for paid leave is terrible for businesses and bad policy. It burdens our businesses with volatile – and potentially high and devastating –costs. And given our small size as a state, it is unclear that an insurance system for small businesses would be solvent and low-cost. And then there’s the issue that workers, particularly our minimum wage workers, would have to ask their employers not only to take leave but get paid for it.

It’s clear an employer mandate doesn’t work for everyone. It doesn’t work for large employers who don’t currently offer paid leave, it doesn’t work for small businesses, it doesn’t work for employees who don’t currently get paid leave. And according to statistics, that’s at least 85 percent of workers.

That said, some of the concerns raised during last year’s debate need to be addressed. This includes the unfortunate reality that a majority of the District’s private employees live outside DC, and we can’t operate like every other state and approve our own laws to cost-share between employees and employers for our program.  This approach most closely resembles other state programs; and it is a transparent way of showing how the economics of paid leave programs work.  So, yes, I would like to see Maryland and Virginia workers contribute.

But this is where being the nation’s capital – a federal entity in which Congress can exercise exclusive legislation – forces us to make different decisions than other cities and states. I want us to be like Los Angeles or Newark or my college town of Providence – but they don’t have a constitutional fight on their hands to split the cost.

But ultimately the question is not whether a commuter tax prohibition is unjust or whether we can convince the court this is a fee not a tax. The question is whether we want a workable paid family leave program that can be implemented soon. By challenging the Home Rule Act’s restriction on a commuter tax, we will most certainly be sued and that litigation could be held up in court for years.

And even if we prevail, Congress could step in and claim that given this impacts non-residents it is not an “essentially local District matter.” Make no mistake, Maryland and Virginia have a big financial interest in keeping a commuter tax prohibition in place. They said it in briefs filed when Mayor Williams sued on this very issue a decade ago.

Let’s be clear: This approach will put a paid leave program in jeopardy possibly forever.

Given this, a logical conclusion is that the current law is the path forward. I do believe there is also room for improvement and to address the concerns from our businesses who already provide paid leave to their employees.  I think the Council can craft a solution that works for them and ensures that the social insurance program is solvent.  This includes amending the current law to allow businesses who currently provide paid leave the ability opt-out after paying a regulatory fee.  This is how other states like California have managed their paid leave programs; and I think it something we should consider here in the District.

I want to thank all of the witnesses who are here to testify today, and I want to thank all of the advocates who have tirelessly championed for a paid family and medical leave program in D.C.

I’m looking forward to hearing today’s testimony.