Bringing paid family leave to Colorado workers was a top priority for Democrats when they took control of the statehouse last year. But after effective protests from the business community, the legislature settled instead for a study.
The study group – which included family leave proponents and small-business owners – met for seven months, commissioned three studies and wrote a 48-page report. But did they find a plan everyone can agree on? The short answer is no.
Legislation is expected again this session from Sen. Faith Winter, a Westminster Democrat who has run similar bills five times. The senator said she is still working out the details, this time using the task force report as a guide.
Last year’s proposal would have required paycheck deductions from all Colorado workers, as well as employer contributions, with the total of those two equaling 0.64% of a worker’s salary. The funds would have gone into an account run by the state Department of Labor and Employment, which would approve requests and dispense money to Coloradans who needed time off to have a baby, adopt a baby, care for a sick or dying loved one, or recover from a health issue. The annual cap was 12 weeks.
This year’s proposal remains unsettled, but if the thorough but contentious task force report is any indication, the legislation is likely to look different. And the battle is likely to once again get heavy.
Here are five points of contention the task force could not resolve:
A social insurance program vs. the private optionA “social insurance program” is one run by the state, and in this case, the state labor department. Under this option, the agency would have the task of deciding who is eligible for leave and calculating how much money they would receive while off work. (The task force recommendation is no more than 90% of a worker’s average weekly wage.)
Nine of the 15 task force members supported a social insurance program. A minority opinion stated that businesses should be required to purchase paid-leave insurance on the private market, similar to the way they choose health insurance plans for employees.
Other states with paid family leave, including California and New Jersey, use the state-run model.
Supporters say a major benefit of the state-run program is that Colorado – with a large pool of workers – could keep employee contributions equitable among men and women, and across industries from agriculture to education, according to Kathy White, deputy director of the Colorado Fiscal Institute and a task force member.
If a family-leave program were left to the private market, women of child-bearing age could have premiums as much as three times higher than their male counterparts, according to actuary reports presented to the task force. Industries that employ more women than men – including education and health care – could end up paying more. Older adults and people with disabilities also would cost more.
“The state program would be community-rated – it doesn’t matter if you are sick or a woman or a pregnant woman,” White said. “If the state says, ‘Let’s wash our hands of this and push it out in the private sector,’ it’s not like the cost is mitigated. It’s just borne by the consumer.”
On the other hand, passing a paid-leave program to the private sector would avoid creating another government bureaucracy, have lower startup costs, and allow for more efficiency and advanced technology to process claims, according to proponents of a private plan.
This fiscal note for last year’s legislation included a $110 million bond to kickstart family and medical leave, which was predicted to grow to a $1.2 billion program in 2024 as the premiums rolled in from state workers and employers.
Expect a major conversation on the social model versus the private one at the Capitol this year. “I feel like that is going to be a big discussion,” White said.
What will make the ongoing debate more interesting is that Gov. Jared Polis ignited the discussion on a private-sector model. As the task force was collecting public comments, the Democratic governor sent a letter asking the group to look into a family-leave program similar to the health insurance exchange.
In response, Pinnacol Assurance, which sells state-required workers’ compensation insurance, prepared a report for the task force showing what it would look like if Pinnacol took on the family- and medical-leave program.
There was one thing related to this conversation that the whole task force agreed upon, however. If Colorado were to create a state-run program, businesses that already offer family leave plans through the private market would be able to continue to do so. The task force recommended that businesses already offering a family-leave benefit could have their plan certified by the state and earn an exemption.
How to protect the job of workers who take leaveA key part of family- and medical-leave laws in other states is job protection: not only does a worker who gets a serious illness get paid when taking time off, but their employer must give them an equivalent position when they return to work.
Basically, an employer can’t retaliate by firing that worker or giving them a horrible schedule to make them quit. This was a major sticking point among small-business owners on the task force, who questioned how they could afford to find temporary workers to fill jobs, train them and let them go when their regular employee returned.
The federal Family and Medical Leave Act, which applies only to businesses with at least 50 employers, requires 12 weeks of leave – with job protection but no wage replacement.
Colorado’s task force was split on whether to exempt small-business owners and seasonal employers from any job-protection requirement. Seven of 15 members supported requiring job protection for employees with more than 120 days on the job, some citing research that people of color and low-socioeconomic status were most likely to lose their jobs when there is no job protection. Last year’s proposal put it at just 90 days.
Task force member Diana Petrak, who has owned small companies and recently founded the small-business advocacy agency Colorado Policy Pathways, said it’s often the business owner who has to fill a vacancy.
Serving as bookkeeper for three months when the bookkeeper is on leave, for example, doubles the workload for the business owner, but it’s often the most affordable way to solve a staffing issue. Many jobs require technical skills, certification or licensure that make them hard to fill for short terms.
Petrak, who was appointed by Republican legislative leadership and is a member of the National Federation of Independent Business, said her role on the task force was to speak up for small business.
The whole premise of the task force was to build consensus for the next family leave legislation, meaning those who are against the proposal were there to make it more palatable for the business community.
“I admire their goal to allow workers to take time off, but I don’t support doing it as a mandate,” Petrak said. “Fundamentally, we don’t want to see a mandate, and it’s important for us to communicate the risks that this poses on businesses.”
A potential compromise discussed by the task force was to exempt businesses with fewer than 15 employees from providing job protection.
The length of the leaveWhile last year’s legislation pitched 12 weeks of paid leave, the task force was divided on that number.
The group offered two proposals – a low-benefit model with a max of 12 weeks per year and a high-benefit model of 28 weeks. The vote on recommending the two options was split at 7-6.
Twelve weeks – six for medical and six for family leave per year – “would be the lowest in the country for combined leave,” White said. “But it’s a starting point.”
The length of leave is a side note for those who don’t support a mandated plan in the first place.
The failure of last year’s family leave legislation and the lack of a cohesive plan from the task force “should be evidence enough that either much more time is needed to study the issue or it should be abandoned,” Tony Gagliardi, Colorado director of the NFIB, said in an emailed statement. “Fat chance of the latter happening because paid leave is a political issue, not one inviting of practical policy discussions.”
Should employees and employers contribute?Last year’s legislation, Senate Bill 188, called for an employee-employer split to contribute to a family- and medical-leave fund. But the task force preferred a 100% employee-funded program, by an 8-5 vote.
A majority of the group recommended that if the state enacted an employer-funded program, businesses with 15 or fewer employees should not have to contribute.
The reason for the employee-only contribution is based on economists’ advice that workers ultimately bear the cost of a family-leave program anyway. Even when employers contribute, that cost is typically passed onto employees.
“With a 100% worker-funded program, workers will fully observe the costs they are paying and the benefits they receive,” the task force wrote.
Is now the right time?Those opposed to a family leave law argue that Colorado needs more time before jumping into what could become an intractable social program. Proponents, though, say such a program is not groundbreaking, since nine other states have similar laws and California has had one since 2004.
“I see so much opportunity for solutions that involve less risk,” said Petrak, the business advocate, noting that a growing number of companies – from small businesses to large ones including Google and Comcast – are beginning to offer family-leave benefits that they’ve designed. She suggested other ways to change workplace norms and culture, such as incremental policy initiatives that support young parents and working caregivers.
What works for businesses of 100 employees doesn’t work for businesses with 10 employees, so a statewide mandate will disadvantage small business, she said.
But White said other states have proved they can maintain solvent family leave programs. (New Jersey’s program wrote Colorado lawmakers to say as much). The task force report offers legislators a “very good framework for a solvent and sustainable family-leave program,” she said.
“We had unanimous decisions on 14 policy points,” White said. “We are not doing anything unusual or trendsetting here. We are just meeting a need.”
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