District lawmakers’ support for a proposed landmark law giving workers 16 weeks of paid family leave appeared shaken Thursday after a series of reports showed disagreement over how much the benefit would cost local businesses.
Mayor Muriel E. Bowser’s administration released the first of the reports, a study funded by the Obama administration. And to the delight of proponents, it showed that salaries of every worker in the District who would take paid time off for the birth of a baby or to care for a dying relative could be covered for about the cost of a proposed 1 percent salary tax on employers.
Within a few hours, however, it wasn’t clear that the lawmakers believed those figures, which found that the initiative could cost $300 million.
Aides to Bowser (D) distanced the mayor from the study funded with a Department of Labor grant. A Washington-area business group presented a competing study to the D.C. Council, claiming that the costs would be north of $700 million, or 150 percent higher. Meanwhile, Jeffrey DeWitt, the District’s chief financial officer, said the total price tag could top all business taxes collected annually in the city, but that still may not be enough to cover costs. And in perhaps the most stunning moment of the debate, a top researcher at the left-leaning Urban Institute said that even D.C. business owners had underestimated the costs. The price could top $1.3 billion a year, he estimated, or five times the cost that the researchers funded by the Obama administration had concluded.
The conflicting reports illustrate a major step back for the proposal, which was enthusiastically supported by the Obama administration and would be the most generous family leave law in the country.
The barrage of conflicting reports and figures left even the bill’s authors publicly searching for ways to dial back a plan proponents unveiled with great fanfare last fall, when a majority of the D.C. Council signed on as co-introducers and the council appeared poised to fast-track legislation that could give European-style benefits to city residents and have ripple effects nationwide in a presidential election year.
Democratic frontrunner Hillary Clinton lauded the 16-week paid family leave bill late last year on social media, and even some Republican candidates have weighed in, saying that although government should be less involved than what D.C. has proposed, the country must do more on the issue to help working families.
On Thursday, for the first time, the D.C. Council confronted the difficulty of determining the true potential cost of the benefit.
Top aides to Bowser, who testified even before the most confounding information was presented, urged the council to slow down and, in fact, stand back while the mayor’s office took the lead in forming a working group to study the possible costs to businesses. City Administrator Rashad M. Young said the mayor’s administration needs time to analyze family leave costs in connection with a proposed initiative for the November ballot that could raise the minimum wage in the city to $15 per hour.
Council Chairman Phil Mendelson, who will be in charge of crafting the final legislation, said he would not abdicate the council’s role in deciding whether to move forward on family leave to the mayor. But as the day wore on, he was increasingly critical of advocates, saying they would have to do better at analyzing the potential costs. “You all are talking about the benefits,” he said, “but the benefits of leave are not the challenge before us. . . . The issue this council faces is the cost.”
Under the legislation, almost every part-time and full-time employee in the city would be entitled to 16 weeks of paid leave to bond with an infant or an adopted child, recuperate from a military deployment, tend to an ill family member or recover from an illness.
Salaries would be reimbursed at 100 percent for those who make up to $52,000 a year, maxing out at $3,000 per week.
The benefit would be paid through a fund that all private employers would have to pay into, as would federal employees, because the District cannot legally tax the federal government or compel it to contribute on behalf of its employees.
The District’s plan would dwarf the handful of paid family leave programs in existence nationwide, which now max out at six weeks of partial salary reimbursement in California and New Jersey.
A major point of contention centered around just how many employees in the city would avail themselves of paid leave if it were offered.
There wasn’t much disagreement about the group that has become the face of the initiative: mothers of new babies, seeking time to bond.
In 2014, about 10,000 women in the District took at least some time off to care for new children. Proponents said the number taking leave could rise to about 12,500, or 99 percent of all new mothers and some fathers under the plan. Proponents and critics also agreed that family leave would likely not encourage more city residents to have children or have a measurable effect on the city’s birthrate.
But advocates and business leaders differed on estimates of how many new fathers would put in for the paid leave to spend with newborns if it were covered at 100 percent of salary. And the two sides had wildly different assumptions about how many people would take time off to care for a dying relative and, especially, how many would seek paid time off for a personal illness and for how long.
Testimony presented Thursday made clear that a major problem for the District’s plan is rooted in how it would stand up the equivalent of a state temporary disability system under the umbrella of a family leave program.
Even though new mothers have packed the District’s council chambers with strollers and crying infants, the majority of leaves would be by workers who take time off for personal illnesses.
Advocates for the bill, titled the Universal Paid Leave Act, said that despite the costs, medical leaves should remain included because such cases are the leading cause of personal bankruptcies and because low-income workers often have the fewest resources to hold on to a job when they are struck by a major illness.
Politically, the debate presented a new challenge for Bowser as Young, her city administrator, at one point suggested that the council consider tabling the idea and wait for a national policy on paid family leave to come from Congress.
David Grosso (I-At Large), a co-author of the bill, fired back that it could take 50 years for Congress to act, and he questioned from the dais how Young could propose that “with a straight face.”
Bowser’s reluctance to quickly embrace an ambitious family leave program could further strain her relationship with liberals and progressives, some of whom have questioned whether she is too cozy with business interests since she reversed course and backed a merger of Pepco, the city’s electric utility, with Exelon, a Chicago-based nuclear energy giant.
Some even said the mayor’s office contributed to weakening prospects for the bill.
The Labor Department has encouraged local jurisdictions to do what a Republican-led Congress likely won’t by advancing aggressive new paid-leave policies on the local level, calling them important to closing the economic divide between the rich and the working class.
The $100,000 report by the Institute for Women’s Policy Research was delivered to Bowser’s administration in mid-November, and the president of the organization said she was promised that it would be made public a few days later. But it was kept under wraps until this week and made public only as competing proposals were by groups that have urged Bowser to move more slowly.
Bowser spokesman Michael Czin said the administration was busy vetting the Women’s Policy Research group’s report through the holidays. He also said the administration would propose further study in testimony before the council Thursday.
Heidi Hartmann, president of the Institute for Women’s Policy Research, said her organization modeled the likely costs to the city after the experiences of New Jersey and California, which have had smaller paid family leave programs for years.
The model of Hartmann’s group predicted that 110,000 people in the city would take paid leave in the first year, compared to roughly 100,000 who do so now. Less than 13,000 of those would be for maternity and bonding with new children. Less than 20,000 would be for taking care of family members, and almost 50,000 would be for workers dealing with their own medical problems.
The total cost in benefits paid would be about $281 million, according to an analysis by the organization.
The District currently requires businesses with 20 or more employees to grant workers the right to take as many as 16 weeks of unpaid family leave and 16 weeks of unpaid medical leave in a 24-month period. The city also requires employers to provide three to seven days of paid sick leave a year, depending on the size of the company.
D.C. government employees may receive up to eight weeks of paid leave under a measure passed two years ago.
The Institute for Women’s Policy Research said the costs of increasing all of those benefits to 16 weeks of paid leave were manageable, with a 0.63 percent tax on employers.
“Based on the experiences of states that provide paid family and medical leave, and the simulation model results reviewed, D.C. could set up and administer any of the programs examined for less than 1 percent of payroll,” the report said.
A report prepared for the Greater Washington Board of Trade disputed that. It found that the total costs could exceed $700 million annually and require a much larger tax increase on employers.
Jim Dinegar, head of the board, said that the organization was willing to work on a compromise but that proponents must consider the regional effects if businesses in Maryland and Virginia do not have to provide comparable benefits and pay similar costs.
Grossosaid he was willing to adjust the benefits so that employers pay no more than 1 percent of payroll to provide the benefit.
“We can do this,” he said.