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State Policy News
Paid Family-and-Medical Leave, Retirement Security Bills Expected Soon
Picking up again after failing in recent legislative sessions, House Democrats are advocating at least two bills that seek to boost the economic welfare of low-wage workers.
At a news conference at the State Capitol on Wednesday, proponents touted two bills, which would:
- Establish a worker-funded, but state-administered, retirement system.
- Create a state system of paid family-and–medical leave for all workers.
The two bills seek to address in different ways the larger Democrat goal of tackling the issue of income inequality, which is part-and-parcel of their national and state strategy of hammering the business community on the issue, whether it’s on the campaign trail or in the U.S. Congress or in state legislatures.
Paid Family-and-Medical Leave
Representative Faith Winter (D-Westminster) will sponsor the family-and-medical leave insurance bill, which would establish a worker-funded system run by the State of Colorado. A 20-page draft has been made available to CACI.
The most astounding aspect of this proposal is that it would apply to every worker in the state, both private and public sector: “Every individual employed by an employer in this state shall pay a premium in an amount to be determined by the director” of the insurance program.
In effect, workers with paid-leave policies would be forced to subsidize workers at companies without such policies.
The program would be analogous to the state’s workers’ compensation insurance system and unemployment insurance system, but workers would pay the insurance premiums in this case while employers pay the premiums for the` two established systems.
In addition, every employer would be mandated to administer the plan without receiving any funds from the insurance program to offset costs.
According to the summary of the draft bill, the “family and medical leave insurance (FAMLI) program” would be placed in a newly created “Division of Family and Medical Leave Insurance Division” within the Colorado Department of Labor and Employment (CDLE).
FAMLI would “provide partial wage-replacement benefits to an eligible individual who takes leave from work to care for a new child or a family member with a serious health condition or who is unable to work due to the individual’s own serious health condition.”
To take advantage of this program, a worker, known as a “covered individual,” first would have to put in 680 hours of work, which is 17 weeks, for at least one or more employers during the worker’s “qualifying year.” The worker would then have to contribute premiums for one calendar year. The worker could then take off up to 12 weeks per year.
The CDLE would be required to conduct an actuarial study to “determine the appropriate level of premiums and solvency charges, if necessary, to ensure the soundness of the program.” To pay for the actuarial study and to set up the program, the FAMLI Division “ . . . may apply for and accept gifts, grants, and donations . . .”
The bill draft summary states: “Each employee in the state will pay a premium determined by the director of the division by rule, which premium is based on a percentage of the employee’s yearly wages.”
The FAMLI Division would be created as a state enterprise whose revenues from workers’ premiums would not be considered state revenue and thus would not be subject to TABOR. The FAMLI Division could then issue bonds against the stream of workers’ contributions to the Division.
After interviewing CACI’s Loren Furman about this proposal, Ed Sealover, statehouse reporter for The Denver Business Journal, wrote yesterday:
But Loren Furman, senior vice president of state and federal government relations for the Colorado Association of Commerce and Industry (CACI), said that small businesses especially would have a hard time implementing the proposed law.
Many won’t have the resources to keep a position open or find a temporary replacement for as long as 12 weeks, she said. Also, she added, the revenue stream to operate the system may not be sustainable, and some workers will feel cheated having to pay into the system even if their employer already offers long-term family leave.
“We have very similar concerns as we did in past years,” Furman said. “This will still require every employer to allow a worker 12 weeks of leave regardless of the type of business that they operate. Some employers don’t have the flexibility to offer that.
Meanwhile, one CACI member reached out to CACI yesterday to comment on the proposal. Mark Welle, CEO of Wesco Laser Machining, wrote:
Even though there is an attempt at “self-funding”, the major problem with this proposed bill, as you pointed out, is small businesses having to save a job for 12 weeks or more. It is hard enough to find qualified employees to fill a full time job. But virtually impossible to find a temporary employee with the skills needed to take an assignment and not expect “full time” status. The only manufacturing businesses that can afford to offer this type of benefit are the companies with more than 500 employees. But, as you know, most of these large businesses already offer this type of benefit.
Retirement Security
Representative Brittany Pettersen (D-Lakewood), House Majority Whip, will propose a bill to create a state-chartered retirement system for low-income workers whose employers do not offer retirement plans. Workers would contribute a portion of their compensation. A complex, 28-page draft has been made available to CACI.
Last year, Representative Pettersen pulled her bill because of the very large fiscal note. In the 2015 session, the Republican-controlled Senate killed a bill to create a task force to analyze the issue.
According to the summary of the bill draft, the proposal would create the “Colorado secure savings plan” for private-sector workers using an “automatic enrollment payroll deduction individual retirement account.”
The plan, which would be governed by a nine-member board, would be a “trust outside of the state treasury.”
Employers would be required to automatically enroll workers in the plan, unless the worker opts out. As with the family and medical leave proposal, employers would be required to administer the program and would not be reimbursed for the cost.
The primary intellectual horsepower behind this idea comes from The Bell Policy Center.
More Information
For more information on the forthcoming bills, contact Loren Furman, CACI Senior Vice President, State and Federal Relations, at 303.866.9642.
For news media coverage of these two proposals, read:
“Paid family leave, retirement-saving measures are coming back to the Colorado Legislature,” by Ed Sealover, The Denver Business Journal, March 1st.
Federal Policy News
CACI Federal Council Hosted Congressional Staff to Talk Priorities in U.S. Senate, House
On February 14, CACI’s Federal Policy Council gathered to talk all things federal politics, particularly where new Trump Administration policies and campaign promises intersect with Congressional and Colorado priorities.
Guest speakers for the 2017 kick-off council were Chuck Poplstein, U.S. Senator Cory Gardner’s (R-CO) State Director, and Ashley Verville, U.S. Representative Ed Perlmutter’s Communications Director.
These Congressional staffers provided Senate and House perspectives on Affordable Care Act repeal and replace efforts (‘timeframe for changes are anyone’s guess’), tax reform (essential for businesses and in serious need of reform, delegation wants to know what’s important to CACI members), infrastructure investment (waiting for details of proposals to determine how priorities will be balanced and paid for), and the newly-assigned committees for U.S. Sen. Cory Gardner and U.S. Representative Ed Perlmutter.
For the 115th Congress, Gardner will serve on the following committees:
Energy & Natural Resources
Commerce, Science & Transportation
Committee on the Budget
Foreign Relations
- Subcommittee Chairman on East Asia, the Pacific, and International Cybersecurity Policy
Rep. Perlmutter will serve on the following committees:
Financial Services
- Subcommittee on Terrorism & Illicit Finance
Space, Science & Technology
- Subcommittee on Space
- Subcommittee on Oversight
Presidential Executive Orders: Where Businesses Should Pay Attention
CACI’s Federal Policy Director, Leah Curtsinger, took time during the February 14 Federal Policy Council to present about Presidential Executive Orders, particularly looking at what the orders accomplish, where they stand and why it’s important for CACI members to be “in the know.”
To read more about these Executive Orders and Presidential Memorandums, click here.
If you have questions or comments, please contact Leah Curtsinger, CACI Federal Policy Director at (303) 866-9641.