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State Policy News
House Committee Passes CACI-Opposed “FAMLI” Bill
On Tuesday, the CACI Governmental Affairs Council agreed to make defeat of the so-called “FAMLI” bill, HB-1258, a priority for defeat. Last year, a similar bill died at the end of the session.
The House Health, Insurance and Environment Committee yesterday amended and gave the bill its first committee endorsement on a party-line, 7-6 vote, which sends the measure to the House Finance Committee.
The bill would create a worker-funded, State-administered insurance program to provide wage-replacement, family-and-medical leave. The “short title,” of the measure is “family and medical leave insurance,” hence the bill is known as the FAMLI bill. All workers, both public- and private-sector, would be required to pay into the program’s fund.
Workers could receive up to 12 weeks annually of a wage-replacement amount. Workers would be required to pay a premium into the fund based on their annual wages.
The insurance program would be administered by the State. The bill would create a new division within the Colorado Department of Labor and Employment (CDLE).
HB-1258 is co-sponsored by Democratic Representatives Joe Salazar (Thornton) and Faith Winter (Westminster). The bill is entitled “Concerning the Creation of a Family and Medical Leave Insurance Program.”
CACI strongly opposes HB-1258 for many reasons beyond its objection to the creation of a massive new program within Colorado State Government, including the following:
- Although HB-1258 would not require that employers contribute to the fund, it will place an unfunded mandate on them to administer the program for their workers.
- An employer would be required to return the worker, who had taken leave, to his or her original position or place the employee in an equivalent position.
- A worker can bring a private “right of action” against an employer: “An aggrieved employee may bring an action in state court against the employer to recover damages or equitable relief.”
- The bill, if enacted into law, could eventually lead to political pressure in the legislature to require that employers contribute to the fund.
- The bill contains a provision that workers who contribute to the fund could also face a “solvency surcharge” if the fund was in danger of becoming insolvent. Again, employers could fact political pressure in the legislature to require them to contribute to the fund to prevent its insolvency.
Loren Furman, CACI Senior Vice President, State and Federal Governmental Relations, testified before the Committee in opposition to the bill. Here’s an edited version of her prepared testimony:
CACI is opposed to HB-1258. We have several concerns not just on behalf of the employers we represent but on behalf of their employees.
Concerns for employers:
- This bill is significantly different than the Federal Family Medical Leave Act (FMLA) that employers with 50 or more workers have followed since 1993.
This bill is a mandate on any size of employer–even a company with one or two employees.
So, all employers would be required to set up payroll-deduction plans and employers don’t have a “one-size fits all” payroll program.
Most concerning to CACI is the requirement that an employer guarantee the worker the same or equivalent position after he or she takes the leave. How can an employer with one or two workers afford to hire someone temporarily while continuing to pay the other worker, who may be gone for up to 12 weeks?
- The bill as drafted also appears to allow someone to collect Unemployment Insurance at the same time as collecting paid family-medical leave.
Based on the ability to collect both of those benefits, CACI is concerned that there would be no incentive for someone to return to work.
Additionally, the bill appears to allow someone to use paid medical leave–and then can later use FMLA leave if they become eligible, which creates the potential of leave for longer than 12 weeks.
- Let’s talk about the impact to employees.
This is a huge government program that had a half-billion-dollar fiscal note last year and has a significant cost this year.
Based on failures in other states that inaccurately projected employee participation, Colorado should not assume that all workers will participate.
Employees are subject to “solvency surcharge” if the program’s fund becomes insolvent, thus forcing them to pay even more to keep the program’s fund afloat.
How is it fair for some employees to pay more to cover those who are not participating?
We also are concerned that, if there isn’t enough money in the fund to keep the program solvent, then the legislature will ask the business community to fund it!
Only three other states–California, Rhode Island and New Jersey—have similar programs. In California, the law was adopted in 2002 and research has shown that the program is woefully underutilized while the State continues to pay for it.
In fact, California is spending money on outreach and marketing to get more people to take advantage of the program!
Additionally the three states have a much lower amount of leave time allowed and are also funded by payroll taxes through the state’s respective disability programs.
Surveys by CACI and the Mountain States Employers Council have found that employers offer significant amounts of leave benefits.
Employers do a very good job of accommodating their employees’ needs;
The legislature should not mandate a policy for leave because there is no “one size fits all” approach that covers every company’s situation.
Every employee’s needs are different, and the best solution is to continue to allow employers and employees work out solutions that work best for both parties.
In addition, CACI is part of a large business coalition that has united to work to defeat the bill.
The bill’s fiscal note, issued Wednesday, contains a lengthy analysis of the complex, 20-page bill:
Summary of Legislation
This bill creates the Family Medical Leave Insurance Program (FMLI) in the newly created Division of Family and Medical Leave Insurance (division) in the Colorado Department of Labor and Employment (CDLE). The FMLI program provides partial wage replacement benefits to eligible individuals who are unable to work due to their own serious health condition, or who take leave from work to care for a new child or a family member with a serious health condition. Prior to establishing the FMLI program, the division will conduct an actuarial evaluation to determine the amount of premium required to support the FMLI program and the fund balance necessary to maintain the FMLI program’s solvency. The actual evaluation must be completed by July 1, 2016, at which time the division will establish rules and procedures to administer the FMLI program including development of an outreach program to educate the public.
Beginning January 1, 2018, every individual employed by an employer will begin paying a premium based on a percentage of annual wages through a payroll deduction to the FMLI Fund. If the FMLI program director determines that a solvency surcharge is required to ensure the solvency of the FMLI Fund, employees will pay that amount through a payroll deduction as well. A self-employed person may elect to purchase coverage for an initial period of not less than three years.
FMLI benefits will be payable to covered individuals beginning one year after the division begins collection of premiums January 1, 2019. The amount of weekly benefits is based on the individual’s income and is capped at $1,000 per week for up to 12 weeks in a 12-month period. Claimants with lower incomes will receive a higher percentage of their weekly wage than claimants with higher incomes. The division director can adjust the benefit caps over time according to the Consumer Price Index. Benefits received are not subject to state income tax but may be determined to be subject to federal income tax. Leave taken runs concurrently with leave taken under the FMLA or the state Family Care Act which expands Family and Medical Leave Act (FMLA) eligibility to include partners in civil unions and domestic partnerships. A claimant cannot receive benefits from multiple sources (e.g. workers’ compensation, unemployment insurance, disability insurance) that exceed his or her actual wages.
Employers covered by the federal FMLA include private employers with at least 50 employees, all government agencies, and elementary and secondary schools, regardless of the number of employees. To be eligible for FMLA, an employee must work 1,250 hours. Under FMLI, an employee is eligible if employed for 680 hours. The bill expands the employment protections from the FMLA to private employers with fewer than 50 employees by requiring that an employee be restored to an equivalent position of employment with the employer after taking leave and receiving FMLI benefits.
The division is required to provide annual reports beginning September 1, 2018, to the General Assembly on projected and actual FMLI program participation, and other details about the FMLI program.
Premiums are deposited into, and all benefits and administrative expenses are paid from, the newly created FMLI Fund. The division is established as an enterprise and premiums are not considered state revenue for purposes of Section 20 of Article X of the Colorado Constitution (TABOR). The General Assembly and the Governor must approve the division’s authority to issue revenue bonds by a separate bill or joint resolution.
The division director is authorized to assess a fine up to $3,000 for violations of the bill. If an employer violates the employment protection provisions of the bill, the aggrieved employee may bring action in state court against the employer to recover damages and equitable relief as specified under the FMLA.
The federal FMLA entitles eligible employees of covered employers to take up to 12 weeks of unpaid, job-protected leave for specified family and medical reasons, with continuation of group health insurance coverage under the same terms and conditions as if the employee had not taken leave. Employees may use sick time, vacation time, or other accrued leave time along with FMLA leave in order to continue being paid. The employer must have at least 50 employees within 75 miles of an employee’s worksite for the employer to be subject to FMLA requirements.
Three states: California, New Jersey, and Rhode Island currently have paid family leave programs. California’s began in 2002, New Jersey’s in 2008, and Rhode Island’s in 2013. The family leave programs operate in conjunction with each state’s temporary disability insurance program. The programs are funded through employee contributions which range from a maximum of $31.50 per year in New Jersey, to $770 per year in Rhode Island, and $1,120 in California. These states, as well as New York and Hawaii, operate temporary disability insurance programs; Colorado does not.
For news media coverage of HB-1258, read:
“Mandatory medical-leave bill passes first Colorado legislative committee,” by Ed Sealover, The Denver Business Journal, March 19th.
“’FAMLI’ Bill Finally Introduced: Déjà vu All Over Again,” CACI Colorado Capitol Report, March 6th.
“Bill to create Colorado employee medical-leave program reintroduced,” by Ed Sealover, The Denver Business Journal, March 5th.
For information on HB-1258, contact Loren Furman, Senior Vice President, State and Federal Governmental Relations, at 303.866.9642.
Local-Government, Minimum-Wage Bill Finally Introduced
The long-awaited bill to allow local governments to set their own minimum wages was introduced into the House Thursday and assigned to the State, Veterans and Military Affairs Committee.
HB-1300 would allow a local government to set the minimum wage within its jurisdiction. This proposal would eliminate current law that says local governments cannot do this.
The CACI Labor and Employment Council will examine this bill and determine CACI’s position. It’s clear that the bill presents the business community, especially those companies that have operations in multiple jurisdictions, with a major administrative headache, in addition to increasing labor costs for businesses in those jurisdictions.
One could be forgiven for thinking that this bill should have been assigned by Speaker Dickey Lee Hullinghorst (D-Boulder) to the House Business Affairs and Labor Committee. Instead, the Speaker assigned it to a committee that is commonly known as her “kill committee.” Members of a kill committee are almost always from a safe district and thus will not likely face retribution from the voters for killing bills that a Speaker does not want to advance to the House Floor.
But a kill committee can place the opposite role for a Speaker: approve a bill that might be killed if it had been assigned to a more logical “committee of reference.” If it had been sent to the Business Affairs and Labor Committee, then one Democratic lawmaker could vote with the minority Republicans to kill it.
In 2006, the voters approved Amendment 42, a ballot initiative that amended Article XVII of the Colorado Constitution to increase the state minimum wage from $5.15 per hour to $6.85 per hour and then to increase it annually by the rate of inflation. The measure was approved by 53.3 percent of the voters.
The current minimum wage is $8.23 an hour this year, effective January 1, 2015. The Colorado Department of Labor and Employment (CDLE) is charged with annually adjusting the state minimum wage.
For information on HB-1300, contact Loren Furman, Senior Vice President, State and Federal Governmental Relations, at 303.866.9642.
News Media Coverage
Below is recent news-media coverage of state and federal political, policy and governmental issues of interest to CACI:
“Colorado state budget forecast leaves business bills, transportation funds in trouble,” by Ed Sealover, The Denver Business Journal, March 18th.
“Construction-defects reform bill gets first Senate approval,” by Ed Sealover, The Denver Business Journal, March 18th.
“Reimbursement battle between doctors, insurers could reach Legislature,” by Ed Sealover, The Denver Business Journal, March 18th.
“Budget bill delayed up to a week; conference committee to meet,” by John Frank, The Denver Post, March 17th.
“As construction-defects showdown looms, related bills meet their fate at Colorado statehouse,” by Ed Sealover, The Denver Business Journal, March 16th.
“Colorado legislators pass expanded audit of health insurance exchange,” by Electa Draper, The Denver Post, March 16th.
“Bills coming Monday would raise minimum wage city or statewide vote,” by Joey Bunch, The Denver Post, March 15th.
“Stalemate at the statehouse,” by Ed Sealover, The Denver Business Journal, March 13th.
“5 Colorado legislators to watch in the 2nd half of the 2015 session,” by Ed Sealover, The Denver Business Journal, March 13th.
“Ed Sealover on business consequences of a partisan stalemate,” Kathleen Lavine, The Denver Business Journal, March 13th.
Transwest Joins CACI as a Silver Partner
CACI would like to welcome its newest Silver Partner, Transwest, Inc. Transwest has a diverse group of transportation products and service to meet both business and personal requirements. It offers sales, parts, service and finance for nearly every segment of the transportation industry. Under current ownership since 1990, the company has enjoyed consistent growth and expansion beyond its original Colorado footprint.
The company serves the needs of a broad cross section of industries across the United States and Canada. Transwest’s dealership operations represent the Freightliner, Western Star and Isuzu brands in Colorado and also GMC and Buick in the metro-Denver area. Transwest also sells several heavy commercial-trailer product lines at locations in Colorado and Missouri, and sells RVs and horse trailers at a facility in northern Colorado. The company has manufacturing facilities in Kansas and Colorado that produce a number of specialized truck bodies under its own Summit brand. And, most notably, Transwest has a prominent national presence in the transportation-finance sector through its Trans Lease subsidiary.
Thanks to CACI Board Member David Dean, CEO of Miller International, who introduced Transwest to CACI.
CACI Backs Workforce Development Bills
Earlier this week, CACI’s Government Affairs Council voted to support several workforce development bills currently under consideration by the state legislature. The bills are designed to ensure that the state’s labor market is meeting the needs of employers in a variety of industries including manufacturing, construction, energy, healthcare, and information technology. CACI’s position comes after a survey of manufacturers conducted by CACI’s Colorado Manufacturing Initiative (CMI) which showed strong support for many of the bills.
HB 15-1170 Increasing Postsecondary and Workforce Readiness would create a statewide coordinator to work with schools and businesses to increase students’ readiness to continue their education or enter the workforce. It assigns equal value to four-year degree programs, community college programs, and career and technical education programs. The bill has passed out of the House Education Committee and will be heard next by the House Appropriations Committee. 77% of the 30 manufacturers who responded to the CMI survey support this bill.
HB 15-1227 TAX CREDIT FOR EMPLOYERS THAT PAY STUDENT LOANS would offer an income tax credit for employers who pay a portion of their employees’ student loans if the employee studied a STEM field, has worked at the company for more than one year, and earns an annual salary below $60,000, among other requirements. This bill has passed out of the House Finance Committee and will now be heard by the House Appropriations Committee. 67% of the 30 manufacturers who responded to the CMI survey support this bill. Patrick Pratt, Program Manager of the CMI was quoted by the financial website credit.com as saying, “[This bill is] good for employers because it gives them a competitive advantage for attracting new workers. It’s good for employees because it helps alleviate their student loan burden.”
HB 15-1230 INNOVATIVE INDUSTRY WORKFORCE DEVELOPMENT PROGRAM would incentivize employers to offer internships by reimbursing a portion of the cost to employers of hiring an intern. This bill will be heard by the House Business Affairs and Labor Committee next Thursday, March 26. 73% of the 30 manufacturers who responded to the CMI survey support this bill.
HB 15-1270 PATHWAYS IN TECHNOLOGY EARLY COLLEGE HIGH SCHOOLS “authorizes the operation of a limited number of pathways in technology early college high schools (p-tech schools) in the state. A p-tech school enrolls students in grades 9 through 14 in an educational program that focuses on science, technology, engineering, and mathematics. The p-tech school combines high school and college-level course work with workplace educational experiences. A student who graduates from a p-tech school is expected to graduate with a high school diploma and an associate degree in applied science.” This bill passed out of the House Education Committee with bipartisan support and will be heard next by the House Appropriations Committee. In testifying in support of this bill, Patrick Pratt described it as one of the most exciting ideas legislators will consider this year due to its potential to address the state’s workforce needs through true collaboration between industry and academia. 77% of the manufacturers who responded to the CMI survey support this bill.
HB 15-1275 CAREER AND TECH ED IN CONCURRENT ENROLLMENT would clarify that coursework done by a student toward the completion of an internship or apprenticeship would be eligible for credit under concurrent enrollment. This bill will be heard by the House Business Affairs and Labor Committee next Tuesday, March 24. 73% of the manufacturers who responded to the CMI survey support this bill.
HB 15-1276 SKILLED WORKER OUTREACH, RECRUITMENT AND TRAINING (WORK Act) would offer matching grant money to organizations that offer training for skilled workers to assist in their outreach, recruiting, and training efforts. This bill passed out of the House Business Affairs and Labor Committee with bipartisan support and will be heard next by the House Appropriations Committee. In testifying in support (skip to the 1:38 mark) of this bill, Patrick Pratt identified the “pieces of the puzzle” that are already in place to address Colorado’s workforce issues and likened this bill to the “glue to cement the pieces in place.”
Stay tuned for further updates as these bills work their way through the legislative process.
For information on the workforce-development bills and the CACI Colorado Manufacturing Initiative, contact Patrick Pratt, Program Manager, at 303.656.6915.
Federal Policy News
CACI Files Comments Opposed to EPA’s NAAQS Ozone Rules
CACI filed official comments with the EPA Monday, March 16th, with regards to the National Ambient Air Quality Standard (NAAQS) ozone rules that would lower ozone standards from 75ppb to somewhere between 65ppb – 70ppb, or as low as 60ppb. CACI strongly opposed the EPA’s recommendation and outlined the business case for retaining the current standard.
Background: The EPA’s proposed ozone standards were drafted on the premise that reduced ozone levels would create positive health benefits, and because of this public health clause, the EPA would therefore not have to consider economic costs or job losses under the Federal Clean Air Act.
CACI’s comments including the following points:
- Address the shaky science used by the EPA to justify a lower standard for health benefits;
- Point out a lack of correlation between ozone reductions and mortality reductions, particularly where a larger body of evidence shows either no correlation or negative health benefits from further reducing ozone levels;
- How one-size-fits-all regulation does not fit Colorado, and;
- Demonstrate how regulatory burdens will create massive economic stressors and job losses.
In fact, CACI pointed to numerous studies showing that the negative health-effects of job losses, if the new standards are implemented, are projected to be almost 40 times more than the positive health benefits of a 10ppb reduction in ozone.
Because of projected costs on health and the economy, CACI reiterated its support for retaining the current standard of 75ppb.
Thanks to due to members of the CACI Federal Relations Council, the CACI Energy and Environment Council, and more specifically, the latter’s CACI Air Quality Committee for their efforts to engage on the ozone issue, lend expertise and add credibility to CACI’s argument before the EPA. The deadline for filing was Tuesday, March 17th.
CACI members with comments or questions should contact Leah Curtsinger, CACI Federal Policy Representative, at 303.866-9641.