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Paid leave is gaining ground

Small businesses may soon be paying their employees while on leave. A bill introduced in Congress in March, and a second expected later this spring, as well as proposed laws in four states aim to expand the 14-year-old Family and Medical Leave Act. How? By creating insurance programs to pay employees on leave, and covering companies with as few as 25, 15, or even a single employee. At the same time, the Labor Dept., prodded by business groups including the Chamber of Commerce, the National Retail Federation, and the National Association of Manufacturers, has collected comments on the law in what it says is an attempt to clarify it. But FMLA supporters worry that Labor will end up restricting the law.

The bills have momentum thanks to a resilient economy, Democratic control of Congress, and a broad coalition of backers including the women's and labor groups that supported the original law, associations representing people with disabilities and diseases, and the well-organzied senior lobby. "These bills weren't getting any traction in Republican majorities, but with the Democrats they're getting a lot more attention," says Marc Freedman, labor law policy director with the U.S. Chamber of Commerce, which opposes expanding the law.

The FMLA mandates that companies with 50 or more workers provide unpaid leave of up to 12 weeks, with job protection, in the event of illness, childbirth, or adoption, or to care for a sick relative. Senator Edward Kennedy (D-Mass.) introduced a bill on Mar. 16 that would require all companies to offer six days' pay for sick leave or to take care of a sick child. Senator Christopher Dodd (D-Conn.) is expected to follow with a bill that calls for companies employing 25 or more to give six weeks of paid leave. The cost would be split among employers, employees, and the feds.

The proposed state laws also would apply to small companies, but most would fund the benefit through a payroll tax levied on employees. That money would go into existing unemployment or disability insurance treasure chests, or a new fund expressly for this purpose. "It has taken care of the most significant problem, since we know small businesses don't have a lot of extra cash," says Mark Watson, a Communications Workers of America union local rep in West Trenton, N.J., who has lobbied for that state's proposed bill.

Meanwhile, the Labor Dept. has posted about 16,000 comments on the FMLA on its Web site. The agency says it is now reviewing the comments. But whatever regulatory action it takes is not likely to turn the tide.

By Jill Hamburg Coplan

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