- The Washington Times - Tuesday, June 13, 2000

The U.S. Chamber of Commerce and two human resource groups plan to file suit against the Clinton administration to kill new rules that would allow states to tap into their unemployment insurance funds for paid family leave.

The chamber, the Society for Human Resource Management and LPA, a human resource trade group, accuse the administration of legislating through the back door. The groups say President Clinton's order could threaten the solvency of Unemployment Insurance Trust Funds and prompt states to raise taxes.

The Department of Labor is trying "through a regulatory fiat … to basically shoehorn their own philosophical approach into the law," said Susan Meisinger, chief operations officer for the Society for Human Resource Management in Alexandria, Va.

The new program which will go into effect in 60 days is voluntary and will affect only new parents. States may adopt it and then determine who is eligible, the length of leave and level of payment.

Estimates of the program's cost vary widely because of its flexibility. While the Labor Department estimates the annual cost at $196 million nationwide, the trade groups claim it could reach $28 billion per year.

Fifteen states, including Maryland, have introduced legislation to accept the program, which will be published today in the Federal Register. The Labor Department will evaluate the regulation after three states have used it for four years.

The proposal is separate from the Family and Medical Leave Act of 1993, which gives workers 12 weeks of unpaid leave for such circumstances as caring for a new baby or a sick relative.

Mr. Clinton announced the order Saturday, and the trade groups will file suit within the next 60 days, Ms. Meisinger said.

Michael Bartlett, manager of labor law policy for the chamber, noted that the issue is the administration's method for enacting the rule and the source of funding not whether leave should be paid or unpaid.

Cory Siansky, a spokesman for LPA, whose members are human resources professionals at large companies, agreed.

"At the end of the day, no one has articulated where this extra money is going to come from," he said.

He said employers will have to pay for the program if states raise unemployment insurance taxes. The taxes are not passed on to employees, but some analysts believe salaries are affected.

Ms. Meisinger said the unemployment insurance funds are flush in many states because of the booming economy.

"It looks like free money. [But] when the economy turns, what's going to happen to the safety net?" she said.

A Labor Department spokeswoman believes states that adopt the program will use funds responsibly.

"What we're doing is allowing them to provide this benefit if they choose and make prudent decisions," said Sally Paxton, deputy solicitor for national operations for the agency.

The regulation is flexible to let states decide what level of funding they can tolerate, she said.

Ms. Paxton added that a labor study found "providing these short-term benefits can increase the attachment to the work force," so new parents will return to work.

"This is a really good time, given how strong the economy is, to implement a program like this," said Vicky Lovell, a study director with the Institute for Women's Policy Research, a nonprofit, nonpartisan think tank.

States have been giving employers tax reductions or rebates in unemployment insurance taxes, Ms. Lovell said.

Her organization wants to see broader paid leave go into effect, but this is a "good start," she said.

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