Issue

Should Minnesota expand its parental leave law, enact a paid leave program to pay for time off after the birth or adoption of a child, or create new employee leave options?

Policy

The Minnesota Chamber believes that employers, in consultation with their employees, should have sole responsibility to determine the type and scope of benefits that will meet the diverse needs of their workforce. As such, additional leave should not be mandated but rather left to employers to handle on a company-by-company basis. For example, the Chamber:

• Opposes enacting a paid parental leave program no matter how it is financed. The need for a paid parental leave program has not been demonstrated.  According to the U.S. Department of Labor’s 2000 Update of the Family and Medical Leave Survey, a significant minority of employees expressed a need for parental leave that as yet remains unmet. The survey concluded that only 0.17 percent of the workforce needed parental leave but were unable to take it due to financial reasons. 
• Opposes expanding Minnesota’s parental leave law by increasing the number of weeks allowed or by increasing the number of employers it covers. The decision on whether to allow additional leave should be left solely to employers and their employees. Given Minnesota’s demographics and competitive labor market, employers are adding benefits that will help attract and retain employees.
• Opposes changing how sick leave benefits are structured and applied. Since many employers already address how employees can use myriad benefits for sick leave, it is not necessary for the Legislature to mandate specific “paid sick leave” accrual programs for employees. For example, during the 2007 legislative session, a bill was introduced that mandated employees accrue paid sick leave; depending on whether an employee worked for a large or small business, an employee would accrue one hour of paid sick leave for every 40 or 80 hours worked, respectively.

The Chamber supports clarifying Minnesota’s leave laws so combined state and federal Family and Medical Leave Act (FMLA) leave cannot exceed 12 weeks.  In some instances, the interaction of Minnesota’s law and the FMLA results in up to 18 weeks of unpaid leave, six weeks more than intended. For example, if employees take 12 weeks of leave under the FMLA due to a serious health condition, those 12 weeks will not be charged against their state parental leave account. Therefore, the employees continue to have six weeks of state parental leave available. The Legislature should be mindful of this state-federal leave interaction and refrain from adopting new state leave programs that result in an unreasonable period of combined state and federal leave.

In addition, Minnesota’s voting leave law should be clarified so employees continue to have the ability to take leave to vote, but the potential for abuse is minimized.  For example, Iowa law allows leave only if the employee does not have three consecutive hours when polls are open during which he/she is not required to be at work. Wisconsin law limits the time away from work to three consecutive hours, requires the employee to provide notice to the employer, and the employer can designate the time of day for the leave.

Business Impact

The general fund and the unemployment insurance (UI) trust fund cannot afford a paid parental leave program.  The general fund is expected to show a significant budget shortfall for the FY 2010-2011 biennium, and the UI trust fund just came out of debt at the end of 2005.  In this environment, using general fund or UI revenues for paid parental leave either will create the need for budget cuts or tax increases, or reduce the balance of the UI Trust Fund to pay UI benefits. 

In many cases, employers, especially smaller employers, face cost increases for temporary workers, training, lost productivity and the continuation of health care benefits when employees use leave.  If Minnesota creates new state leave options or expands existing leave programs, especially those that supplement employees’ 12 weeks of FMLA leave rather than run concurrently, the cost impact of leave increases.