Family leave: compromise not satisfactory to all business or labor

On the business and labor front, the thrice-vetoed family leave bill appeared headed toward passage the last week of June when the Illinois Manufacturers' Association (IMA), a previously staunch opponent, agreed to support a compromise proposal.

The agreement contained in SB 484 — worked out between the IMA and the legislative sponsors. Sen. Penny Severns (D-51, Decatur), Rep. Helen F. Satterthwaite (D-103, Champaign) and Rep. Myron J. Kulas (D-10, Chicago)— allowed a tax credit to offset unemployment insurance costs for companies with 100 or more workers. The compromise plan had greatly increased the cutoff for businesses that must comply and was a major concession to business. Companies with 100 or more workers, instead of 50 or more, would have to provide up to eight weeks of unpaid leave every two years for employees needing to take care of family members during time of trauma.

"This is a 'win-win' agreement," said Severns, "which should directly improve the daily lives of 2.3 million workers who must juggle their jobs with complicated family issues like sick children, an ailing spouse, a disabled parent or a newbom child." The new plan would affect 53 percent of the work force; the old plan affected 65 percent or 2.8 million workers.

But the legislature adjourned without final action on family leave. They left with four separate family leave bills pending; all are available for action during the fall veto session. The session started with two family leave bills: SB 1700, sponsored by Severns, and HB 2927, sponsored by Kulas. Two additional bills were amended to include family leave provisions: SB 484, as amended by Conference Committee Report 1; and SB 1892, sponsored by Sen. Ted E. Leverenz (D-26, Maywood) and Rep. Barbara Flynn Currie (D-26, Chicago), as amended by House Amendment 10.

Family leave legislation has been introduced repeatedly in both the House and the Senate since 1987. Bills requiring leave to be provided by employers with 50 or more employees were adopted by both chambers in 1989, 1990 and 1991. They were subsequently vetoed, twice by former Gov. James R. Thompson and once by Gov. Jim Edgar.

This spring the sponsors of SB 484 argued again that lack of adequate parental leave costs both families and taxpayers. They cited annual losses of approximately $363 million, including $225 million in lost wages and $108 million in public assistance income, such as unemployment insurance, food stamps and Aid to Families with Dependent Children (AFDC).

The compromise agreement hailed by Severns appeared to be a deal everyone could live with, even though few interest groups would be completely happy. According to Severns, many labor groups supported the compromise proposal, believing that any family leave bill was better than none, but the AFL-CIO came out against it.

The doubling of the number of exempted companies effectively eliminated all "small" businesses. It was one of the concessions made to the IMA, whose 5,000 member companies employ 70 percent of the manufacturing work force. Seventy-nine percent of the IMA's members fall below that 100 employee threshold, and the majority of the remaining 21 percent, who would have been forced to comply, already have family leave benefits in place.

Adding the tax credits for any unemployment insurance costs incurred in hiring a temporary replacement worker for the employee on leave was a new wrinkle in the evolution of family leave. Sen. Severns said that her research of family leave legislation in other states shows that the costs to employers for family leave are negligible. Greg Baise, IMA president, estimated that for a company with 118 employees, two employees on family leave would cost $63 per employee per year for three years. The legislative sponsors also included a January 1, 1998, sunset clause, requiring reconsideration of the new law in case unemployment insurance costs become a greater burden on companies — and the state — than now anticipated.

At the request of the Illinois Retail Merchants Association, the agreement in SB 484 was amended in the Senate to exempt the top 10 percent of a company's employees. Sen. Denny Jacobs CD-36, Moline) sponsored the amendment.

The National Federation of Independent Business (NFIB), whose 19,000 members comprise the largest business organization in Illinois, remained opposed. John Davis, state director of NFIB, said that NFIB/Illinois has consistently opposed the concept of family leave legislation as "forcing another costly mandate on business." He said that the majority (90 percent) of members already try to accommodate employees' requests for leaves of absence.

NFIB also opposed SB 484 because tax credits for family leave would be given only to companies with 100 or more employees. Davis said his members have, on the average, five employees, and an employee's absence from such a small work force more acutely affects them than it does a business with 500 employees. His members also believe that if the larger companies are going to get a tax break for something they already do, then NFIB members should get the tax credits also. Furthermore, NFIB members fear that once proponents "open the door" with a state law, family leave will be expanded to cover all companies, to cover more weeks off and to change the leave from unpaid to paid.

When SB 484, with Jacobs' amendment, was called for its vote in the Senate on June 30, it passed with a veto-proof majority, 42-14 with three voting present. The euphoria in the Senate, however, did not carry over to the House. Speaker Madigan did not call SB 484 for a vote. Instead another version of family leave, SB 1892, was called for a vote late on June 30.

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SB 1892 was drafted by labor and women's groups unhappy with the Severns/IMA compromise. While it contained essentially the same provisions as SB 484, including the top 10 percent employee exemption, SB 1892 had no tax credit provision. Sue Altman, communications director for the AFL-CIO, explained that the AFL-CIO does not believe that business should be rewarded for doing what is right for their employees. SB 1892 passed the House with a veto-proof majority, 78-11 with 28 voting present.

Rep. Kulas, one of SB 484's sponsors, voted present, explaining that he could not vote for SB 1892 because the speaker had earlier agreed to call SB 484, which Kulas believed would also have passed the House with a veto-proof majority. Kulas' point was that if both chambers passed the same bill with veto-proof majorities, the pressure would be on the governor to sign family leave into law or face a near-certain override of his veto. When asked why the House Democrats pushed SB 1892 rather than SB 484, Kulas said: "Because they [the Democratic party leadership] don't want to make a political issue out of it; they don't want the Republicans to be voting on a family leave bill during an election year."

With the control of the Senate up for grabs in the November election, family leave sponsors believed this legislative session may be their last chance to pass it. Kulas contended, and Severns' labor faction agreed, that "half a loaf was better than none." But the AFL-CIO contingent believed that trying to improve a "business bill" would be more difficult than trying again to pass family leave in its original form.

When SB 1892 was called in the Senate in the early morning hours of July 1, the majority approval requirement had changed constitutionally from 30 to 36 votes for a bill to be effective immediately. The bill failed 27-17 with 12 voting present and three not voting.

While no family leave legislation made it to the governor's desk this summer, the four bills could easily surface during the fall veto session after the election determines whether Republicans or Democrats have won a majority in the new Senate that convenes in January. During the November-December veto session, with the greatest number of lame ducks in a decade, anything is possible.

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