In June of 2000, the U.S. Chamber of Commerce, along with the Labor Policy Association and the Society for Human Resource Management, sued the Department of Labor for its proposal to have a paid FML funded by the state unemployment. The premise of the suit was that paid leave would take already limited funds and create competition between less fortunate individuals and those choosing to take a break from being gainfully employed. Though this particular proposal has never seen fruition, it has incited numerous discussions and plenty of debate. To view the different sides of this debate, check out www.familyleavesurvey.com/FMLAPaidLeave.html.

Although California’s bill is unique in that it would not divide the state’s unemployment resources between those unemployed and those taking a leave of absence, it does plan on taking funds from the state disability insurance program. The bill creates a new fund within the disability program that is called the Family Temporary Disability Fund. The payout to employees is governed by the same requirements as the disability program. Despite not using unemployment funds, the bill is still causing many debates. Some feel paid leave would help companies retain workers because of the addition work/life balance benefits; others feel the new bill would hurt small businesses and create a hassle with administration of leave.

Five states currently have short-term disability programs for an employee’s own illness (California, Hawaii, New Jersey, New York and Rhode Island). With the employee-friendly legislation being passed in the state of California and these other states, employers should continue to keep an eye on this trend.**

* The requirements under this new law are not effective until January 1, 2004. We will keep you updated on these changes.