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$15 Minimum Wage, Paid Family Leave Approved for Ballot

Posted by Christopher Geehern on Sep 6, 2017 2:46:50 PM

Attorney General Maura Healey today certified proposals for mandated paid family leave and a $15 per-hour minimum wage for inclusion on the 2018 statewide ballot questions.

Votingsmall.jpgThe two initiative petitions were among 21 potential ballot questions certified by the attorney general. Also approved were petitions to reduce the sales tax and re-establish an annual sales-tax holiday. Of concern to the business community were petitions to raise the annual percentage of renewable energy use in Massachusetts and mandate nurse-staffing ratios by statute.

The decisions mean that the 2018 ballot may contain three major proposals of concern to business – the paid leave and minimum wage petitions, and a constitutional amendment that would establish a 4 percent surtax on incomes of more than $1 million.

“The employers of Associated Industries of Massachusetts are deeply disappointed with the decision to certify the paid-leave and minimum-wage increase questions. The paid-leave petition would create a new $1.3 billion benefit program that could increase by 40 percent every year,” said John Regan, Executive Vice President of Government Affairs at Associated Industries of Massachusetts.

“Employers will review the attorney general’s certification before deciding on the next step.”

The paid-leave proposal would allow covered workers to take up to 16 weeks of family leave or 26 weeks of medical leave. Workers could take family leave to care for a child after the child’s birth, adoption, or placement in foster care; to care for a seriously ill family member; or to address needs arising from a family member’s active duty military service.

Workers taking family or medical leave would receive 90 percent of their average weekly earnings, up to $1,000 per week. Beginning January 1, 2021, the weekly cap on benefits could be adjusted annually based on the Consumer Price Index published by the United States Department of Labor for the Boston metropolitan area.

The proposed law would create a trust fund into which employers would pay 0.63 percent of each employee’s annual wages, up to half of which could be deducted from employee wages. Beginning October 1, 2021, the contribution rate would be reviewed and adjusted annually to ensure funding of at least 140 percent of the amounts paid out during the previous year.

AIM estimates that the likely cost per week per employee to fund the program will exceed $520 per employee yearly, more than the average $508 per employee that companies now pay for the $1.3 billion Massachusetts Unemployment Insurance program.

The minimum wage proposal would boost the commonwealth’s base wage from the current $11 per hour to $12 in 2019; $13 in 2020; $14 in 2021; and $15 in 2022. The proposed law would also raise the minimum cash wage that must be paid to tipped employees, which was $3.75 per hour as of January 1, 2017, to $5.05 in 2019; $6.35 in 2020; $7.64 in 2021; and $9 in 2022.

Topics: Minimum Wage, Massachusetts economy, Mandated Paid Leave, Paid Family Leave

Infographic: Paid Leave Law Raises Benefit Costs by 87 Percent in California

Posted by Brad MacDougall on Jun 26, 2017 8:30:00 AM

The Massachusetts Legislature is considering a paid leave bill that would establish the right of employees to receive job-protected paid family and paid medical leave.  Benefits would include up to 16 weeks of paid family leave, and 26 weeks of paid medical leave.  Weekly benefits would begin at 50 percent of the employee’s weekly wage and capped at $1,000 per week.

But benefit costs would accelerate quickly if the bill becomes law. The 50 percent salary replacement level required at implementation in January 2019 would increase to 90 percent by January of 2021.

How fast will costs increase? Consider the following information about California's decade-old paid family leave law:

Paid Leave.jpg

 State of California
Labor and Workforce Development Agency

Register for the Paid Leave Webinar

 

Topics: Employment Law, Mandated Paid Leave, Paid Family Leave

Paid Leave Proposals Not Reasonable or Manageable

Posted by John Regan on Jun 13, 2017 1:00:00 PM

Editor’s Note: The following testimony opposing paid leave was delivered to the State House by AIM today. The testimony was provided to the Joint Committee on Labor and Workforce Development regarding HB 2172 and SB 1048.

My name is John R. Regan, Executive Vice President of Government Affairs for Associated Industries of Massachusetts (AIM.); the state’s largest nonprofit, nonpartisan association of Massachusetts’ employers.

StateHouse-resized-600.pngWith thousands of members employing nearly one out of every five workers in Massachusetts, AIM’s mission is to promote the well-being of its members and the prosperity of the Commonwealth of Massachusetts by improving the economic climate, proactively advocating fair and equitable public policy, and providing relevant, reliable information and excellent services.

Thank you for the opportunity to present our testimony today.

We respectfully ask that HB 2172, SB 1048, and any similar bills receive adverse reports from this Committee.

We agree with the proponents of these bills that Massachusetts’ citizens need to balance the needs of work and family. In fact, according to the 2016 AIM Benefit Survey, 87% of responding companies offer short-term disability to their employees with benefits ranging from 51 to 70% salary replacement; 79% offer long-term disability insurance and 59% have a leave of absence policy, all in addition to the leave benefits under FMLA.

However, we do not agree, and do not believe, that the legislation before you is a reasonable, manageable, or affordable approach to address those needs, either from an employee or employer perspective.

Last session, we asked a series of questions that we would like to ask this Committee again.

We strongly believe that the Committee should have answers to each of these questions before any bill can be reasonably released from your consideration. (For this portion of our testimony, we will be using section references to the language of Senate 1048. Similar language and concepts are found in the House bill as well.)

  • Section 2, of the proposed new Chapter 175M, creates a new office within the Executive Office of Labor will be created to administer the new leave program for the Commonwealth; does the Committee know the costs associated with this new office?1
  • Sections 3 & 4 creates the benefit durations and levels of wage replacement for the leave program; does the Committee know what the estimated take-up rate is for individuals taking both the maternity leave and disability leave? For cost estimating purposes, take-up rates per program are critical to know.
  • Further, what is the Committee’s estimate of the total program costs incurred by employers and the Commonwealth for administering this program and providing these new benefits?2
  • In Section 8, the director of the fund is charged with “assessing” the tax to fund this new program. Is this Committee aware of any precedent for the creation of this type program as well as the power to set and raise revenue by a non-elected individual? Are we sure that this is constitutional?
  • The director will become responsible for numerous operational duties in managing the funds related to this bill. Is there a cost estimate for this function?
  • In addition, has anyone determined what the tax assessment per employee might be for this program and, if so, could we see that analysis?3
  • Lastly, the bill requires that claims for family and medical leave benefits shall be filed with the department and handled under the procedures prescribed in sections 1, 10, 11, 12, 14, 15, and 16 of chapter 30A. Is there an estimate of the number of claims to be adjudicated and the costs for that process?4

The terms of this legislation are far-reaching. Although the initial implementation in January of 2019 would require 50% salary replacement levels, that level is increased to 90% by January of 2021 and the average weekly wage is then tied to the Consumer Price Index for the Boston-Cambridge-Quincy consolidated metropolitan statistical area. Not only is this an extraordinarily high rate of compensation, but it also derives the wage rate from on the area of the Commonwealth with the most expensive cost of living. This will not accurately reflect the economic complexity of different areas in Massachusetts, placing an undue burden on employers and employees living in less costly areas.

Of late, many have wondered why with a recovered economy and lower unemployment rates Massachusetts own-source revenue continues to fall below even relatively conservative benchmark levels. One reason cited by our members is lack of wage growth.

According to the Pew Charitable Trust, personal income growth in Massachusetts has only grown by 2.0% since Q4 of 2007.5 Employers in the Commonwealth are faced with considerable non-wage job costs for health care, unemployment insurance, workers compensation insurance, and other Massachusetts-only high costs, like electricity rates. Combine these with higher than average base wage costs, and you restrict employers’ ability to raise wages in a manner similar to other post-recessionary recovery periods.

Inevitably and necessarily, this lack of wage growth affects tax revenue growth for Massachusetts.

A new, and expensive paid family and medical leave program, as envisioned by these bills, will contribute to a diminished pool from which to fund additional jobs and additional wage growth.

Register for the Paid Leave Webinar

Topics: Employment Law, Mandated Paid Leave, Paid Family Leave

Employers Face Flood of Ballot Questions

Posted by Brad MacDougall on Aug 10, 2015 9:59:51 AM

Massachusetts employers face a potential flood of statewide ballot initiatives in the next several years that could fundamentally alter the role of government in regulating private enterprise.

VoteHereSignTwenty four groups filed 35 initiative petitions with the attorney general’s office last Wednesday for proposed laws or constitutional amendments to go before voters in 2016 or 2018. The proposals range from mandating paid maternity leave to expanding dysfunctional renewable-energy targets to levying financial penalties for retail stores or fast-food restaurants that change an employee’s schedule within 14 days of a shift.

A proposed constitutional amendment that would impose a 4 percent surtax on income more than $1 million could reach the ballot by 2018. The change would boost the overall tax rate by 80 percent on any income more than $1 million, which could have devastating consequences for the large number of Massachusetts businesses organized as subchapter S corporations or limited liability corporations.

The Wednesday filing deadline started a long process by which initiative petitions qualify for inclusion on the statewide election ballot. The attorney general will initially review the petitions to determine whether they meet constitutional requirements. Decisions on certifications will be released on Sept. 2.

The number and variety of potential questions impacting employers would be unprecedented if even a portion of the proposed laws and amendments make it to the ballot.

Associated Industries of Massachusetts (AIM) will participate in discussions with the attorney general as an opponent of the parental leave, surtax, scheduling and solar energy questions. The association’s Board of Directors will review the remaining employer-related questions shortly and determine the positions that AIM will take.

AIM opposes ballot questions generally as an inefficient and clumsy method of resolving complex economic policy decisions.

Progressive groups, emboldened by their success in securing approval for paid sick time last November, are increasingly taking workplace social policy issues directly to voters.

“These initiatives, taken together, represent a broad assault on the ability of employers to create jobs and economic opportunity here in Massachusetts. It appears that social causes now trump economic policy,” said John Regan, Executive Vice President of Government Affairs at AIM.

The parental leave question would require employers to pay women who take leave to give birth or to adopt a child for at least two weeks of that leave. The law would require notice to be posted in any workplace in which females are employed.

One of the renewable energy questions would require that Massachusetts meet all of its electricity needs with renewable power by 2050. The second would increase subsidies to developers of solar power.

Here are all the proposed employer-related ballot questions that have been filed, with links to the text:

15-03 Constitutional Amendment Corporations Are Not People and May Be Regulated.  Money is Not Free Speech and May Be Regulated.

15-04 Constitutional Amendment Corporations Are Not People and May be Regulated.  The General Court May Limit Political Spending and Contributions.

15-06 Paid Parental Leave (AIM opposes)  

15-12 Initiative Petition for a Law Relative to Ending Common Core Education Standards.

15-17 An Initiative Petition for an Amendment to the Constitution of the Commonwealth to Provide Resources for Education and Transportation through an additional tax on incomes in excess of One Million Dollars.

15-18 Initiative Petition for a Law Relative to Renewable Energy.

15-19 Massachusetts Fair Health Care Pricing Act.

15-20 Massachusetts Equitable Health Care Pricing Act.

15-26 Initiative Petition for a Law Relative to Solar and Renewable Energy.

15-31 An Act to Allow Fair Access to Public Charter Schools.

15-35 An Initiative Petition for a Law Relating to Fairer Scheduling for Workers

A list of all 36 petitions may be found on the attorney general’s Web site.

 

Topics: Energy, Ballot Questions, Mandated Paid Leave

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