Imagine a project leader asking you to “just give it the green light and we’ll figure things out as we go.” Imagine a project team urging you to bless a flawed plan without knowing what the market will look like.
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That’s exactly what State Sen. Sarah McBride and the Carney administration are asking us to do with her paid family and medical leave proposal, also known as Senate Bill 1. The new regulations would create a fund that starts collecting money from employers and employees in 2025 and starts paying claims in 2026. Who knows what the business climate will be by then?
McBride and Carney clearly feel they have the votes to push this through. On the surface, it’s worker-friendly. The business community has worked hard over the past 18 months to move this legislation from horrific to merely bad, but we need to keep pushing.
Opposing a bill like this puts business owners in the uncomfortable position of looking anti-worker. But it’s also yet another nail in the coffin of Delaware’s long-held status as a business-friendly state.
The Delaware State Chamber of Commerce recently hosted a webinar that included McBride, Delaware Cabinet officials and Carney’s Chief of Policy Albert Shields. As Katie Tabeling notes in her story on this webinar in this issue of DBT, each acknowledged the complexities of creating a process from legislation with so many ambiguities.
McBride claimed that she talked to “lots of companies” in advance of modifying the original language, but few of the business owners I’ve talked to say they know anyone she spoke to.
Only nine states and the District of Columbia have passed legislation like this, including New Jersey and New York, where businesses are leaving in droves. That means 41 states haven’t, presumably because the federal Family and Medical Leave Act (FMLA) adequately addresses the issues.
FMLA guarantees access for most workers at companies with at least 50 employees to unpaid, job-protected parental, family caregiver, personal medical, and military exigency leave.
But our version is better, McBride says, because it goes further. A one-page summary of the bill distributed by Shields lists plenty of benefits for workers but none for the companies that need to stay in business to hire and pay the workers. But I suppose the good news is more than 60 people will be hired to process leave requests. Good, we need more bureaucracy here.
This bill is not small-business friendly, even though it exempts businesses with fewer than 10 employees and exempts employers of 10 to 25 from all but parental leave. But let me share what Jim Vachris Jr., president of Wilmington-based Franklin Fiber-Lamitex Corp. thinks:
“While I fully grasp the intent, the cost and the administrative burden should not be put on the employer,” he wrote in a letter to the governor. “This type of legislation should be required of employers that employ more than 500 employees and have the critical mass to overcome all the excessive burdens [it] would place on small business. This legislation is the epitome of government overreach.”
Vachris goes on to say that if one of the 56 employees of his 100-year-old manufacturing company goes on leave for 12 weeks, he will have to hire another person to do their work because “the work still must be done. The customer needs their parts.” He asks the governor, “What do I do with the new employee when the employee returns to work? Lay him off?”
State Chamber President Mike Quaranta told webinar attendees that Delaware workers are focused on wages, job flexibility, having the ability to pick up a sick child, and health care. Paid family leave was not a benefit that has been raised through employee surveys, he said.
The legislature and governor’s focus is all wrong here. Let’s address crime and youth violence throughout the state. Let’s focus more on our educational system and ensure graduates are better prepared to be successful in college or enter the job market with marketable skills.
The timing for SB1 is awful for businesses struggling to recover from a two-year pandemic and struggling to find people willing to take their open jobs, not to mention the increased regulatory burden for smaller companies.
If this is a done deal, we need to keep trying to make it better. We need more meat on the bone to ensure we are not left trying to figure it out as we go.
Rob Martinelli is the president and CEO of Today Media, the parent company of Delaware Business Times.
