Building an Economy that Works for Everyone

The doctor is in.

When visiting the doctor, one hopes that he or she finds anything puzzling, it will be examined more closely.

So in that spirit, following is a closer look at a number of assertions by the Association of Washington Business (AWB) about Washington’s Family Leave Insurance law.

Let’s start at the top – with the head:

The law applies to companies of any size.

That statement really does oversimplify things. Family Leave Insurance will be available to all parents of newborn or newly adopted children who have worked at least 680 hours in the previous year (the same requirement as Unemployment Insurance).

And while no worker may be discharged or discriminated against for taking paid family leave, job protection covers only workers in companies with more than 25 employees, who have been with that employer at least a year and worked at least 1,250 hours in the previous year.

Elective coverage is available for self-employed people and those otherwise not covered, initially for a minimum of 3 years. And at least 10 provisions of the law provide employer protections, such as requiring that it be taken concurrently with unpaid leave provided through the Family and Medical Leave Act.

Okay, time to listen to the heart – out comes the stethoscope:

“The projected cost to set up and operate the program for the first two years will total an estimated $113 million.”

Those are interesting numbers. But the actual fiscal notes attached to this year’s legislation tell a different story – namely, that it will likely cost quite a bit less:

  • $6.3 million in 2007-2009 (for initial start-up).
  • $71.6 million in 2009-2011 ($57.2 million for benefits, $14.4 million to administer – serving 47,000 families)
  • $88.6 million in 2011-2013 ($76 million for benefits, $12.6 million to administer – serving 62,100 families)

(Note that the administrative costs of the program drop, both as a percentage of the total cost and in real terms, as the program develops. This is consistent with other states’ experiences with paid family leave and maternity disability benefits.)

Hmm. Good thing the doctor is looking closely. Things are not what they appear to be at first blush.

More from the exam room shortly.

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