Businesses fret over Colorado’s new paid leave law even as it stands as potential “blueprint” for other states

Now that vot­ers have spo­ken out in favor of paid fam­i­ly and med­ical leave in Col­orado — pass­ing Propo­si­tion 118 on Tues­day — the ques­tion for busi­ness­es that will have to help pay for the $1.2 bil­lion-a-year pro­gram is what hap­pens next.

For Gail Lind­ley, own­er of Den­ver Book­bind­ing Com­pa­ny, the new gov­ern­ment man­date is “unnec­es­sary” for her busi­ness, which has been oper­at­ing in north Den­ver for more than 90 years.

“I already pro­vide flex­i­ble time — for us, it’s an added cost,” she said.

Prop 118, which will cre­ate a state-run paid fam­i­ly and med­ical leave insur­ance pro­gram for Col­orado work­ers, gives employ­ees up to 12 weeks of paid leave annu­al­ly — a week­ly max­i­mum of $1,100 in the first year — to be with a new­born or to care for them­selves or a fam­i­ly mem­ber who is seri­ous­ly ill, while simul­ta­ne­ous­ly safe­guard­ing their jobs.

Pro­po­nents say such an arrange­ment has pay­offs that can’t be mea­sured mere­ly in dol­lars. Women and chil­dren ben­e­fit in par­tic­u­lar, they say, as many moth­ers pre­ma­ture­ly stop breast-feed­ing their babies because they have to return to work.

Paid time allows them more and bet­ter bond­ing time with their child, advo­cates say.

The pro­gram would split the cost of the pre­mi­um to fund the cov­er­age even­ly between the work­er and the employ­er. Accord­ing to num­bers from the state’s Leg­isla­tive Coun­cil, an employ­ee earn­ing $52,000 a year would pay $234 in pre­mi­ums per year, as would that worker’s employer.

While fed­er­al law already pro­tects a worker’s job with up to 12 weeks of unpaid leave for a new­born or an ill­ness, adding com­pul­so­ry com­pen­sa­tion may prompt employ­ees to take advan­tage of the full dura­tion of the pro­gram even if they can return to the work­place soon­er, Lind­ley said.

“To have a staff mem­ber gone for 12 weeks, that’s gonna hurt,” she said. “We’re five gen­er­a­tions here — we’ve all had babies. But we worked it out where you worked part time or three days a week.”

Even though pre­mi­ums wouldn’t start to be levied until 2023 — with the first dis­burse­ments under the pro­gram going out in 2024 — Loren Fur­man, senior vice pres­i­dent of state and fed­er­al rela­tions with the Col­orado Cham­ber of Com­merce, said plac­ing a new cost bur­den on busi­ness­es as they strug­gle under ongo­ing coro­n­avirus-fueled shut­downs and restric­tions is cru­el timing.

“I don’t think any­one can deter­mine what the long-term eco­nom­ic dev­as­ta­tion will be for busi­ness­es dur­ing and after the pan­dem­ic,” she said this week. “I would main­tain that this is still the worst time to raise pay­roll tax­es on employ­ers and work­ers, and it is unlike­ly that they will have ful­ly recov­ered by 2023.”

But state Sen. Faith Win­ter, who for years fought unsuc­cess­ful­ly to get a paid leave law passed in the state­house, said she is pre­pared to “work with the busi­ness com­mu­ni­ty” on putting into prac­tice the new law. The nuts and bolts of the mea­sure will like­ly be addressed by state law­mak­ers in the next leg­isla­tive ses­sion, she said.

“I’m real­ly proud of Col­orado for being the first state to pass paid fam­i­ly and med­ical leave at the bal­lot box,” she said. “It shows the inde­pen­dence of Col­orado vot­ers and the thought­ful­ness of Col­orado vot­ers to come togeth­er to find solutions.”

Col­orado is the ninth state in the nation — and the first not on the coasts — to estab­lish a paid fam­i­ly and med­ical leave sys­tem. Cal­i­for­nia was the first to launch such a pro­gram in 2004.

Win­ter said she has already been hear­ing from law­mak­ers in oth­er states about how Col­orado put the mea­sure on the bal­lot and got buy-in for the con­cept. She not­ed that more than 200 com­pa­nies in the state have endorsed paid fam­i­ly and med­ical leave.

“This has worked in eight oth­er states,” Win­ter said. “I think this will be one of the issues that takes off in the com­ing years.”

Kevin Cur­ry, chief rev­enue offi­cer for Reed­Group, a West­min­ster-based leave man­age­ment firm, said Col­orado could serve as a “blue­print” for oth­er states on how to get a paid leave pro­gram off the ground.

“In the absence of a fed­er­al pro­gram, the states are tak­ing this upon them­selves,” he said. “From a tal­ent attrac­tive­ness stand­point, this makes Col­orado a more attrac­tive state for young pro­fes­sion­als. It’s where we see the rest of the world.”

But Tony Gagliar­di, Col­orado direc­tor for the Nation­al Fed­er­a­tion of Inde­pen­dent Busi­ness, said more than 70% of small busi­ness­es in the state already offer some type of paid leave. And because the new law does not apply to com­pa­nies with nine or few­er employ­ees, it could have the effect of sti­fling growth.

“Many small busi­ness­es will be encour­aged to reex­am­ine their need for their cur­rent num­ber of employ­ees,” Gagliar­di said.

He also wor­ries about the long-term sol­ven­cy of the pro­gram and whether it can sur­vive with­out rais­ing pre­mi­ums in the future.

“Then we will see if the out-of-state groups who fund­ed the pro­po­nents’ cam­paign will be back in Col­orado offer­ing finan­cial assis­tance to Col­orado tax­pay­ers who are now sad­dled with the lia­bil­i­ty of the pro­gram,” he said.

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