Governor Spitzer’s aggressive effort to shore up his relationship with organized labor is threatening to erode his goodwill with business interests, which are responding with skepticism to his plan to create the state’s first paid family leave program.
Mr. Spitzer has quietly put forward legislation that would grant paid leave to employees who need to take time off to provide physical, psychological, or spiritual care for an ill family member, including domestic partners or grandchildren, or to bond with their newborn children.
Under the legislation, employees taking such family leave could receive up to $170 a week in benefits for up to 12 weeks. The program would be part of the state’s workers’ compensation system.
Employees would be eligible for paid leave if they were taking care of a family member being treated in a hospital or receiving continuing treatment by a health care provider, including a physician, podiatrist, chiropractor, dentist, or psychologist.
Employees also could receive paid leave to assist a family member who depends upon prayer alone for healing and is under the care of an accredited religious figure.
Spitzer officials are claiming that the cost of the benefits would be entirely shouldered by employees, whose employers would be permitted to deduct an additional 45 cents a week from paychecks to cover extra insurance costs. The current deduction is 60 cents a week.
“We think when businesses understand that this does not transfer the cost to them, we think the business community will strongly support this,” a spokeswoman for the governor, Christine Anderson, said.
Critics of the legislation say it would force insurance companies to raise premiums, and they predict that the added cost to businesses would be greater than the increased payroll deductions.
They are warning that the new proposed benefits could eat away at the savings they are expecting from the state’s recent overhaul of the workers’ compensation system, which provides benefits to injured workers.
“We need to do things that make the state more competitive and improve the business climate instead of doing things that impose additional burdens and mandates on businesses,” the New York State director of the National Federation of Independent Business, Michael Elmendorf, said.
The bill, which covers most private employers and half of local public employers, would guarantee benefits. It would not, however, confer job protection to employees not covered by the federal Family and Medical Leave Act, which exempts businesses with fewer than 50 employees.
Lawmakers in both houses are nearing an agreement with Mr. Spitzer on his legislation, which would make New York the third state in the nation to establish a paid family leave program, after Washington and California.
The governor is wrapping up talks on a paid leave bill a week after he signed legislation allowing some 60,000 day care providers to unionize, handing a victory to the United Federation of Teachers, the teachers union that is now organizing the employees.
The paid leave bill was a top legislative priority for the labor-backed Working Families Party, a rising third party that was one of the first groups to have endorsed Mr. Spitzer’s candidacy for governor.
The party also helped run the field operation of Craig Johnson’s state Senate campaign on Long Island. The victory of Mr. Johnson, a Democrat, helped further the governor’s quest to oust Republicans from power in the Senate.
The governor is reaching out to organized labor in the aftermath of his heated confrontation with the health employees’ union, 1199 United Healthcare Workers East, which attacked Mr. Spitzer’s health care budget and proposed cuts to Medicaid with a well-funded ad campaign.
While Mr. Spitzer’s relationship with the union remains strained, his latest actions have pulled him closer to other factions of organized labor.
The governor’s tactic has caused consternation among some businesses and fiscal groups, which recall when Mr. Spitzer’s campaign boasted that he would “make this the most business-friendly state in the nation.”
Conservative fiscal groups, which are already disappointed by the high rate of spending under Mr. Spitzer’s budget, said the paid family leave bill is another sign of a leftward lurch.
“It’s difficult to see how any new employer mandate — even one with a minimal cost — is going to help promote economic growth in the state,” the executive director of the Empire Center for Public Policy, E.J. McMahon, said.
The program would be folded into the state’s temporary disability insurance program, which is administered by the workers’ compensation board. Employers would broaden their workers’ compensation insurance plans to cover the family leave benefits.
Proponents of paid family leave say the extra money allows people taking care of a seriously ill family member or a newborn to stay in the workforce without abandoning their personal obligations. The money is especially critical for the increasing numbers of households headed by single parents.
Most people who choose not to take the 12 weeks of unpaid leave that is guaranteed under the Clinton-era Family and Medical Leave Act opt out because they cannot afford the lost income, supporters of the legislation say.
“For many families, medical emergencies lead to financial ruin, resulting not only from medical bills but also from lack of income,” the governor’s program bill memo states. “Allowing caretakers to receive a modest income during a limited time away from work would help forestall such financial distress.”
The Spitzer memo describes paid leave as a “cornerstone of an effective birth-to-five education agenda.”
In 2004, California became the first state to start a paid family leave program, which guarantees benefits of up to 55% of weekly earnings — or up to $840 a week — for up to six weeks. This month, Governor Gregoire of Washington signed a bill that grants employees taking care of newborns up to $250 a week in benefits for up to five weeks.
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