BENEFIT OR BURDEN? BUSINESS LOBBIES AGAINST PARENTAL LEAVE BILL

Business long has lobbied against congressional efforts to set

standards for how companies must treat their employees. But the bitter

business opposition to the parental leave bill now before the Senate has

an extra edge: Lobbyists fear it is only the first in a long line of

costly employee health and benefit bills that will stretch into the next

The fate of the bill, which would require companies to offer a

minimum period of unpaid leave for births, adoptions and the serious

illness of a child, remained up in the air yesterday. If the legislation

does not pass, proponents and supporters alike say it will be partly

because of intense business lobbying.

The U.S. Chamber of Commerce and the Concerned Alliance of

Responsible Employers (CARE), an alliance of 160 business associations

and individual companies, have been flooding congressional offices with

letters, mailgrams, telephone calls and even printed T-shirts, all to

drive home the same message: Congress should quit meddling in business

decisions about employees.

The urgency of the fight has been fueled by the feeling among

business groups that the battle over congressionally ordered benefits

will return next year. The parental leave bill is only the first to

"rear its ugly head," in the words of one lobbyist, who anticipates that

legislators in the next Congress will seek to appeal to two-income

families with proposals on child care, flexible benefits and universal

health insurance.

The bill, sponsored by Sen. Christopher J. Dodd (D-Conn.), is

intended to ensure that employees can take parental leave or sick leave

without fear of getting fired. Support for the idea has been spurred in

recent years by the demographic revolution in the American work force,

which has sent 56 percent of American women into factories and offices.

Polls indicate that Americans overwhelmingly support the concept of

parental leave, and even Republican presidential nominee George Bush has

jumped onto the issue, recently declaring that women should not have "to

worry about getting their jobs back after having a child or caring for a

child during a serious illness."

But Bush is strongly opposed to mandatory federal rules, arguing

instead that the government should offer incentives to encourage

business to grant unpaid parental leave. Democratic presidential nominee

Michael S. Dukakis supports the bill.

Although there is no national parental leave policy, 15 to 20 states

have some form of parental or maternity leave laws.

The proposal in the Senate would guarantee 10 weeks of unpaid

parental leave every two years for the birth, adoption or serious

illness of a child, and 10 weeks of unpaid leave every year for a

worker's own serious illness. When the employee returns, the employer

would be required to provide the same or comparable job. Existing health

insurance coverage would continue during the leave, but other employee

benefits, such as pensions and life insurance, would be frozen.

Companies with fewer than 50 employees would be exempt. Thus the

measure would affect just 5 percent of all businesses nationwide, or

about 40 percent to 42 percent of the work force, Dodd said. The House

has a slightly different bill awaiting action.

The bill's supporters point out that a quiet minority of companies

find that it actually saves them money to offer unpaid leave. It is more

efficient to fill in for a worker for six months than to train a new

employee, these companies say. But opponents of the bill predict that

parental leave would force companies to carry on without key managers

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and critical employees, such as nurses, engineers or machine operators.

They argue that mandated benefits would hurt the international

competitiveness of American business, and point out that only a few

benefits -- unemployment compensation, workers' compensation and Social

Security -- are mandated by federal law. Yet companies voluntarily offer

a wide range of other benefits, such as health insurance, life

insurance, profit sharing and paid holidays.

"It's a question of choice," said Mary T. Tavenner, director of

government relations for the National Association of

Wholesaler-Distributors and one of the founding members of CARE. CARE

was formed a month after the 1986 election in response to business'

anticipation that the newly restored Democratic leadership in the Senate

would try to push benefits legislation.

Like many lobbying battles, this one includes dueling statistics. A

U.S. Chamber of Commerce survey showed that 77 percent of the nation's

businesses already provide some form of parental leave benefit.

Two-thirds of the other companies reported that their employees

preferred other benefits.

But supporters say that many companies only offer

maternity-disability plans for recovering mothers, and those sometimes

for only a few weeks. Fewer than half of medium and large companies

offer at least 13 weeks of maternity-disability, says the U.S. Bureau of

Labor Statistics.

Estimates of the cost of the bills also vary wildly. Last year, the

Chamber of Commerce put the cost of the original measure, which covered

companies with more than 20 employees and allowed 13 weeks medical

leave, at $16.2 billion a year. After criticism of that figure, the

Chamber reduced its estimate to $2.6 billion, calling the first number a

worst-case scenario, and said the revised bill would bring that estimate

down further. A study for CARE, meanwhile, concluded that employers

would pay an additional $56.3 million for temporary workers if one-third

of employees were replaced during their leave.

Bethesda-based Marriott Corp., which is on the CARE steering

committee, is one of the companies opposed to the legislation. Although

the company complies in states with laws requiring that a returning

employee get the same or a comparable job, "We're opposed to federally

mandated programs that tell us we have to do so," a spokeswoman said.

The General Accounting Office, meanwhile, puts the bill's cost

figure at $147 million, in the belief that the only expense would come

from the continuation of health insurance coverage. GAO investigators

found that less than one-third of workers who went on leave were

replaced, and their work was handled by reallocating work among the

remaining employees.

Some companies have found that offering leave saves money. For

instance, Merck & Co., the pharmaceutical company in Rahway, N.J.,

estimated it saves about $12,000 for each employee it retains by

allowing them to take six-month parental leave. Douglas Phillips, senior

director of corporate planning, stressed that the numbers were very

soft, but that there were indeed considerable savings.

Likewise, Joanne Horgan, director of personnel administration for

American Management Systems Inc., a Arlington-based computer and systems

engineering firm that offers leave, said, "Any costs that might accrue

are offset by the fact that we don't have to recruit people, and we get

people back who are already trained and therefore productive.

"With 45 percent of the staff female, a lot of employees have had

babies over the years," she said. Most stay out for two to six months,

and in general the company holds the employee's job open for two months.

"I don't see where it would be an undue burden," Horgan said of the

Senate bill.

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