Public Hearing to Address Issues Affecting Families in the Workforce

1 JOINT HEARING BEFORE THE NEW YORK STATE

SENATE STANDING COMMITTEE ON LABOR 2 AND

SENATE STANDING COMMITTEE ON SOCIAL SERVICES 3 ----------------------------------------------------- 4 PUBLIC HEARING 5 TO ADDRESS ISSUES AFFECTING FAMILIES IN THE WORKFORCE 6 ----------------------------------------------------- 7 Legislative Office Building

181 State Street 8 Van Buren Hearing Room A, 2nd Floor

Albany, New York 12247 9 10 March 24, 2015

11:00 a.m. to 2:00 p.m. 11 12

PRESIDING:13

Senator Jack M. Martins 14 Chairman

NYS Senate Standing Committee on Labor 15

Senator David Carlucci 16 Chairman

NYS Senate Standing Committee on Social Services 17 18 SENATORS PRESENT: 19 Senator Joseph P. Addabbo, Jr. 20 Senator Timothy Kennedy 21 Senator Jeffrey D. Klein 22 Senator Kathleen A. Marchione 23 Senator Gustavo Rivera 24 Senator James Sanders, Jr. 25 Senator Diane J. Savino 1

SENATORS PRESENT (continued): 2

Senator Daniel L. Squadron 3

Senator Michael Venditto 4 5

---oOo--- 6

SPEAKERS:PAGE QUESTIONS 7

Mario Cilento 8 15 8 President

New York State AFL-CIO 9

Donna Dolan 21 28 10 Executive Director

New York State Paid Leave Coalition 11

Nancy Rankin 53 72 12 Vice President of Policy, Research,

and Advocacy 13 Community Service Society 14 Sherry Leiwant 53 72

President and Co-Founder 15 A Better Balance 16 Ken Pokalsky 101 118

Vice President of Government Affairs 17 Thomas Minnick

Director, Center for Human Resources 18 The Business Council of NYS 19 Michael Durant 137 143

New York State Director 20 National Federation of

Independent Businesses 21

Susan Antos 149 167 22 Senior Staff Attorney

Empire Justice Center 23

Kevin Douglas 149 167 24 Co-Director of Policy

United Neighborhood Houses of NY 25 1 SENATOR MARTINS: Good morning, everyone. 2 Thank you for being here at this joint 3 hearing of the Senate Standing Committee on Labor, 4 and Social Services. 5 To those watching over the Internet, welcome 6 as well. 7 My name is Jack Martins. I'm the Chairman of 8 the Senate's Labor Committee. 9 And let me start by introducing the other 10 members of the Committee who are here. 11 We have Senator Marchione and 12 Senator Gustavo Rivera and Senator Savino. 13 Today's hearing will examine ways to address 14 issues affecting families in the workforce. 15 Balancing the demands of caring for children 16 and loved ones while working full-time is a 17 challenge for all of our families. 18 Certainly, we all have loved ones and friends 19 who are dealing with these challenges. Some of us 20 have experienced them personally as caregivers. 21 Dealing with these challenges requires 22 striking a delicate balance, helping workers, while 23 not burdening employers in a way that will 24 ultimately end up hurting the very people we are 25 trying to help. 1 This hearing will examine meaningful steps we 2 can take to help New York workers and employers 3 achieve that balance. 4 Some of the topics we will be discussing 5 today include legislation dealing with paid family 6 leave, child-care subsidies, facilities enrollment, 7 and dependent-care tax credits. 8 Representatives from business groups, labor 9 and trade unions, not-for-profit organizations, and 10 advocacy groups are here to offer their expertise 11 and input about how they think these issues should 12 be resolved. 13 We thank them for coming and look forward to 14 hearing their testimony. 15 And now I'd like to invite 16 Senator David Carlucci, Chairman of the Senate 17 Social Services Committee, to make his opening 18 remarks. 19 Senator. 20 SENATOR CARLUCCI: Thank you, 21 Senator Martins. 22 And, I want to thank everyone for being here 23 today for this extremely important topic. 24 As you heard, we're going to focus on some -- 25 a key few areas that we think will be essential to 1 providing the level of care that's necessary for our 2 children. 3 We know that in the first few years of our 4 children's lives, their brain is growing at a rapid 5 pace, and all of the foundation for life's learning 6 is being built at that time. 7 So we know that if we can appropriate the 8 right resources at the right time, that investment 9 will pay dividends in the long run. 10 So we're here today to take the input, to 11 hear from a diverse cross-section of the community, 12 to hear how we can implement these programs in the 13 most effective manner. 14 So I look forward to hearing the testimony 15 from everyone that's here today, and working with 16 you in the future. 17 With that, I'm going to turn it over to 18 Senator Jeff Klein for some opening remarks. 19 SENATOR KLEIN: Thank you, Senator Carlucci. 20 I, too, want to thank Senator Carlucci of the 21 Social Services Committee, as well as 22 Senator Jack Martins, Chair of the Labor Committee. 23 This I believe is long overdue; really having 24 the stakeholders today sit down and talk about the 25 importance of paid family leave, and, you know, 1 trying to work out a way that we can ensure that 2 New York families have the ability to have paid 3 family leave. 4 I think everyone knows that the federal 5 government guarantees 12 weeks of unpaid family 6 leave. 7 I think everyone here would probably agree 8 that most families can't afford to take 1 week of 9 unpaid family leave, let alone 12 weeks. 10 So I think the time is now to adopt the 11 sensible plan of paid family leave in 12 New York State. 13 I think it's long overdue. 14 Other big states, like California, 15 New Jersey, already have paid-family-leave programs 16 in place, and I think it's important that New York 17 join those other states to give families peace of 18 mind. 19 I think everyone knows how important it is 20 for families to be able to take time from work, to 21 take care of a sick child, an elderly loved one, or 22 bond with a newborn. 23 I think, unfortunately, without the 24 paid-family-leave program in place, we're really 25 forcing families to make some horrible choices. 1 We should never have New Yorkers choose 2 between what their heart is telling them to do and 3 what their bank account allows them to do. 4 The paid-family-leave program we are calling 5 for meets the real needs of New York families by 6 providing them with up to half of their weekly wage 7 for up to six weeks. 8 I think in today's world everyone will agree 9 that that is not really a luxury, but sort of a 10 necessity. 11 So, again I thank the two Chairs, and all the 12 assembled Senators. 13 And, hopefully, we can get some answers, and 14 really move forward with the paid-family-leave 15 program in New York State. 16 Thank you. 17 SENATOR MARTINS: Thank you, Senator Klein. 18 Any comments, Senator Savino? 19 SENATOR SAVINO: I just want to thank both 20 Chairs, of the Social Services, and the Labor, 21 Committee, and, of course, Senator Klein for being 22 here. 23 I've been in the Senate 10 years now, and 24 this is an issue that I have worked on probably my 25 entire time. In fact, before I got elected to the 1 Senate, I was part of the paid-family-leave 2 coalition as a member of the labor movement. 3 It is an issue that is long overdue, as it 4 has been said, and I'm very happy that we are here 5 today to consider some of the many options. 6 Ten years ago I introduced a bill, and, in 7 fact, that bill was passed last week in the Senate. 8 So there are many, many proposals out there. 9 I think we can find the right balance for 10 New York. 11 And, also, I'm glad that we'll be talking 12 about another issue that affects millions of 13 families across this state; and that is access to 14 subsidized, affordable, safe child care. 15 I've said this a million times: Child care 16 should not be part of social services. It should be 17 part of our economic-development programs. 18 It's what keeps women in the workforce, and 19 allows families to thrive. 20 So, thank you, and I look forward to the 21 testimony. 22 SENATOR MARTINS: Thank you, Senator. 23 Our first witness this morning is 24 Mario Cilento, president of the New York State 25 AFL-CIO. 1 We have Senator Sanders who has joined us. 2 Before we start, Senator, would you like to 3 say a few words? 4 SENATOR SANDERS: I will let the first 5 witness speak, and then I'll chime in, and I'll 6 incorporate it, when appropriate. 7 SENATOR MARTINS: I appreciate that. 8 Gentlemen, thank you very much for being 9 here. 10 MARIO CILENTO: Thank you. 11 SENATOR MARTINS: As always, to the extent 12 that we can avoid reading our testimony, that would 13 be great. 14 We have it, we'll have an opportunity to 15 review it. 16 And, you know, just looking forward to your 17 input on this important issue. 18 Thank you. 19 MARIO CILENTO: First of all, thank you, 20 Senator Martins. 21 And, Chairman Martins, Chairman Carlucci, 22 Senator Klein, Senator Savino, Senator Marchione, 23 Senator Rivera, and, of course, Senator Sanders, 24 I want to thank you for allowing me to present 25 testimony today on this important issue; certainly, 1 paid-family-leave insurance. 2 And I am here today on behalf of the 3 2 1/2 million members of the New York State AFL-CIO, 4 as well as all of the hard-working and dedicated men 5 and women who find themselves between a rock and a 6 hard place most of the time when it comes to 7 balancing work and increasing the demands of family 8 life. 9 And, working people, in our opinion, 10 shouldn't have to choose between nurturing a newborn 11 and financial stability; they shouldn't have to 12 choose between staying home to care for a seriously 13 ill relative and being able to provide for their 14 families. 15 For far too many families and individuals, 16 particularly low- and middle-income families, in 17 particular, they're already struggling to make ends 18 meet and they're living paycheck to paycheck, and 19 they simply cannot afford to take unpaid leave time. 20 And, frankly, they shouldn't have to. 21 Congress recognized it, as it's been 22 mentioned, the need for family and medical leave 23 more than 20 years ago, but it left out the most 24 important component: wages. 25 Here in New York State, the 1 disability-benefits programs provided paid leave for 2 non-work-related disabilities since 1950. In 1977, 3 we wisely added the benefit for pregnancy and 4 childbirth. 5 Now here we are in 2015. Families have 6 changed, but the current benefit level has been 7 frozen since 1989, at $170 per week. 8 Meanwhile, more women have entered the 9 workforce, more single mothers have joined the 10 workforce, and people are living longer; and, 11 therefore, require more care. 12 It's time to modernize, and we have the 13 mechanism in place. 14 It's time for paid family leave through the 15 expansion of the TDI to keep up with these changing 16 times. 17 A-3870, S-3004, would modernize these 18 important benefits. 19 Expanding it would ensure 12 weeks of paid 20 family leave, and it would provide for at least a 21 portion of a worker's salary and provide job 22 security. 23 Specifically, the bill, over time, would 24 raise TDI to two-thirds of the average weekly wage, 25 similar to the workers' compensation benefit, and it 1 would apply to all employers, no matter the number 2 of employees, and require job protections. 3 And it's important to note that the bill 4 protects collective bargaining rights that have 5 different levels of benefits. 6 Funding should remain as it always has 7 been -- and this is important -- with the employer 8 and the employee sharing the cost, and this will 9 ensure that the benefit is sustainable and the 10 funding is predictable and affordable. 11 This bill gives New York the opportunity to 12 set an example for the nation in recognizing the 13 importance of family leave without fear of financial 14 ruin, and the improved benefit proposed are long 15 overdue. 16 Is it bad for business? No. 17 Research has shown, over and over, that 18 allowing workers paid time off during life-changing 19 events makes for better employees. Workers are less 20 stressed and more loyal, employee morale goes up and 21 worker turnover goes down; all positive changes for 22 business. 23 And according to a 2010 evaluation of 24 California's paid-family-leave program, published in 25 the "Harvard Business Review," the program was 1 proven to be very successful, and not a financial 2 burden that some business owners had feared. 3 We have to change the way we think and we 4 have to change the way we balance work and families. 5 The Assembly bill does that. 6 It does the right thing for workers, and it 7 sets the right course for other states to follow. 8 Let me just say this: 9 You know, I recently had my own situation. 10 Two years ago my mother was diagnosed with 11 cancer. She was given six months to live. She had 12 pancreatic cancer. 13 She lasted for a year and a half/18 months. 14 As with any cancer situation, the situation 15 got progressively worse, and it got -- you know, 16 certainly, the difficulty that she had to endure 17 goes without saying, but, our family suffered along 18 the way with her. 19 I'm very fortunate. 20 I'm in a situation where I can take time off 21 and I'm going to get paid for it. 22 That's just the nature of my job. It comes 23 with the territory. 24 And, you know, those last few weeks were very 25 difficult. 1 We tried to be there for her in any emotional 2 way possible. 3 Physically, the doctors were going to do 4 everything that they can do. 5 But, emotionally, my sister, myself, aunts, 6 uncles, brothers, sisters, were there for her. 7 I never had to worry about whether my job was 8 going to be there. 9 I was never going to have to worry if I was 10 going to be able, or how I was going to be able, to 11 pay my mortgage and take care of my own family. 12 It shouldn't just be, you know, the very few, 13 or the chosen few, who have the opportunity to be 14 there. 15 Because, you know, had I been in a situation, 16 where it was either staying there with her the last 17 few weeks of her life or losing my job, I probably 18 would have chosen being there with her, because you 19 only get one chance at that. 20 And on the other end of the spectrum, I am 21 very fortunate to have three very beautiful young 22 daughters. And, I remember each of the times, after 23 they were born, the first time I held them in the 24 hospital. And each those times, again, I never had 25 to worry about having to put any of them down to go 1 back to work the next day. 2 I had that opportunity, again, through the 3 nature of the job that I do. 4 And I can't tell you how much that meant to 5 me, and how much it meant to my wife, that I was 6 able to be there for those occasions, and in the 7 week or so that I was able to take off to be with 8 them. 9 Every parent, every son or daughter, should 10 have the opportunity that few of us have. 11 And, you know, on behalf of working men and 12 women in this state, it's something that we have 13 felt for a long time. 14 And we've appreciated all the work that 15 Senator Savino has put into this over the years; and 16 all of you. 17 So, we do feel the time is now. We feel that 18 the funding mechanism is there for it. 19 And I thank you for this opportunity to 20 address all of you today. 21 Thank you very much. 22 SENATOR MARTINS: Mr. Cilento, thank you very 23 much. 24 That was -- I think you've spoken for the 25 vast majority of workers in New York State, and, you 1 know, people who don't know. 2 Maybe everyone is healthy today, but you just 3 don't know what's going to happen tomorrow. 4 You don't know what's going to happen with a 5 child. 6 You don't know what's going to happen with a 7 parent or a loved one. 8 And, certainly, the ability and flexibility 9 that this provides is something that we should look 10 into. 11 And we have examples around the country where 12 other states have done this, and appear to have done 13 it successfully; and so there is a roadmap out there 14 that we can follow, certainly. 15 You know, how we apply it here in New York, 16 and what variables exist here in New York, are worth 17 reviewing as well. 18 And that's why I want to thank my colleagues 19 for having joined us with and on this issue, because 20 it is -- it's time. 21 It's time. 22 Anyone like to ask any questions? 23 Senator Sanders. 24 SENATOR SANDERS: Thank you, Mr. President 25 for your very -- 1 Well, thank you, Mr. -- Chairs. 2 And thank you, Mr. President, for your very 3 moving testimony. 4 It's -- I also lost a mother and went through 5 similar to what you're describing, so I can 6 appreciate more than I want to, what you're speaking 7 about, and the toll that it took; this toll that is 8 made all the more terrible by people understanding 9 that if they don't go back to work, they will be 10 out, and not just them, their families will suffer. 11 I am glad that New York State has reached to 12 a point where we're saying that not another day 13 needs to go on. We need to do something now. 14 What we do remains to be seen, but that we 15 do, is a good thing for all of us. 16 My poor sister, who was the prime caregiver, 17 she bore the brunt of everything. And I'm very 18 grateful she had a good system too. 19 So, I had a hand in shaping the New York City 20 Council bill on paid sick leave. And it was -- we 21 had to balance, of course, the needs of the 22 employers and the needs of the employees. 23 We believe that we met a very worthy balance. 24 And I think that we are -- you have some of 25 the best people in New York State in front of you 1 who will be grappling with this issue. 2 So thank you very much for you and the 3 organization, an incredibly worthy organization that 4 you represent. 5 MARIO CILENTO: Thank you, Senator. 6 SENATOR SANDERS: Thank you, Mr. Chair. 7 SENATOR MARTINS: Thank you, Senator. 8 Senator Carlucci. 9 SENATOR CARLUCCI: Thank you. 10 And we've been joined by 11 Senator Daniel Squadron of the Social Services 12 Committee. 13 Thanks for joining us. 14 Mr. Cilento, thank you for your testimony, 15 and some of your personal issues that you shared 16 with us. We really appreciate that. 17 One of the issues I just wanted to talk a 18 little bit more about, you had mentioned the share 19 that you think would be an appropriate way forward: 20 to have the employee and the employer contribute 21 towards the program. 22 The legislation that we've been working 23 towards really just has the employee making the 24 contribution. 25 Could you talk about what you envision as an 1 ideal plan, what that share would be? 2 Maybe give us a little more information about 3 that. 4 MARIO CILENTO: Right. 5 Well, look, you know, TDI, specifically, has 6 always been paid for by the employers and the 7 employees, so I think we have a mechanism there, 8 something we can look at now, to say, This works. 9 This has been there for a while. 10 See, for us, the most important thing, 11 Senator, is that we can work on the details, and 12 everyone here is open to it, and that's what's so 13 fantastic about what you're doing today. 14 What we need to keep in mind is that we need 15 to have, you know, a dedicated funding stream, so 16 that we know, when the next economic downturn 17 arises, and it will come, that we are ready for it, 18 so that, at some point, if this is in place, we 19 don't have to diminish the program or eliminate it. 20 So the details of how we get there, we are 21 open as a labor movement at the AFL-CIO to discuss 22 this with all of you and figure out the right way to 23 go. 24 But, you know, again, that mechanism is there 25 already as a model, to say, employers and employees 1 are ready to do that. 2 And coming from the labor-movement side of it 3 and the labor side of it to say that, in fact, the 4 employees are willing to continue to be part of this 5 and pay it with the employer, I think is something 6 substantial to discuss, as a starting point. 7 SENATOR CARLUCCI: Okay, thank you. 8 SENATOR MARTINS: Senator Savino. 9 SENATOR SAVINO: Thank you. 10 Thank you for your testimony, Mario. 11 I just have a question -- a couple of points. 12 How many members doe the AFL-CIO have -- or, 13 how many union members are there in the state of 14 New York right now? 15 MARIO CILENTO: 2 1/2 million -- a little 16 over 2 million. 17 SENATOR SAVINO: And the vast majority them 18 are covered by collective bargaining agreements that 19 allow them to negotiate around paid family leave? 20 MARIO CILENTO: Correct. 21 SENATOR SAVINO: So the 2 1/2 million union 22 workers, would you say the majority of them have a 23 paid-family-leave provision? 24 MARIO CILENTO: Some -- yes, to some extent. 25 SENATOR SAVINO: And none of their employers 1 have gone out of business, have they? 2 MARIO CILENTO: Correct. 3 SENATOR SAVINO: Thank you. 4 MARIO CILENTO: Thank you, Senator. 5 SENATOR MARTINS: Thank you, Mr. President. 6 I appreciate it. 7 Thank you, also, Mr. Neidl. Good to see you 8 as well. 9 Thank you. 10 MARIO CILENTO: Thank you. 11 SENATOR MARTINS: Our next speaker is 12 Donna Dolan, the executive director of the 13 New York State Paid Leave Coalition. 14 Good morning. 15 DONNA DOLAN: Good morning. 16 Thank you very much, Senators Martins, 17 Carlucci, and Klein, and Committee members, for 18 holding this hearing today. 19 I'd like to begin by saying I think I might 20 be the only one testifying that was here at the last 21 time the Senate had a hearing on paid family leave. 22 And, if we check the history books, it was 23 either 2007 or 2008. 24 You think it was '8, Diane? 25 Okay. 1 So, I'm delighted to be here today. 2 And, I would just like to say that we all 3 know the facts. We've been over many of them. 4 Today's working families are so different 5 than they were. 6 We stand, virtually, alone as a nation in the 7 world because we do not provide a policy of paid 8 family leave for workers in this country. 9 I was telling Senator Carlucci before the 10 hearing that we're aware of workers, men and women 11 working in New York State, that when they have found 12 out that there is no paid family leave, that they 13 have looked across the border and they are moving to 14 Canada, where Canada does have paid family leave. 15 In fact, they have 50 weeks of paid family 16 leave in Canada. A very generous policy. 17 So we should be concerned about that. 18 We're only aware of a few cases. 19 And then there all of the cases that we are 20 not aware of. 21 But I'd like to say, personally, a good 22 friend of mine's daughter graduated from Tufts in 23 Boston. Went to graduate school at Oxford in 24 England. Started working -- she's a water engineer. 25 She started working for a company there. Met 1 someone, fell in love, they got married. 2 And they wanted to come back because both of 3 their companies have offices in New York City. 4 And when they looked and they saw that 5 New York State doesn't have paid family leave, 6 whereas the UK does, and they said, We are going to 7 have two children, and we are going to stay in the 8 United Kingdom and make use of their generous 9 paid-family-leave policies, because New York State 10 doesn't have these. 11 You know, we're hearing this anecdotally. 12 We're hearing it when we go out and we talk to 13 people. 14 So the time has come, that New York needs to 15 follow the example of California, New Jersey, and 16 Rhode Island, and pass paid family leave. 17 This hearing had been scheduled for a week 18 ago Friday in New York City. 19 One of the people that was testifying was -- 20 intended to testify was CUNY Professor Ruth Milkman, 21 that many of you know. 22 And, so, Ruth has asked me to share with you 23 parts of her testimony as it relates to the work 24 that she and her fellow researcher and author, 25 Eileen Applebaum, did in the state of California 1 five years after California's law went into effect. 2 California's law went into effect in 2004, 3 5 years later they went out there and they 4 interviewed a representative sample of employers. 5 And, they found that paid family leave not 6 only makes it easier for workers to care for a new 7 child or a seriously ill family member, but it 8 promotes breastfeeding, it makes it easier to 9 arrange for child care when you're home and you have 10 a period of time to do so, and it positively affects 11 the health of family members receiving care that are 12 ill. 13 Low-wage workers with access to paid family 14 leave during a covered event experienced higher wage 15 replacement while on leave, ensuring financial 16 stability for these workers. 17 When California was considering 18 paid-family-leave legislation, the business 19 community had many concerns. 20 The state's Chamber of Commerce and other 21 business lobbyists vociferously opposed paid family 22 leave. 23 They argued it would be a job-killer, and 24 that small businesses, in particular, would be 25 greatly overburdened. 1 They were very concerned about how the work 2 of employees on leave could possibly be covered, and 3 they also expressed concern about the potential 4 abuse of the program. 5 So, the businesses that they surveyed, after 6 five years, reported that paid family leave had no 7 effect or a positive effect on the vast majority of 8 businesses in regard to profitability and 9 performance, employee turnover, and employee morale. 10 91 percent of respondents reported that they 11 had not experienced any cases of abuse on paid 12 family leave. And among the 9 percent that did 13 report abuse, it was typically only a single 14 instance of abuse. 15 Most employers, 87 percent, reported no 16 increased cost, as they were able to reassign the 17 work of the absent employee. 18 And this is what we find, time and again, in 19 these three states that have already passed this 20 law: they reassigned the work. 21 But, if you use the TDI system, which we 22 propose, to pay this benefit, then, you do not -- 23 you have money available if you want somebody to 24 work overtime, or, if you want to hire a temporary 25 employee. 1 The money is there because you're not paying 2 the wages of the absent employee on paid family 3 leave. 4 So, they also found that paid family leave 5 started to be used more by fathers. A great thing. 6 Paid family leave, then, is a social leveler 7 for income inequality, as well as gender inequality. 8 Now, last June several us attended the -- 9 President Obama's White House Summit for Working 10 Families, and, there, he invited high-road 11 businesses. 12 Many of the businesses from New York were 13 there that already provide family leave. 14 The advocates were invited, high-profile 15 women, and workers from across the country. 16 And the President called on every governor 17 that day to pass paid family leave in their state. 18 Then we heard, again, in the State of the 19 Union speech two months ago, the President once 20 again renewed his call for passage of paid family 21 leave at the state level. 22 Working families desperately need this 23 benefit, and they should not have to suffer 24 financial hardship any longer. 25 There is a national movement that has swept 1 this country for paid family leave. 2 The robust campaign underway for 3 paid-family-leave insurance here in New York State 4 were part of that movement. 5 There's growing momentum for New York to be 6 the next, and the fourth, state. 7 Since last March, the fundraising in my 8 organization has allowed us to hire a legislative 9 director here in Albany. 10 We have put two organizers on the ground: one 11 in Long Island and one in Upstate New York. 12 And, most recently, we were able to hire a 13 campaign director. 14 New groups are signing on to our campaign 15 weekly. 16 We're being invited to give presentations to 17 organizations across the state. 18 We have over 100 groups signed on. Almost 19 50 really highly engaged. 20 And every group we speak to, whether it's 21 children's advocates, labor unions, women's groups, 22 parents' groups, senior groups, caregivers, LGBT, 23 public health, lawyers, or nurses, we hear stories 24 of how New York State's families are suffering 25 financially since there is no partial-pay available 1 when they need a block of time off to care for their 2 families. 3 Thank you very much, and we hope that 4 Senate Bill 3004 will get passed this session. 5 SENATOR CARLUCCI: Great, thank you. 6 We've been joined by Senator Venditto and 7 Senator Kennedy. 8 Thank you for joining us. 9 Just a quick question, Ms. Dolan. 10 You had talked about the other states, 11 California. 12 One of the things maybe we can talk a little 13 bit about is, when California first adopted this 14 legislation in 2004, originally, they had 12 weeks 15 of paid leave. That was later modified to 6 weeks. 16 And I know you've cited some of the studies 17 that have been done over the time period that 18 California's model has been in effect. 19 Could you talk maybe a little bit about what 20 happened there; why that change happened? 21 DONNA DOLAN: Well, actually, 22 Senator Carlucci, it was 12 weeks, until the very 23 last second before the bill was passed, when it got 24 reduced to 6 weeks. 25 SENATOR CARLUCCI: Okay. 1 DONNA DOLAN: So we know Senator Gillibrand's 2 federal bill calls for 12 weeks. 3 The unpaid FMLA is 12 weeks. 4 If you talk to any medical people, the 5 minimum time a woman should be home, and parents 6 caring for their child, is approximately 6 months. 7 So we certainly think 12 weeks/3 months is 8 more than reasonable. 9 SENATOR CARLUCCI: Great. Thank you. 10 Senator Savino. 11 SENATOR SAVINO: Thank you. 12 Thank you, Donna. 13 I'm going to go back to California, because 14 as you pointed out, I think it was -- it may have 15 been 2007, I'm not sure, because I remember when 16 Governor Spitzer was first elected, he decided to 17 make paid family leave a priority. And at the time, 18 Senator Tom Morahan, the late-Senator Morahan, he 19 carried the bill with myself. 20 The -- California was a new experience then. 21 It was 2004. 22 New Jersey had not quite adopted their plan. 23 DONNA DOLAN: Right, theirs was 2009 that it 24 went into effect. 25 SENATOR SAVINO: So at the time, there was a 1 discussion about the size of the workforce that this 2 should apply to. 3 As you know, FMLA applies to employers of 4 50 or more -- 5 DONNA DOLAN: Right. 6 SENATOR SAVINO: -- so as not to have an 7 effect on small businesses. 8 In California, what is the size of the 9 employer -- what's the size of the workforce that's 10 qualifying for the paid-family-leave benefit? 11 DONNA DOLAN: Well, because it's paid through 12 a TDI program, all employees are eligible; as in 13 New Jersey, all employees are eligible. 14 It's just the job-protection piece is for 15 employers of 50 or above. 16 SENATOR SAVINO: So an employee in California 17 or New Jersey could take the full 12 weeks, but, it 18 would trigger 6 weeks as FMLA under the federal 19 program, with no -- no, with job protection, and 20 6 weeks of paid? 21 DONNA DOLAN: Well, no. 22 It would be -- you take paid -- family leave, 23 whether it's unpaid or paid, it has to be taken 24 consecutively in one year. 25 You don't take six weeks under FMLA, and then 1 take six weeks paid. 2 SENATOR SAVINO: But you could take 12 weeks 3 consecutively: 6 paid, 6 non? 4 DONNA DOLAN: In New Jersey and California, 5 if you are -- if it's for childbirth reasons, so, 6 there's already six weeks maternity leave, 7 approximately. 8 So, then, the case of a newborn, you would 9 add the 6 weeks of paid family leave on top of that, 10 for a total of 12 weeks, but only in the case of 11 newborn, newly adopted, foster-care placement of a 12 child. 13 When it comes to a sick family member, in 14 California or New Jersey, there is only six weeks 15 available of leave. 16 SENATOR SAVINO: And if you have a 17 "leave" policy that your employer provides, with 18 paid sick time, or annual time, are you required to 19 exhaust those leave balances before you apply for 20 paid family leave? 21 DONNA DOLAN: Well, I think it depends. 22 It depends on what your specific employer's 23 policies are with regard to that. 24 SENATOR SAVINO: But they could establish 25 those policies; that you use one set of leave 1 balances prior to applying for this benefit? 2 DONNA DOLAN: I am going to ask my colleagues 3 back here. 4 SENATOR SAVINO: If you don't know the 5 answer, you can get back to me later, that's fine. 6 I'm just curious. 7 DONNA DOLAN: I will get you the answer. 8 My colleague Sherry Leiwant has been involved 9 in writing bills around the country, so she would be 10 the better person to ask if that could possibly 11 happen. 12 SHERRY LEIWANT: [Not at the microphone.] 13 Yeah, I mean -- but I can talk [inaudible]. 14 DONNA DOLAN: She can talk more about that. 15 SENATOR SAVINO: Thank you, Donna. 16 SENATOR CARLUCCI: Thanks, Senator Savino. 17 Senator Martins. 18 SENATOR MARTINS: Thank you. 19 And thanks for being here today. 20 I appreciate it. 21 You know, I think we all agree, and we 22 understand, that New York has a structure that 23 allows to us consider it. 24 Those states that don't, we know what 25 happened in Washington State when they passed a 1 paid-family-leave law and they didn't have a 2 structure to finance it, and they've been struggling 3 with it ever since. 4 But now that we're 10 years post California, 5 and we've seen the studies that are associated with 6 it, how would you -- I mean, we have a series of 7 bills that are here in the Legislature -- how would 8 you structure a bill that allowed for paid family 9 leave through a TDI structure such that we have in 10 New York? 11 What would you like to see as part of that? 12 DONNA DOLAN: What I'd like to see, I'd like 13 to see 12 weeks of leave, and I would like to see 14 our current TDI program in New York State modernized 15 and expanded. 16 I can't tell you the number of comments we 17 hear from people that are really struggling 18 financially, because that cap has been frozen at 19 $170 a week for the last, now it's 26 years. 20 SENATOR MARTINS: Since 1989, yes. 21 DONNA DOLAN: Since 1989. 22 It is time that that be dealt with. 23 And, certainly, Senate Bill 3004, that's the 24 other half of it. 25 The first half is establishing the 1 paid-family-leave benefit that is totally employee 2 paid through small employee payroll deductions 3 establishing the benefit. 4 Then the other part of it is modernizing the 5 temporary disability insurance system. 6 So all it's asking is that -- and that's a 7 shared cost, as Mario Cilento said. 8 And what employers would be asked to do, is 9 to pay a little bit, in a very small increase in 10 insurance premiums, in order to bring the temporary 11 disability insurance cap up. 12 Our bill calls to do it gradually, so that 13 it's approximately $606 a week, the cap, after 14 4 years. 15 SENATOR MARTINS: So we have a -- we have 16 two elements, just simply because of TDI and the 17 cap, again, since 1989. 18 We have an effort to increase TDI benefit to 19 bring it current; and then, also, obviously, this 20 paid-family-leave component. 21 How would you see -- given the models that 22 are out there, whether it's California, New Jersey, 23 or Rhode Island, how would you see funding it? 24 DONNA DOLAN: Well, I would see funding it 25 through the small employee payroll deduction. 1 Our bill calls for 45 cents a week in 2 year one. And then, beginning in year two, the 3 superintendent of financial services would make the 4 determination of what the cost would be. 5 But, the Fiscal Policy Institute estimated 6 that, by year four, that cost would only go, from 7 45 cents, to, probably, approximately 88 cents, 8 definitely under a dollar a week, for the employee 9 to pay for the paid-family-leave benefit. 10 SENATOR MARTINS: Do you have a sense of what 11 the employee contribution as versus employer 12 contribution is in California, New Jersey, and 13 Rhode Island? 14 Because they appear -- certainly, California 15 appears to have found a contribution rate that has 16 made their system stable. 17 DONNA DOLAN: Yes. 18 SENATOR MARTINS: I think it's early yet to 19 determine whether or not Rhode Island's there. And 20 New Jersey appears to be hitting their mark. 21 What is their contribution rate? 22 And what would that contribution rate have to 23 be in New York to have that same level of stability? 24 DONNA DOLAN: Well, the difference between 25 the California TDI programs and the New Jersey 1 programs, California is graduated. It's based on a 2 percentage of your salary, which is really a fairer 3 system. 4 However, the system that was developed here 5 in New York, it's the flat rate. 6 The employer cap right now, currently, is 7 60 cents a week, and it has been since 1950. 8 SENATOR MARTINS: Well, Ms. Dolan, I'm 9 suggesting that we have a blank canvas; and if we 10 have a blank canvas, which ones of those models that 11 are out there would you advocate for? 12 Which one makes sense and provides the level 13 stability that you think would be necessary to 14 sustain, not only a viable TDI program, but also one 15 that includes paid family leave? 16 DONNA DOLAN: Well, I think I'd look to, 17 obviously, the cap -- I don't know if I mentioned 18 this -- a cap on California's benefit in 2015 is 19 $1,104 a week; so it's 55 percent of an employee's 20 salary, up to the cap of $1,104 a week. 21 Rhode Island's cap is, I think, 776, off the 22 top of my head, dollars a week. 23 New Jersey's cap is, I think, just a little 24 over $600 a week currently. 25 I think if you look at New Jersey's, the 1 employee, I think the average employees paid 2 annually through their TDI system last year was 3 approximately $23 per employee out of the employee's 4 pocket. 5 It comes out of their paychecks, but that 6 would be the grand total for the year. 7 I think, you know, something where the cost, 8 you get the biggest bang for your buck, and, 9 certainly, we don't want to burden employees, so 10 I think something similar to that. 11 California, in order to do a California 12 system, you would have to redo the TDI system. 13 SENATOR MARTINS: No, I understand that. 14 If I understand California's contribution, 15 and that's really where I was going, their 16 contribution to TDI and paid family leave is 17 1 percent of salary -- 18 DONNA DOLAN: Right. 19 SENATOR MARTINS: -- up to $104,000. 20 So, you know, obviously, the more money 21 somebody makes, the more they contribute into the 22 system, but there's also a greater return for them 23 when they do opt to take the benefit. 24 DONNA DOLAN: Exactly. 25 SENATOR MARTINS: So, if they're paying 1 1 percent of $104,000, it's $1,000 or so a year, 2 which translates into, you know, significantly more 3 than the 28 or 38 dollars that we're talking about 4 in New Jersey. 5 So, you know, again, I'm looking for 6 sustainability, and I'm looking for an opportunity 7 for us to look at something that isn't going to 8 require us going into the, you know, general fund, 9 and having the general fund subsidizing it; while at 10 the same time, ensuring that it's going to be stable 11 and be there and available for people when they need 12 to use it. 13 So I appreciate -- 14 DONNA DOLAN: I think the model would be the 15 New Jersey model -- 16 SENATOR MARTINS: Thank you. 17 DONNA DOLAN: -- that I would look at. 18 Thank you. 19 SENATOR CARLUCCI: Thanks, Senator Martins. 20 Senator Squadron. 21 SENATOR SQUADRON: Thank you very much. 22 So what has been the negative impact on 23 employment in states that have paid family leave? 24 Has it been dramatic? 25 DONNA DOLAN: There's been no negative impact 1 on employment in California. 2 With regard to -- 3 SENATOR SQUADRON: No negative impact at all? 4 DONNA DOLAN: No negative impact. 5 Just like -- the same thing, you know, if 6 you're talking about paid family leave, if you're 7 talking about paid sick six days, it's the same 8 thing. 9 There is not a negative -- the last time we 10 looked, California was alive and well and thriving. 11 It hadn't fallen into the Pacific, hadn't broken 12 off. 13 And, you know, we don't have -- employers 14 have not left the state. You haven't been reading 15 about the exodus of employers from the state of 16 California either because of their paid-family-leave 17 law or their paid-sick-time laws. 18 SENATOR SQUADRON: So, in other words, new 19 families, new moms, have the ability to take care of 20 their children without needing to make the choice 21 between doing that and going into debt or with an 22 easier choice; a sick spouse, an ailing spouse, or 23 parent, have the ability to take care of, and that 24 vastly changes people's lives. 25 DONNA DOLAN: Vastly. 1 SENATOR SQUADRON: And it has no impact on 2 employment, that's now been measured for 10 years in 3 California. 4 We have in it a neighboring state, a state 5 that -- I think there was no competition, but a 6 state that we sometimes compete with, in New Jersey. 7 So, I mean -- and, forgive me for this, 8 because you may flip the answer right back at me: 9 What's the problem? 10 Why is this so hard to do? 11 DONNA DOLAN: Why I think it's been so hard 12 to do, is because the temporary disability insurance 13 program has been frozen for 26 years, and needs to 14 be modernized and made relevant to today's 15 workforce. 16 And that's what's been holding up getting 17 paid family leave passed in New York State. 18 So the time now is to grapple with it. 19 And it's, you know, very small increases to 20 the insurance premiums for employers, and this is a 21 shared benefit in terms of upgrading the TDI system. 22 SENATOR SQUADRON: And let me just ask: 23 When TDI was last increased in... 24 DONNA DOLAN: 1989. 25 SENATOR SQUADRON: ...in 1989, in the 1 two years after that increase, did we see a big hit 2 on employment in New York State because, suddenly, 3 employers were having an increase, employers and 4 employees had an increased TDI contribution? 5 DONNA DOLAN: Senator Squadron, I don't know 6 the answer to that question in terms of, from '89 to 7 '91, and what the effect was for the TDI increase. 8 SENATOR SQUADRON: You certainly haven't 9 heard of that? 10 DONNA DOLAN: Absolutely not. 11 SENATOR SQUADRON: So let me ask that 12 question: Why -- how could we possibly have a 13 benefit that was appropriate in 1989, and is, at the 14 same level, appropriate in 2015? 15 DONNA DOLAN: Because there hasn't been the 16 political will to change this. 17 SENATOR SQUADRON: Right, I guess what I'm 18 asking is: Is there sort of a consensus -- you seem 19 to work on these issues a lot, you seem to know a 20 great deal about them. 21 Is there a consensus that it was a bloated 22 benefit in 1989 and 1990? 23 DONNA DOLAN: I don't think, at all. 24 SENATOR SQUADRON: Interesting. 25 Or 1950, you said, that was when the 1 contribution level was the same? 2 DONNA DOLAN: 1950, that's when the TDI 3 program started. 4 SENATOR SQUADRON: And that's when the 5 employer contribution was defined? 6 DONNA DOLAN: Yes. 7 SENATOR SQUADRON: Was it considered bloated? 8 Are there text books about the TDI benefit 9 just running rampant through employment in 10 New York State in the 1950s? 11 I have not read them. 12 DONNA DOLAN: We'd have to go back and check. 13 SENATOR SQUADRON: Okay. 14 So, what's the reason that it's so hard to 15 raise the TDI benefit? 16 DONNA DOLAN: I think the fact that employers 17 are going to have very small increases to their 18 TDI insurance premiums. 19 We're talking about insurance premiums, and 20 small increases to those, to modernize this program. 21 SENATOR SQUADRON: And just take me through 22 again what that increase would be, dollar amount? 23 DONNA DOLAN: The dollar amount -- 24 SENATOR SQUADRON: I'm sorry, cent amount? 25 DONNA DOLAN: The amount in year one, in 1 terms of the increase to the insurance premiums, is 2 $1.22 a week. 3 And by year four, this would rise to $2.10 a 4 week. 5 So we're talking, by year four, you know, a 6 little over 100 bucks per employee per year. 7 SENATOR SQUADRON: Total contribution? 8 DONNA DOLAN: Total, yes. 9 Total increase in the insurance premiums. 10 SENATOR SQUADRON: Total, $100 per employee 11 per year. 12 And if we get that, what we would get is -- 13 DONNA DOLAN: What we would get would be a 14 cap of -- now, we're using the latest numbers 15 available -- a cap of $606 a week on TDI in 16 year four. 17 SENATOR SQUADRON: And, an ability to 18 actually have paid family leave -- 19 DONNA DOLAN: Correct. 20 SENATOR SQUADRON: -- so that new moms, or 21 dads, for that matter, are actually able to take 22 care of their kids, when they have them, without 23 going into debt or losing their employment -- 24 DONNA DOLAN: That's correct. 25 SENATOR SQUADRON: -- I guess not losing 1 employment because of the federal rules. 2 But without losing significant income, take 3 care of an ailing, God forbid, dying parent, spouse, 4 who needs it? 5 DONNA DOLAN: That's correct. 6 SENATOR SQUADRON: And let me just ask: 7 A hundred bucks a year, that -- is that a large 8 percentage of sort of the average employee costs in 9 the state of New York? 10 DONNA DOLAN: That would be in year four, 11 to -- 12 SENATOR SQUADRON: We're looking at $100 a 13 year. 14 So, you know, what does an employee cost an 15 employer, on average, in New York State? 16 DONNA DOLAN: A lot of money. 17 [Laughter.] 18 SENATOR SQUADRON: More than $10,000 a year, 19 on average? 20 DONNA DOLAN: Well -- 21 SENATOR SQUADRON: Minimum wage would get 22 them up to, like -- 23 DONNA DOLAN: -- you know, we're talking 24 about wages -- 25 SENATOR SQUADRON: Minimum wage gets them up 1 to near $18,000, so, that's at a minimum. 2 DONNA DOLAN: Right. 3 SENATOR SQUADRON: Right? 4 Average is, something up to about $63,000, 5 I think. 6 So, $100 a year, total -- 7 DONNA DOLAN: Right. 8 SENATOR SQUADRON: -- with a slow phase-in. 9 Let me ask one other question: Why not just 10 have all taxpayers pay for it and pay for it out of 11 the general fund? 12 I know that's one of the options before us. 13 DONNA DOLAN: Well, I think there's a 14 concern, as was mentioned earlier, in terms of -- by 15 Mario Cilento, in terms of an economic downturn. 16 This would -- there would be concern that 17 this benefit would disappear, and would be -- need 18 to be used to pay for other -- take care of other 19 matters. 20 So that's why we feel that it needs to have 21 stability. 22 The three states that have already done it 23 use the stability of their temporary disability 24 insurance program. 25 We are one of five states that has temporary 1 disability insurance, and of those states, it's only 2 New York and Hawaii that haven't instituted paid 3 family leave yet. 4 And, you know, we have this proposal, 5 Senate Bill 3004. 6 And I see Senator Addabbo has joined us. 7 And that would provide paid family leave 8 through expansion and modernization of the temporary 9 disability insurance system. 10 SENATOR SQUADRON: Great. 11 So is it fair to say -- and, thank you. 12 Is it fair to say that the more fiscally 13 responsible way to increase the temporary disability 14 insurance benefit and create paid family leave in 15 New York State would be through employer and 16 employee contributions? 17 DONNA DOLAN: I believe, yes. 18 SENATOR SQUADRON: So that we don't end up 19 with an obligation for taxpayers that requires broad 20 tax support over time, it's an insurance program, in 21 both instances, that should be funded by the 22 beneficiaries of that insurance program -- 23 DONNA DOLAN: That's correct. 24 SENATOR SQUADRON: -- both the employer and 25 the employee? 1 And then the second question is -- just, math 2 is not always my thing -- $100 a year is -- 3 DONNA DOLAN: In year four. 4 SENATOR SQUADRON: -- $100 a year, 4 years 5 from now -- 6 DONNA DOLAN: Right. 7 SENATOR SQUADRON: -- is about 30 cents a 8 day? 9 DONNA DOLAN: Do the math. 10 Yeah, a day. 11 SENATOR SQUADRON: So for 30 cents a day, we 12 could have a temporary disability insurance program 13 that does what it's supposed to, and what it's 14 supposed to have done in this state since 1950, 15 increase a benefit that has been stagnant since 16 1989; and, yet, we somehow still think has relevance 17 today, and, create a system, where new parents have 18 a chance to take care of their kids without going 19 into debt, people whose family members, spouses, 20 parents themselves are aging or dying, have some 21 ability to actually spend some time with them and 22 create some comfort, and still have some income, for 23 30 cents a day, roughly? 24 DONNA DOLAN: Yes. 25 SENATOR SQUADRON: Thank you very much. 1 I appreciate it. 2 DONNA DOLAN: A real bargain. 3 SENATOR SQUADRON: Heavy lift, I guess. 4 DONNA DOLAN: Thank you. 5 SENATOR CARLUCCI: Thank you, 6 Senator Squadron. 7 We've been joined by Senator Addabbo. 8 And, Senator Savino for a question. 9 SENATOR SAVINO: I'm getting old now, so I'm 10 starting to get flashbacks from previous -- 11 DONNA DOLAN: What do you say we work on this 12 together, Diane? 13 SENATOR SAVINO: It's been a long time. 14 On the California model, that's a mandatory 15 program; correct? 16 DONNA DOLAN: Because it's through the TDI -- 17 SENATOR SAVINO: Because it's through the 18 TDI. 19 DONNA DOLAN: -- and every employer is 20 mandated to have TDI. 21 SENATOR SAVINO: And -- because I remember in 22 many of the iterations of this bill, there was 23 discussions about whether we should make it 24 voluntary, so that employees who did not want to pay 25 the extra 45 cents a paycheck would not have to do 1 so. 2 But, in order to make the TDI work, and we 3 all agree, I think, that that's something that's 4 long overdue, that it would require a mandatory 5 model in New York State as well. 6 Would you say that's fair? 7 DONNA DOLAN: That's fair. 8 SENATOR SAVINO: In California, are employers 9 allowed to pass through the increased costs? 10 Because when we put our original bill 11 together, it allowed for 45 cents per paycheck by 12 the employee, and I think there was just like a 13 50 cents more for employer contribution, but, the 14 State of New York actually allows employers to pass 15 it through, so the entire 95 cents, at the time, 16 I think it was, could have been passed through to 17 the employee. 18 Is that still -- is that the way they do it 19 in California as well, or do employers have to make 20 the contribution? 21 DONNA DOLAN: I would defer to my colleague, 22 Sherry, or Nancy, to answer that question. 23 UNKNOWN SPEAKER: [Not at a microphone.] 24 [Inaudible] there is no employer 25 contribution. 1 DONNA DOLAN: It's all employee paid. 2 SENATOR SAVINO: Right, it's all employee in 3 California? 4 UNKNOWN SPEAKER: [Not at a microphone.] 5 In California. 6 DONNA DOLAN: TDI is totally paid for by 7 employees. 8 SENATOR SAVINO: Right. 9 And in New York, you can -- employers can 10 pass the increased costs, the weekly costs, through 11 to employees, so the employee could, potentially, 12 pay the entire cost? 13 DONNA DOLAN: Well, I think what typically 14 happens is, because it's less than a dollar a week, 15 it's 60 cents, that most people aren't even aware 16 it's deducted from their paycheck because it's less 17 than a dollar, and the employer picks it up. 18 SENATOR SAVINO: All right, so two more 19 questions, I just want to clarify. 20 The qualifying life events that are covered 21 by the federal FMLA, are they identical to the 22 qualifying life events in the California, 23 Rhode Island, New Jersey, paid-family-leave program? 24 DONNA DOLAN: Yes. 25 We're talking about the birth of a child, we 1 are talking about a sick family member. Correct. 2 SENATOR SAVINO: And then the states that 3 don't have paid family leave, those qualifying life 4 events occur all the time, don't they? 5 DONNA DOLAN: The states that don't have paid 6 family leave? 7 SENATOR SAVINO: And in the states that do 8 have. 9 So the point I'm trying to make is, those 10 qualifying life events are going to happen anyway -- 11 DONNA DOLAN: Absolutely. 12 SENATOR SAVINO: -- whether or not we create 13 a wage-replacement mechanism. 14 DONNA DOLAN: That's correct. 15 SENATOR SAVINO: Okay. 16 And in the states that have it, are there 17 protections from -- are there worker protections? 18 Because that was one of the many discussions 19 that we had back in the early part of this 20 legislation, and New York being an at-will-employee 21 state in many ways, you know, would employers be 22 required to keep an employee who chose to use it? 23 So the smaller business who couldn't afford 24 to go 12 weeks without their employee, I think the 25 original bill allowed an employer to separate them 1 from service, but they would at least have a wage 2 replacement for that period of time that they were 3 dealing with that qualifying life event. 4 In California, in New Jersey, and 5 Rhode Island, is there, in fact, worker protection 6 so that you cannot separate that person while 7 they're having that qualifying life event? 8 DONNA DOLAN: The Rhode Island program has 9 total employee job protection. 10 SENATOR SAVINO: California doesn't, though? 11 DONNA DOLAN: California and New Jersey 12 follow the FMLA, which is, you know, less than 50, 13 has no job protection. 14 SENATOR SAVINO: Okay. 15 And the last point, the question has come up 16 more than once about why we haven't done -- or why 17 we didn't do the TDI, why we couldn't get it done, 18 why we didn't get this done originally. 19 And that's when I had my flashback. 20 One of the overarching issues, as we began 21 the pubic discussion about paid family leave and 22 raising the TDI, was also bringing another 23 antiquated system into the twentieth century; and 24 that was our unemployment insurance benefit. 25 And at the time, the decision was, shore up 1 UI and bring the weekly benefit up. 2 And there was no political appetite to do 3 both. 4 So that's the answer to that question. 5 Thank you. 6 SENATOR CARLUCCI: Thank you, Senator Savino. 7 And thank you, Donna Dolan, for your work. 8 There's no further questions. 9 Thank you. 10 DONNA DOLAN: Thank you very much. 11 SENATOR MARTINS: Our next witness is 12 Nancy Rankin, who is the vice president for policy, 13 research, and advocacy at Community Service Society. 14 Good morning. 15 NANCY RANKIN: Good morning. 16 Thank you very much for holding this hearing 17 today. 18 Thank you, Senators Martins, Carlucci, all 19 the members of the Committee, for the opportunity to 20 testify in support of paid family leave, a policy 21 that can drive economic growth by enabling women to 22 participate fully in the labor market. 23 My name is Nancy Rankin. I'm vice president 24 for policy, research, at Community Services Society, 25 a non-profit organization that works to advance 1 upward mobility for low-income New Yorkers. 2 I would describe paid family leave not as a 3 benefit, but as an economic necessity for all 4 working families; but especially for working women 5 and for those struggling to survive on low wages. 6 In New York City, where my organization is 7 based, 1 out of 4 working women lives in a 8 low-income household. 9 That's close to half a million working women 10 struggling to get by on less than 38,000 for a 11 family of 3. Their jobs and earnings are essential 12 to keep their families afloat. 13 These same workers are also the customers of 14 local businesses, so when they do better and have 15 some income replacement, local businesses also do 16 better. 17 A mere 5 percent of workers in the bottom 18 wage quartile have paid family leave now from their 19 employers. 20 Some might argue that workers could use 21 saved-up vacation and sick days to deal with a 22 serious family health crisis or a newborn, but that 23 ignores the stark reality that half of low-wage 24 workers do not even get any paid vacation, according 25 to 214 -- 2014 BLS statistics. And outside of 1 New York City, workers don't even have a right to a 2 few paid sick days. 3 Low-paid workers are unable to save anything 4 from their inadequate wages to sustain themselves 5 and their families for days, much less for weeks, 6 without a paycheck. 7 According to a CSS (unintelligible) survey 8 that we do every year, close to half of low-income 9 working mothers in New York City have less than $500 10 to fall back on in an emergency, so 7 days lost pay 11 for them would just wipe out their entire life 12 savings. 13 When a critical family need triggers job 14 loss, a low-income family's hardships skyrocket. 15 We found that among low-income households 16 reporting job loss, the proportion failing to meet 17 their rent doubled. 18 Compared to low-income families that didn't 19 have a job loss in the past year, they were 20 24 percent more likely to be on Medicaid, 32 percent 21 more likely to receive food stamps. 22 So paid leave that enables people to hold 23 onto their jobs and to receive some modest wage 24 replacement is good public policy, and modernizing 25 our existing TDI insurance system is a smart, 1 affordable, self-sustaining way to provide that paid 2 family leave. 3 So I wanted to make two points. 4 First, to be meaningful, benefits need to be 5 adequate. 6 And you've heard about the current TDI cap of 7 $170 a week. 8 That's dramatically below that of every other 9 TDI state, where the caps range from 552 to over 10 1,000 a week. 11 We believe we need to gradually raise the 12 maximum, concurrently, for the existing TDI purposes 13 and the new family paid leave, and that weekly 14 benefits below the cap should be set at two-thirds 15 of an employee's own average weekly wage, because 16 for a low-wage worker, half a normal paycheck, much 17 less $170, is not enough to survive on. 18 This is especially true with medical bills to 19 pay and a new baby to care for. 20 Two-thirds is what New Jersey does. 21 Two-thirds is the international standard. 22 Two-thirds is workers' comp. 23 I just wanted to make the point, because 24 there's been some confusion in some of the press 25 accounts, where they say everybody would get 606, 1 the average weekly wage. 2 606, the average weekly wage, would just 3 be -- would be the maximum. But what you get is 4 based on your own weekly wage. 5 The second point I wanted to make is that all 6 private-sector employees will be paying for 7 insurance coverage, they will all be contributing, 8 so it should cover all-size employers, just as TDI 9 does, and it's important for it to be consistent 10 with that. 11 If you don't cover smaller firms; for 12 example, if you didn't cover firms of less than 25, 13 that would leave out 2 million workers, or, over 14 30 percent of all the private-sector workers 15 statewide. 16 Growing up as the daughter of a small 17 business owner, and having managed small operations 18 myself, I understand the concerns that it might be 19 harder for small business to manage a worker's 20 temporary absence. 21 But I think we should keep in mind that the 22 vast majority of paid family leave, over 80 percent, 23 based on the experience of other states, would be 24 taken by parents of newborns, to care for newborns, 25 which gives employers time to figure out how to 1 handle an expected absence. 2 And this is, in fact, something most 3 employers have to do now. 4 The big difference will be that, with paid 5 family leave, an employee will be able to draw 6 modest insurance benefits to avoid the severe 7 financial hardship and debt that may take them years 8 to pull out of. 9 Others have testified about the research in 10 California, showing fears that paid family leave 11 would be a burden on small businesses and subject to 12 abuse, were not borne out. 13 But, we need not look all the way to 14 California. 15 We can look right here in our state, to 16 New York City, where I'm sure Senator Sanders 17 remembers the exact same concerns were raised: that 18 requiring small businesses to provide paid sick days 19 would be a job-killer. 20 So what's happened in the year since paid 21 sick time took effect in New York City? 22 New York City has experienced record job 23 growth and is the strongest local economy in the 24 state, according to a recent report from the 25 New York Fed. 1 Fortunately, New York is poised and ready to 2 become the next state to provide paid family leave. 3 Not only do we have a TDI program already in 4 place that can serve as the foundation, we have the 5 Administration's own Medicaid redesign team that 6 made enacting paid family leave one of its top three 7 priorities in its October 2014 report. 8 This group of statewide leaders, that I had 9 the honor of being part of, cited the ample 10 research, showing the benefits to maternal and child 11 health, as well as projected long-run savings from 12 improved health outcomes, averting job loss, induced 13 Medicaid enrollment, and reducing hospital 14 readmissions by enabling family caregivers to assist 15 with increasingly complicated post-discharge needs. 16 And, we have widespread public support. 17 84 percent of New York City adults polled 18 support modernizing TDI to provide paid family 19 leave. 20 Most striking is the growing intensity of 21 that support. 22 When we polled on this 10 years ago, 23 42 percent said they strongly support it. 24 Now two-thirds say they strongly support it, 25 and more than 8 out of 10 support it, and that 1 support crosses party lines. 2 89 percent of Democrats favor it, 83 percent 3 of Independents, and two-thirds of Republicans all 4 favor paid-family legislation. 5 Clearly, Senator Squadron, paid family leave 6 is an idea whose time has come, and it's time for us 7 to do this. 8 So, let me close with a story told to me by 9 Marjorie Salas (ph.), a pediatric oncology nurse in 10 Manhattan. 11 She recounted her experience translating for 12 a physician about a child's condition to her family. 13 "I could see her mother's eyes fill with 14 tears, and the father holds his daughter a little 15 bit tighter in his arms, as I gently told the family 16 nothing else could medically be done to save their 17 3-year-old's life. 18 "The sadness in the room was overpowering. 19 "After explaining what they might encounter 20 in the next few days, the conversation changed 21 direction dramatically. 22 "Could the father take time off from work to 23 spend the last few days of his little girl's life by 24 her side? 25 "He chose to be with her and go a week 1 without pay. 2 "A week without pay would take a serious 3 financial toll on the family, because his wife 4 didn't work, they had another child to support, and 5 they had mounting medical bills to pay. 6 "She said to me, 'How do you ask a parent to 7 make a decision between supporting their family and 8 spending what little time is left with their tiny 9 daughter before she dies?'" 10 Your consideration of the legislation being 11 debated today can bring us one step closer to no 12 longer asking parents to make impossible choices. 13 Thank you. 14 SENATOR MARTINS: Ms. Rankin, thank you very 15 much. 16 I neglected to call on Sherry Leiwant as 17 well. 18 Would you like to join us at this point? 19 Why don't you come down and we'll hear from 20 you as well, and then we'll take questions together. 21 Did I pronounce that right? 22 Lie-want (denoting pronunciation)? 23 SHERRY LEIWANT: Lee-want (denoting 24 pronunciation). 25 SENATOR MARTINS: Leiwant. Excuse me. 1 Ms. Leiwant is the president and co-founder 2 of A Better Balance. 3 Welcome; and my apologies for not having 4 called on you earlier, but I did hear that you 5 wanted to testify together. 6 SHERRY LEIWANT: Yes. 7 SENATOR MARTINS: So, please. 8 Thank you. 9 SHERRY LEIWANT: Either way, it's perfectly 10 fine. 11 And, I wanted to thank you, Senator Martins, 12 Senator Carlucci, the entire -- both Committees. 13 I'm very happy to be here. 14 Thank you for the opportunity to testify on 15 this really important issue. 16 My organization is a legal-advocacy 17 organization, and we've been working on this issue 18 here in New York as part of the steering committee 19 that Don and Nancy are also a part of, and writing 20 laws around the country on paid family leave, 21 because it is an issue whose time has come, and 22 there's a lot of excitement about it. There are 23 many, many states that are introducing laws. 24 And I think, you know, you've heard from my 25 colleagues here that the United States stands alone, 1 and it comes as a shock to a lot of people that we 2 do stand alone on being the only industrialized 3 country that doesn't have some kind of paid family 4 leave when a new child is born, to take care of a 5 sick family member. 6 With no right to paid family leave, that 7 means that people are relying on their employers to 8 provide that benefit, and it's an expensive benefit, 9 and many, many employers, they just can't do it. 10 And, so, only about 12 percent of workers are 11 covered by some form of paid family leave that is 12 given by employers, and only 4 percent of low-income 13 workers. 14 And, therefore, that's why it's essential for 15 government to step in and to help; to help both 16 employers and employees with these issues. 17 And you've also heard that we need to 18 modernize, that women are in the workplace now, 19 they're half the workforce; and, therefore, we need 20 to address issues around new children, taking care 21 of family members. 22 And I think that it has become now an issue 23 that is being recognized. 24 The President mentioned it in his State of 25 the Union in January, and, as Donna said, in June at 1 the summit at the White House. He called on all of 2 the states to consider paid family leave because 3 it's going to be hard to do it in Washington, but we 4 can really set the example, we can really take the 5 lead. 6 And you've heard about California, 7 New Jersey, and Rhode Island. 8 I can also tell you, we're writing laws 9 around the country. 10 We have about 10 laws that have been 11 proposed, including in our neighboring state of 12 Connecticut where there really is a lot of traction 13 around it. 14 Those are states that do not have a temporary 15 disability insurance program. 16 It's going to be very expensive to start this 17 program, but the states are considering it. 18 And, we are really lucky that we have a TDI 19 program that we can build on, at virtually no cost 20 to the State, and as we're proposing with family 21 care, at least no cost to the employer. 22 It verges almost on embarrassing that the 23 states around us are considering this, and that we 24 haven't done it yet. 25 And, as you've also heard from the previous 1 testimony, and also from some of the statements from 2 the community itself, the emergence of paid family 3 leave is important because it's a win for everybody. 4 It's a win for workers, it's a win for 5 businesses, for children, for elders, and for the 6 economy. 7 It makes it easier for new parents, both 8 mothers and fathers, to care for their children 9 without undue financial hardship. 10 It makes it easier to care for our elders. 11 And the benefits of family caregiving, as our 12 population ages, can't be overestimated. 13 That's a savings also to the public, as you 14 heard from Nancy. 15 And I just want to emphasize it really is 16 good for business. 17 Studies have shown that paid family leave 18 leads to business savings by increasing retention, 19 employee morale, lowering turnover costs, improving 20 productivity. 21 And that's something that was found in 22 California, and it is in some ways, just logical. 23 I want to talk about the specific proposals 24 for paid family leave. 25 A Better Balance has been -- we've been 1 helping to write these laws. And you have a -- you 2 have two before you in the Senate. And, of course, 3 the law that passed in the Assembly last week. 4 The bill that passed the Assembly, and has 5 been proposed by Senator Addabbo, who is the sponsor 6 here in the Senate, S-3004, the elements of that, 7 are that we will be using the temporary -- the state 8 temporary disability insurance program as a base and 9 as a system. 10 It provides workers with wage replacement 11 during time off from work to care for a child in the 12 first 12 months after the child's birth or placement 13 for adoption. And it may also be used to care for a 14 seriously ill family member. 15 And we've also added, and this is kind of an 16 addition from last year, our military families, to 17 care for an injured service member or to prepare for 18 deployment. 19 That was something that was added to the 20 FMLA, and we felt it should be added here in 21 New York as well, to support our service members and 22 their families. 23 The "family members" listed are: child, 24 spouse, domestic partner, parent, grandchild, 25 grandparent, sibling, and parent of a spouse or 1 domestic partner. 2 That bill provides for 12 weeks of benefits. 3 And as you also heard, it's two-thirds of the 4 worker's average weekly wage, up to the maximum cap 5 that will be increased year by year. 6 And I want to also emphasize, again, I mean, 7 we've had a lot of discussion about it, but the TDI 8 benefit has not been raised since 1989. 9 It's embarrassingly low when you compare it 10 to our -- other TDI states, which have caps of 1104 11 in California, 604 in New Jersey, and 770 in 12 Rhode Island. 13 The bill will apply to all private-sector 14 employees, and it contains an opt-in provision for 15 public employees through their unions. 16 It's subject to a one-week waiting period, 17 which I just want to say, in terms of looking at it 18 in other states and costing this out, is a real 19 cost-savings to the program. 20 And it will be financed -- the "family care" 21 part of it will be financed solely by employee 22 deductions, and deductions from employees' pay. 23 The raise in the TDI level would continue to 24 be a joint payment. 25 And there's job protection in our bill. 1 There's another bill that has been introduced 2 also, as 3301, and that would also provide paid 3 family leave to New York families. 4 There are some differences, which we can talk 5 about. 6 We commend the sponsors of that bill -- thank 7 you -- for recognizing the importance of this issue. 8 We really think that has shone a light on it 9 and raised the profile, and it's really appreciated. 10 I want to concentrate on one aspect, though, 11 of the laws, and an attorney who's helped to draft a 12 lot of these; and that is, that it is crucial to the 13 success of any paid-family-leave law that it covers 14 everybody; that all employees and employers have 15 access to the program. 16 Because there's no cost to business in any of 17 the proposals before you, there's no real reason to 18 say, oh, well, the small business can't really 19 afford it. 20 They're not paying for it. 21 So it's unfair to workers. As Nancy 22 testified, 2 million workers would be left out. 23 And -- but it also makes it unworkable, 24 particularly if you're using the TDI system, because 25 workers change jobs, and you could have spent your 1 entire career paying in as part -- as working for a 2 larger business, and then change jobs to a smaller 3 business and you're no longer covered. 4 And that's just not any way to run an 5 insurance program. 6 But more importantly, and I really want to 7 focus on this, a carve-out is really unfair to small 8 business. 9 Small businesses are among the most important 10 beneficiaries of a program like this. 11 They can't afford -- they really can't afford 12 to pay for 12 works, or even 6 weeks, of leave for 13 their employees. 14 And we've seen this in New York City when we 15 were working on sick time, and we heard this a lot 16 from small employers, saying, "Our workers are like 17 our family, and we really do" -- that is often the 18 case. 19 But, you know, they -- so employers would 20 like to see "their family," their employees, have 21 some kind of wage support when they have to take 22 time off, which they will take the time anyway after 23 they have a child or a really seriously ill family 24 member. 25 Employers can give them the time, but they 1 can't afford to give them the money. 2 And, I just wanted to say we recently spoke 3 to the owner of a small business -- a lithograph 4 business in Chelsea, in New York City, who got on 5 the phone -- we have a clinic, so we hear from a lot 6 of people who are very upset about the fact that we 7 don't have paid family leave in the state. 8 Anyway, the employer got on the phone, after 9 his employee called to us find out if there were any 10 benefits she could get after she had her baby, and 11 he was as upset as she was that there was none. 12 And he said how wonderful it would be if 13 there was a program that would enable her to have 14 money that she needed, where he wouldn't have to 15 pay. 16 Why would we cut small-business owners out of 17 the ability to offer their workers this benefit? 18 It really means that small businesses who 19 will be competing for staff will be at a tremendous 20 disadvantage with larger businesses who can offer 21 paid family leave. 22 And, believe me, women of child-bearing years 23 are going to make decisions about their employment, 24 at least as one factor. 25 So leaving small businesses out is really 1 going to hurt them. 2 And as somebody who runs a small business, in 3 the sense of a small non-profit, we have 4 10 employees, it's part of our mission to work -- 5 family is part of our mission, and so we do pay for 6 paid family leave, but it really is difficult. 7 And I would be very upset, really upset, if 8 my workers -- if this program was passed and we 9 couldn't take advantage of it and I would have to 10 continue to pay this out of my grants, et cetera. 11 So, I really hope that you will think about 12 that when you think about any kind of carve-out. 13 There should not be one. 14 And, there's no precedent for it. It's not 15 in the TDI program. There's no carve-out in the 16 TDI program. And there is no carve-out in any of 17 the bills that have been passed around the country. 18 There are not. 19 So, yeah, I really hope that you will 20 consider that. 21 So, in closing, I just want to say: 22 We do run a clinic for workers who have 23 problems due to their caregiving responsibilities, 24 and we get so many calls from workers asking us 25 about paid family leave here in New York, who are 1 upset to learn that there's no income support for 2 them. 3 And many workers call, who live in New Jersey 4 and work in New York, and they're particularly upset 5 because they've hear their state has the program, 6 but they can't take advantage of it because they 7 work here. 8 We also have a petition to the Governor, 9 which has over 12,000 signatures, with amazing 10 comments about how important this program is, or 11 would be. 12 And, so, I really thank you so much for 13 allowing to us testify, and for hearing about this 14 issue. 15 We're hoping that New Yorkers won't to have 16 wait any longer. 17 And, we really appreciate your attention to 18 this. 19 Thank you. 20 SENATOR MARTINS: Thank you for your 21 testimony this morning. 22 This whole issue is gender-neutral. 23 I know it's gender-neutral. We say it's 24 gender-neutral. 25 But the reality is, that the vast majority of 1 times, when there's a caregiver who's going to have 2 to step in to care for a loved one, it's going to be 3 a woman. It's going to be a wife, a mother, that is 4 being asked to take on that responsibility. 5 And, you know, certainly, given the fact that 6 we have TDI in place, it gives us certain options 7 that perhaps some of the other states that you're 8 working with just don't have; and, so, we are able 9 to look at it a little bit more holistically. 10 I know you went over the two bills that we 11 discussed and that are currently pending, but I want 12 to ask you to take a step back away from the 13 two bills and give us a sense of where you think we 14 can create a sustainable model. 15 Obviously, either bill would probably do 16 that, but if you had a blank slate and you were 17 working on this issue, understanding what the 18 different currents are, how would you suggest that 19 we look to setting up a paid-family-leave component 20 to TDI in New York? 21 How would it be paid? 22 Where do we set the thresholds? 23 Yes, we have FMLA, the 50-employee threshold. 24 How do we setup guaranteed jobs as opposed to 25 non-guaranteed jobs? 1 What do you think we should do? 2 SHERRY LEIWANT: Well, again, you have to 3 cover everybody. 4 I really think that that's almost 5 non-negotiable. I mean, it just won't work 6 otherwise in terms of the pay. 7 I think there is a difference between the 8 payout and the job protection. I think they can be 9 separated. 10 We would like to see job protection for 11 everybody because, if you've paid in for a benefit, 12 you shouldn't have to risk your job to take the 13 benefit. 14 But I do understand that there could be a 15 conversation about that. 16 I don't think there can be a conversation 17 about whether people are covered in terms of the 18 insurance itself. 19 So that's what I would say about that. 20 I think, you know -- we think, I mean, 21 obviously, we have proposed this, and we've seen it 22 work in California, New Jersey, and, just beginning 23 in Rhode Island, but, so far, so good, that, you 24 know, using the existing TDI program, having 25 employees pay for the family-care part, and is 1 sustainable, and is definitely affordable. 2 We have a cap of 45 cents a week for -- and 3 we've looked at this time and time again, the Fiscal 4 Policy Institute has looked at it. That will 5 finance this in the first year. 6 And if it needs to be raised, the insurance 7 commissioner can raise that, that contribution. 8 And the estimate is that, as you've heard 9 before, wouldn't go over 80 cents. 10 SENATOR MARTINS: Yeah, I've got the tell 11 you, I'm not a big fan of, in this instance, when 12 we're dealing with insurance and sustainability, of 13 capping anything, frankly. 14 I think we have to be more concerned with 15 ensuring that whatever is actually being considered 16 is something that is sustainable, and is sustainable 17 on its own, that is not subject to pressures in the 18 economy, because if you're going to make the 19 commitment to an entire workforce that they have 20 this insurance available, you don't get to take that 21 back. 22 SHERRY LEIWANT: Right, I agree with you. 23 SENATOR MARTINS: So artificially imposed 24 limits for the sake of creating optics, I think, are 25 dangerous. 1 SHERRY LEIWANT: Can I just -- just let me -- 2 the bill that passed the Assembly, and the bill 3 that's been proposed here in the Senate, is -- 4 there's only a cap in the first year. 5 It's just the first year. 6 After that, it's unlimited. 7 We were just estimating how much it would 8 probably be, but the insurance commissioner would be 9 the decider on that, and there is no limit after the 10 first year. 11 SENATOR MARTINS: I understand. 12 And if we look at California, as, again, just 13 because they've been doing it for longer that anyone 14 else, they have a workforce of about 12 million 15 people that are paying into this system. 16 They have another 3 million that don't 17 qualify for their TDI so they don't pay into the 18 system. 19 So out of 12 million, I think, if I remember 20 the statistics correctly, they have about 240,000 or 21 so, on average, applicants who take paid family 22 leave per year. The vast majority of those are for 23 bonding with newborns. 24 But, 240,000, as against 12 million, and 25 they're not all -- there isn't this mad rush of 1 people to take this. 2 You take it in the event of an emergency. 3 You're taking a pay hit. 4 You're taking a pay cut. 5 Obviously, to the point that was also made 6 earlier, this is an opportunity for people to get 7 something, but more often than not, it's not enough 8 to sustain them. It's enough to give them some help 9 along the way. 10 And, so, you know, if we're going to sustain 11 it, California has a large contribution by 12 employees. 13 There's a commitment there, that they're 14 paying 1 percent of their salary, up to $104,000, 15 for this. 16 And they have demonstrated it to be 17 sustainable, even on the numbers that I'm 18 discussing, where you only have, you know, 2 percent 19 of those contributing actually using it annually. 20 And so, again, if we're going to have this 21 discussion, and since we're having this discussion, 22 and since I think there is, you know, some real 23 interest in finding a way to get us to that point, 24 I think we also have to discuss it in terms of 25 realistic numbers, and what we can realistically 1 tell our workforce is going to be their buy-in for 2 this type of insurance. 3 They still want the benefit, but they have to 4 understand what that buy-in is going to be as well. 5 To the point about, you know, 6 disproportionately affecting people in the 7 workforce, obviously, I said it before, I believe 8 very strongly this is an issue that is, far and 9 away, you know, disproportionately affects, 10 obviously, our women in the workforce, and it's 11 something that we have to work on, societally, to 12 deal with. 13 We have the ability through TDI to do 14 something, and, you know, we're evaluating it now. 15 Where should we put that threshold, as far as 16 the amount of benefit that they're entitled to? 17 California is up over $1,000. 18 New Jersey and Rhode Island are significantly 19 less. 20 What is the number and the threshold that we 21 in New York should be looking to achieve, balancing, 22 obviously, the contribution rate that we're 23 expecting from employees, as against that weekly 24 benefit that they'll be receiving? 25 Where do you think that should be? 1 SHERRY LEIWANT: Well, I mean, I'll let Nancy 2 answer it, because she's the "numbers" person, but 3 I do feel like we've thought that through, and 4 that's why, you know, we're not going up to 1,000, 5 we're not even in four years, because it would be 6 more expensive, I think, than we would like to see 7 it be. 8 SENATOR MARTINS: But that's exactly it. 9 SHERRY LEIWANT: But, you know, there are 10 moving parts, and so we've formulated, you know, 11 each year it will go up, but it goes up gradually. 12 And, ultimately, in four years is, what, 13 six -- what's the -- yeah, go ahead. 14 NANCY RANKIN: Well, you know, we were 15 suggesting, and I think it's true in both bills, is 16 that we want to move -- I mean, we want to move the 17 cap, which is the maximum, to be half the statewide 18 average weekly wage. 19 The average weekly wage in New York in 2013 20 was $1212, so the cap would be $606. 21 But what we were saying is, for those 22 low-wage workers that are earning below that, we 23 would give them a benefit of two-thirds of their 24 average weekly wage, up to the cap. 25 So that means when you reach the equivalent 1 of earning about $47,000 a year, you would bump up 2 against the cap. 3 So instead of getting two-thirds of your own 4 average weekly wage, you would then hit the cap and 5 then you would get $606. 6 So we think that, that way, we're balancing 7 the need to have a livable benefit for the 8 lowest-wage workers. 9 47,000 is about twice the federal poverty 10 level for a family of 4, so, for them, you know, 11 where half their weekly wage would really not be 12 enough to survive on, they're getting two-thirds. 13 But, then, you hit up against the cap of 14 50 percent of the statewide average weekly wage, 15 which would grow up gradually in time. 16 And we're not even having the cap, you know, 17 we're not -- because it's taking us so long to raise 18 TDI, the current cap of 170, we're not suggesting we 19 make that leap in one year. We're suggesting that 20 we gradually phase it in. 21 SENATOR MARTINS: That's interesting. 22 You know, one of the statistics that jumped 23 out at me, in looking again at the California model, 24 is that, out of those who are using it and applied 25 for this benefit annually, upwards of 70 percent of 1 those are people who are affluent. 2 Upwards of 70 percent. 3 Meaning, to me, that those who are in the 4 lower income brackets simply don't have the ability 5 to take the financial hit for caring for someone and 6 taking time off, because they can't take the lower 7 wage. 8 So, it's interesting that you would suggest 9 increasing it on the lower -- for lower-wage 10 earners; thereby, giving them some more flexibility, 11 the theory being, that those who are higher-wage 12 earners certainly have the ability to cushion that 13 impact and they can take the lower wage, but they 14 have, I guess, a larger safety blanket. 15 So, it's an interesting concept -- 16 SHERRY LEIWANT: Yeah, they have a little 17 savings. 18 And so that our wage-replacement rate would 19 be, for lower-income people, a little higher, 20 actually, than California. 21 But I would say another really important 22 issue that explains some of what you're seeing in 23 California, is that there's been fairly limited 24 outreach. 25 And that if we do this, it's really important 1 to have robust outreach to let workers know about 2 their -- that they're paying for this and that they 3 have this benefit, because people just may not 4 realize it. 5 I mean, I can speak to my own case. 6 When I had my first child, which was, like, 7 over 30 years ago, I worked for a place, and when 8 I -- I worked up until the day I delivered. And 9 I actually left my job. 10 Nobody told me, Nancy, you're entitled to get 11 this, you know, 170, which was a little more then. 12 And then in, you know, six months, they 13 rehired me. You know, the same company rehired me 14 back, and I never even got my TDI benefit. 15 So, I think we have an obligation to do 16 outreach to inform people. 17 NANCY RANKIN: And I just would add that that 18 is in the bill -- 19 SENATOR MARTINS: Of course. 20 NANCY RANKIN: -- that passed the Assembly, 21 that we do have an outreach and education. 22 And that it's also important to keep it 23 going, because they had it in California in the 24 first year, and then there was a real fall off in 25 people not knowing about it after that. 1 SENATOR MARTINS: I hate to keep referring to 2 California, but, I guess they're the model. 3 We do have a few questions from our members 4 here. 5 We'll start with Senator Sanders. 6 SENATOR SANDERS: Thank you, Mr. Chair. 7 Good to see both of you. 8 NANCY RANKIN: Good to see you, too, Senator. 9 SENATOR SANDERS: Good to see, you 10 Vice President Rankin. 11 We did this in New York City. 12 How long ago was that? 13 NANCY RANKIN: Well, in 2013, and we expanded 14 it in 2014. 15 SENATOR SANDERS: Has New York City gone 16 bankrupt since? 17 NANCY RANKIN: No. 18 New York has had record economic growth, 19 record job, since. 20 SENATOR SANDERS: So that means we can take 21 some small part of that, some claim of that. 22 I think that there are many, many good 23 reasons why we should have a -- this legislation, 24 but among them that we're not really pressing is the 25 gender gap that's going on, where we're not looking 1 at that it's women, by and large, who are thrust 2 into the position of being the family caregiver, and 3 they are taking time out from their own careers. 4 They're losing skills, they're losing 5 experience, they're losing all of the things that 6 people are evaluated on for promotion; and, 7 therefore, are not getting the promotions. 8 And this is leading to a greater societal 9 problem, of course, which we call the "gender gap," 10 this gap that keeps growing. 11 And that we, in a small way, can do something 12 about it, right here. 13 Of course, a happier employee should be more 14 productive in the workforce. 15 I am looking forward, of course, to hearing 16 from the business community, which is coming up 17 shortly thereafter. 18 One of my hats that I wore at New York City 19 also, was chair of economic development, so I was 20 very, very interested in how they did. 21 And I believe that we found a balance that 22 made it possible. 23 And I believe that these bills that we're 24 looking at make it possible also. 25 I, of course, will favor a 12 week, and 1 including all employees, but, let the conversation 2 continue. 3 Thank you, Mr. Chair. 4 Good see you. 5 SENATOR MARTINS: Thank you very much. 6 Senator Squadron. 7 SENATOR SQUADRON: Thank you very much. 8 I just want to talk about this exemption -- 9 the potential of an exemption, based on the number 10 of employees, because that's something that we do 11 see in different settings, somewhere. 12 Can you just explain sort of a scenario where 13 an exemption for a small employer might be 14 appropriate, and why that wouldn't apply here? 15 You touched on that point, but I just think 16 it's a really important one that, you know, is 17 easily missed. 18 This is not an employer benefit. 19 This is an insurance program, on the 20 paid-family-leave side, entirely funded by 21 employees; on the TDI side, and jointly. 22 So what is something where you could kind of 23 imagine a small employee -- a small employer having 24 an argument to be exempt, a different kind of 25 benefit? 1 SHERRY LEIWANT: I honestly can't, because 2 I think that -- 3 SENATOR SQUADRON: So there's no other sorts 4 of benefits at all? 5 SHERRY LEIWANT: I think -- you know -- 6 SENATOR SQUADRON: In paid-sick, even in 7 New York city, for example. 8 SHERRY LEIWANT: Oh, other kinds of. 9 Yeah, we have -- you know, we have a small 10 exemption for under five in New York City, and it -- 11 SENATOR SQUADRON: And what was their 12 argument for that? 13 Whether you agree with it or not, what was 14 the argument? 15 SHERRY LEIWANT: That they were paying for it 16 out of their pockets. 17 And so the idea was, that the smallest 18 businesses are really going to have trouble doing 19 that. 20 That it's -- you know, I mean, and it -- you 21 know, it has a certain, "we don't like them." 22 But, you know, I've been also writing 23 paid-sick-days bills around the country, and, 24 mostly, there are these small exemptions for 25 small -- the smallest businesses because, they say, 1 We're are not going be able to afford it. 2 But that isn't the case here. 3 SENATOR SQUADRON: So I just want to be make 4 sure that we all fully understand that distinction. 5 So in the scenario of a paid-sick benefit, 6 that's something that the employer is funding. 7 That is a day where the employee is not 8 working? 9 SHERRY LEIWANT: Yes. 10 SENATOR SQUADRON: And is receiving their 11 salary? 12 SHERRY LEIWANT: That's correct. 13 SENATOR SQUADRON: Which is something the 14 employer has to pay for? 15 SHERRY LEIWANT: That's correct. 16 SENATOR SQUADRON: We both happen to be 17 supporters of that policy, not everyone is, but 18 that's what that policy is. 19 This policy is not something the employer is 20 paying for? 21 SHERRY LEIWANT: That's correct. 22 Not at all. 23 SENATOR SQUADRON: It is being funded -- and, 24 so, in a scenario where you have a carve-out for 25 employers of certain sizes, for people who work at 1 companies of less than a certain size, you could 2 easily have a scenario, where someone has not paid 3 into this system at all -- 4 SHERRY LEIWANT: Right. 5 SENATOR SQUADRON: -- goes to an employer of 6 over 25 -- 7 SHERRY LEIWANT: Right, exactly. 8 SENATOR SQUADRON: -- has a qualifying life 9 event, and then gets the paid family leave, having 10 not paid in it. 11 SHERRY LEIWANT: Correct. 12 SENATOR SQUADRON: Or, alternatively, you 13 actually create a disincentive for people to go work 14 for a startup, to go participate in the 15 entrepreneurial economy -- 16 SHERRY LEIWANT: Yes, especially -- 17 SENATOR SQUADRON: -- because they've been 18 paying in for years and years with the larger 19 employer, they go to a smaller employer, and, that 20 contribution doesn't work. 21 It would be like having social security only 22 be available if you retired from employees of 23 certain sizes. 24 I think it's a really important distinction. 25 I think there's a policy conversation to be 1 had over small businesses and larger businesses. 2 I actually sponsored a piece of legislation 3 that -- I sponsor, currently, a piece of legislation 4 that would increase the minimum wage more quickly 5 and more dramatically at larger businesses than at 6 smaller businesses. 7 National chains, based on their revenue size, 8 we would get to a $15 minimum wage more quickly for 9 those large employers than for smaller ones. 10 So, there is a real issue here for small 11 businesses that I think we do need to acknowledge in 12 a state like New York, and in a city like the one 13 that I come from, New York City, where we really 14 want small employers to be able to thrive. 15 They are such an important part of the 16 economy. They are often working much closer to the 17 razor's edge than the larger or the national 18 businesses. 19 This conversation has nothing to do with 20 that, though, and I think that's very important. 21 This is an employee contribution, 22 employee-funded insurance program. 23 Or in the case of TDI, a 65-year-old program, 24 with very low costs, with shared contributions from 25 the employer and the employee, just like 1 social security, just like unemployment insurance, 2 unlike a benefit like paid sick leave. 3 SHERRY LEIWANT: Precisely. 4 And I would say, again, that carving out the 5 small businesses will be a detriment to them. 6 It's really telling them, okay, you know, 7 there's a benefit out here that you're not paying 8 for and that the bigger guys aren't paying for, and 9 the State is running, but your employees can't 10 access it. 11 SENATOR SQUADRON: And, of course, a big 12 cost, especially for small employers, is turnover. 13 SHERRY LEIWANT: Right. 14 SENATOR SQUADRON: And even if they can, as 15 you say, if they really do see their employees as 16 family themselves, and they can afford to give them 17 the time off, which they're going to take anyway -- 18 SHERRY LEIWANT: Right. 19 SENATOR SQUADRON: -- they're going to take 20 the time off when you have a child. 21 SHERRY LEIWANT: Exactly. 22 SENATOR SQUADRON: You're going to take time 23 off when you have a parent at end stage of their 24 life. 25 They're going to take the time off, but they 1 can't make it affordable for them. 2 Under this proposal they wouldn't be required 3 to. 4 The system would, through employee 5 contributions. 6 SHERRY LEIWANT: Right. 7 SENATOR SQUADRON: I just think that's such 8 an important distinction for those of us who are 9 conscious of the burdens that get put on especially 10 small employers. 11 This just isn't one of those categories, 12 unlike, for example, my minimum-wage proposal. 13 Thank you. 14 SHERRY LEIWANT: Thank you. 15 NANCY RANKIN: If I could just add a point, 16 Senator Squadron, in that, we also have empirical 17 evidence, because we have the evidence from 18 California, New Jersey, and to a limited extent, in 19 Rhode Island which is newer. 20 But, in New Jersey, and certainly in 21 California, they looked specifically at small 22 business, and they found that, in fact, it was not a 23 burden on small business. 24 So we have that experience to look at. 25 And then we also have, as a practical matter, 1 that business size fluctuates, you know, so that you 2 might have thought you were working for a larger 3 business, but, then, three people leave. 4 Does it change into a smaller business and 5 you don't get your benefit after all? 6 So I think, for practical reasons, as well as 7 because we just have the empirical evidence and 8 experience in states, like California, that show 9 that we may have feared it would have been a burden 10 on small business; but, in fact, it turned out not 11 to be. 12 SENATOR MARTINS: Senator Savino. 13 SENATOR SQUADRON: Thank you. 14 I do have one question. 15 Because this has been, you know, an issue 16 that we've struggled with over, I don't know, the 17 10 years we've been trying to develop what 18 New York's paid-family-leave programs should be, do 19 we match the federal program or not? 20 Do you recall, what was the thinking behind 21 the FMLA that said "employers of 50 or more"? 22 How did they decide that that 12 weeks of 23 unpaid leave only applied to large employers? 24 Does anybody recall what the thinking behind 25 that was? 1 SHERRY LEIWANT: Well, I think it was some of 2 the things that Senator Squadron was saying, that, 3 you know, that that's going to be a burden on small 4 business, that they have to keep their job open. 5 If there's only five people in the business 6 and you have to keep the job open, that's more of a 7 burden on a very small business than on a larger 8 business. 9 And that's -- we're not talking about 10 insurance, we're not talking about (unintelligible). 11 So I think that was -- and then there was the 12 idea -- there really was the idea, because I do 13 remember, that it would be revisited, and that you 14 would be able to bring that threshold down. And it 15 just never happened. 16 SENATOR SAVINO: And it never happened. 17 All right, thank you. 18 SENATOR MARTINS: Thank you. 19 Senator Kennedy. 20 SENATOR KENNEDY: Thank you, Chairman. 21 And, thank you, Nancy and Sherry, for your 22 testimony here today. 23 It certainly is captivating to hear these 24 personal stories as well. 25 And one of the titles of your testimony, as 1 I read, was, "An Issue Whose Time Has Come: Paid 2 Family Leave." 3 I couldn't agree more. 4 It's certainly time New York State step up 5 and be a leader in the nation and set a precedent. 6 I would like to switch gears, if I could, to 7 another issue that has a direct impact on working 8 families across our state, and that's the issue of 9 child-care subsidies. 10 In Western New York, we're experiencing a 11 rebirth, in large part, to New York State's 12 investment in our community; a lot of public-sector 13 dollars that are leveraging private-sector 14 development. 15 But, unfortunately, there's many working 16 parents that aren't able to participate in this 17 renewed economy because of the staggering costs of 18 child care. 19 And, currently, there's child-care subsidies 20 provided in Erie County, which is out in 21 Western New York, Buffalo, where I reside. 22 And in Erie County, and many other counties 23 in New York State, the child-care subsidy is at 24 200 percent of the federal poverty level, those 25 families would qualify. 1 But, there are counties in the state -- 2 Oneida County, the Capital Region, Monroe County -- 3 where that qualification number, the threshold, is 4 actually at 275 percent of the federal poverty 5 level. And the child-care assistance is actually 6 issued through the Workforce Development Institute's 7 child-care enrollment program. 8 And, we're fighting right now, collectively, 9 to get more funding in the budget, to change this 10 disparity, to create an even playing field, for 11 working families across the state, whether it's 12 Erie County or New York City or anywhere in between. 13 And I can tell you, personally, in 14 Erie County, there would be an added 300 children 15 that would qualify if we were able to get this 16 improved subsidy. 17 And, so, I just wanted to ask you about 18 child-care subsidies; the importance of child care, 19 and the ability for families, working families, 20 especially single mothers, and the ability to get an 21 appropriate child-care program, to allow them to 22 enter the workforce and to become a member of the 23 workforce again, as has been articulated by some of 24 my colleagues, and yourself in some of your 25 testimony. 1 Unfortunately, there are families that have 2 to forgo opportunities for advancement in the 3 workforce because of the lack of paid family leave. 4 But I would submit, that child-care subsidies 5 offer that same problem. 6 And so I wanted to hear what your thoughts 7 were on that situation as well. 8 SHERRY LEIWANT: Yeah, I mean, certainly, 9 I think it's a continuum. 10 I think one of the reasons that we -- one of 11 the reasons -- one of the many reasons that we 12 support paid family leave is that, for a very small 13 child, it's going be very difficult to find infant 14 care. 15 Especially, there's some very good laws that 16 protect, you know, ratios, et cetera, for very small 17 children, but, it becomes very expensive. 18 So I think that is another reason to support 19 paid family leave, is for the -- but, certainly, 20 after parents go back to work, things have not 21 stopped. 22 If they want to be working, then there has to 23 be child care. 24 And, you know, we certainly are supportive of 25 efforts to make it so that everyone can afford 1 quality child care in this state. 2 It's essential, I totally agree with that. 3 And it should be -- certainly, it should be 4 fairly distributed in terms of subsidy. 5 SENATOR KENNEDY: Thank you. 6 SENATOR MARTINS: Thank you, Senator. 7 Just following up on the point that 8 Senator Squadron was just making a few moments ago, 9 because I haven't heard a proposal that would carve 10 out small businesses altogether. 11 You know, if we are looking at this as a, 12 predominantly, employee-funded system, the concerns 13 that I have heard is that, you do have small 14 businesses that have key personnel, and sometimes 15 the flexibility that they have to not have somebody 16 there for a prolonged period of time is significant, 17 and so it creates certain pressures. 18 What I have heard is creating a threshold, 19 similar to FMLA, but slightly different, as they do 20 in other states, as to which jobs will be guaranteed 21 in the event that a person chooses to leave on paid 22 family leave. 23 If they do, you know, the threshold typically 24 is, and please correct me if I'm wrong, that, above 25 that threshold; in this case, 50 employees or more, 1 that you would have protections that your job would 2 be guaranteed, or a similar-type position or 3 comparable position with would be guaranteed. 4 But if you have 50 -- or fewer than 5 50 employees, that the small business would not have 6 to guarantee that job; again, specifically, for 7 those small businesses where they don't have the 8 flexibility, perhaps, of not having somebody there. 9 And, whereas we would expect that they would 10 keep that job and position open for their employee 11 when they got back, there wouldn't be a requirement 12 that a two-, three-, four-, five-, or so-person 13 small business would have to keep that position 14 open, because they may not have the flexibility of 15 covering that position. They may have to bring 16 somebody on. 17 And, so, it allows flexibility for the small 18 business, understanding that there are different 19 pressures when you're dealing with the smaller 20 businesses as opposed to the larger businesses. 21 Would you support such a provision in a 22 discussion for paid family leave in New York? 23 SHERRY LEIWANT: I mean, I think that's a 24 conversation, but I do -- I think, on our side of 25 it, I would say that, you know, if people are paying 1 into this insurance benefit, and the only way they 2 can take it is to risk their jobs, that's not really 3 on -- on the worker's side, that's not really fair. 4 So -- but, that said, you know, there are 5 differences in terms of job protection in the 6 different states. 7 SENATOR MARTINS: But a slightly different 8 point then was made by Senator Squadron, because he 9 was saying, if you're paying into it, you should 10 have the benefit of having paid into it; that is, 11 you would get the 6 weeks, or 12 weeks, whatever 12 that term would be, and the payments during that 13 period. 14 I don't think anybody is questioning that. 15 The question is: For a small business, 16 obviously, balancing the issue, and trying to create 17 the consensus around a program, and looking at what 18 they have done in other states, that has been 19 included as well, as a difference, that allows for 20 addressing some of the concerns that have been 21 raised by small businesses, when it comes to, 22 especially those smaller businesses, where that kind 23 of flexibility just simply doesn't exist. 24 SHERRY LEIWANT: Yeah, again, you know, 25 I think that's a conversation. 1 I mean, I think what we were talking about 2 with Senator Squadron was the money. 3 And that's -- you have to give everybody -- 4 everyone has to have that access to that benefit, 5 I think, the money. 6 But, in terms of job protection, I think 7 that's another conversation. 8 We would like to see that come down from 50, 9 because it just -- as I say, if you have a benefit 10 that you're taking advantage of, you shouldn't have 11 to be fired to use it. 12 There are a number of states that have come 13 down from 50, to 25. Even without paid leave, they 14 just have done it, and do job protection on a lower 15 threshold, in a state law. 16 That's -- I think 10 states have done that. 17 So we would like to see the threshold come 18 down for job protection. 19 And the Addabbo -- Senator Addabbo's bill, 20 like the Assembly bill, would protect everybody. 21 But as I say, I think that -- you know, 22 that's a conversation that could be had, about that 23 threshold. 24 SENATOR MARTINS: All right. 25 Thank you, both. 1 I appreciate your testimony here this 2 afternoon. 3 Thank you. 4 SHERRY LEIWANT: Thank you. 5 NANCY RANKIN: Thank you. 6 SHERRY LEIWANT: Senator Savino, did you 7 have -- I'm sorry. You had asked Donna a question, 8 and I -- did you want to -- did you want me to 9 answer it? 10 Because I don't remember what it was. 11 I apologize. 12 SENATOR SAVINO: E-mail me. 13 NANCY RANKIN: Okay. 14 SENATOR SAVINO: E-mail me (inaudible). 15 NANCY RANKIN: Okay. Thank you very much. 16 SENATOR SAVINO: Thank you. 17 SENATOR MARTINS: Our next witness testifying 18 this morning -- this afternoon, is Ken Pokalsky, who 19 is the vice president of government affairs with 20 The Business Council. 21 KENNETH POKALSKY: Yes, good afternoon. 22 SENATOR MARTINS: And accompanied by 23 Tom Minnick as well. 24 Good afternoon. 25 KENNETH POKALSKY: I'm joined here by 1 Tom Minnick. 2 I'm vice president of government affairs for 3 The Business Council. Tom Minnick is our labor HR 4 expert. 5 One of the things that we do is provide 6 HR compliance guidance to employers, and Tom speaks 7 with employers, large and small, every day of the 8 week. 9 So I'm going to talk a little bit about our 10 concerns about legislation, and Tom will give you 11 some -- relay to you some of the concerns he hears 12 from practitioners on the challenges of dealing 13 with a paid-family-leave law, as proposed in 14 New York State. 15 Before I start, I've heard a lot of things 16 already this morning, some of which I think is -- 17 some of which is irrelevant, or, perhaps, even 18 disingenuous. 19 But, we hear that, you know, Canada has a 20 great program. 21 I don't know that losing people to the 22 economic wonderland of Canada is a real challenge 23 for New York or the U.S. And at the moment, after 24 having a decent UI rate, Canada is now about one 25 full point above the U.S., which Canada's economy 1 isn't that -- isn't performing as well as the U.S. 2 right now. 3 I heard a number of references to California. 4 And I'm sure that, as you follow other 5 states, California is facing all kinds of 6 challenges. 7 Their budget's a mess. 8 Their municipal finances are a mess. 9 And right now, their unemployment rate is the 10 fourth highest of any state in the country, almost 11 7 percent. 12 And I'm sure it didn't happen because of paid 13 family leave, but, certainly, I think, you know, we 14 heard the suggestion that it's somehow indicative 15 that their economy is fine and paid leave had 16 nothing to do with it. 17 We also heard mentioned a couple of times 18 that New York City is the strongest regional economy 19 in New York State. 20 It was before the city council passed paid 21 leave, it is now. And I think it's, quite frankly, 22 a strong economy despite some of its policy choices. 23 But even in -- if you look at New York City's 24 recent economic performance, it's a bit of a veneer. 25 It's had a very strong job-growth percentage, 1 but if you look at the makeup of the new jobs and 2 jobs being created in New York City, they tend to be 3 in the lower-wage industries, particularly 4 hospitality and leisure. 5 Their highest-paid jobs in the financial 6 services are still well below their pre-recession 7 peak. 8 New York State has struggled with 9 manufacturing jobs. We've lost manufacturing jobs 10 at double the national rate for the better part of 11 two generations. 12 New York City's manufacturing workforce has 13 fallen double the state rate. 14 So, yes, New York City is showing good job 15 growth, but the makeup of that job recovery in 16 New York City is not as strong as I think all of us 17 would like it to be. 18 So, again, these are, you know, comparisons 19 to what other regional economies are doing, and 20 somehow that's suggestive of the effects, or lack of 21 effect, of a paid leave law, I think, are 22 misleading. 23 And the one thing we heard this morning that 24 I thought was the most interesting, and perhaps 25 troubling, was response -- or, an answer that the 1 first witness today, that seemed to suggest that 2 costs don't matter. That employers don't go out of 3 business because of some particular mandate. 4 I think we can all think about, you know, 5 large scale, largely, unionized employers, who 6 were -- had large operations in New York State, you 7 know, 20 years ago, that are no longer here. 8 And if you look at -- and it's always hard to 9 say, "This is what caused it." 10 And, you know, our frustration in dealing 11 with legislative proposals is: 12 Mandates on employer-provided health care 13 doesn't matter; 14 And, a billion dollars in new assessments on 15 energy costs don't matter; 16 And, significant increases in workers' comp 17 costs don't -- all of these things, taken 18 individually, never matter. 19 But we can't look at New York State's 20 economic performance, particularly that upstate 21 performance, and say, none of this matters. 22 Of course it matters. 23 So, you really have to look at, whether it's 24 paid leave, or minimum wage, or any other, you know, 25 employer-cost mandate that's being talked about 1 before the Legislature, and put it in that context. 2 And, I'm not going read my testimony, but one 3 of the things we talk about is, again, 4 New York State, if you look at over the last 5 10 years, or, since the beginning of the 2009 6 recession, New York State has outperformed the 7 nation in terms of recovery. 8 Virtually all of that growth is in 9 New York City. 10 Right now, 27 out of the 50 counties -- I'll 11 say upstate counties, the counties that are outside 12 the MTA service region, 27 out of the 50 have yet to 13 recover the private-sector jobs lost in the 2009 14 recession; meaning, there are fewer people in 15 private-sector jobs in 27 out of 50 counties today 16 than there was in 2008. 17 So, we have the sense that the state is doing 18 well economically. 19 The economic performance in New York State is 20 very mixed. 21 Much of it is downstate. 22 Four out of the five boroughs are doing quite 23 well. 24 Bronx is struggling. 25 Long Island is doing okay. 1 Even the northern suburbs are not recovering 2 strongly from the recession. 3 And, much of upstate has been flatlined, you 4 know, going back over the last 10 years. 5 So you have to put it in those contexts. 6 The other context I think you need to 7 consider is, I don't think the cost of increased 8 TDI coverage, driven by paid leave, is that 9 significant in and of itself. 10 I would say this: 11 We have talked to actuarials with some of the 12 insurance companies that we work with in 13 providing -- we -- our insurance trust sells 14 TDI coverage to employers. 15 The numbers they've given us are -- in 16 looking at both the Senate and Assembly bill, 17 including the version of Senate bill that has both 18 paid leave and increased non-leave TDI coverage, and 19 they're projecting premium-cost increases of between 20 1.5 and 3.5 times current costs. 21 That's well more than $100 a year, I think 22 one of the testifiers had given the number. 23 And not only that, based on, say, the 24 employee-share cap that's in the Assembly bill -- 25 and, Tom, you can correct me if I'm wrong -- I think 1 when TDI was first adopted all the many years ago, 2 it was seen as a 50/50 split. 3 We're looking at a premium share of about 4 5 to 6-to-1, employer-to-employee. 5 And the last thing I'll say on this point: 6 We appreciate some of the modifications that 7 the Senate has made in their proposal to address 8 impacts on business. 9 The small-business carve-out, the 10 cost-sharing approach, we appreciate that. 11 And we appreciate the position that, today, 12 there's a focus on the paid leave, and perhaps 13 leaving where it is, for now, the TDI benefit. 14 But, I have no -- no expectation that, even 15 if you were successful in having this as a 16 state-funded or a state/employee-funded program, 17 with no TDI increase, that we're not going to be 18 back in this conference room next year talking about 19 increasing the TDI. 20 I think most of the pro-leave witnesses we've 21 heard from today have talked about the need to 22 increase the TDI benefit as well. 23 So you need to put it in these -- in these 24 contexts. 25 I've hit on most of the points. 1 I've just got to quickly take a look at... 2 Oh, the last thing I want to say about the 3 proposal, and, again, we appreciate -- we appreciate 4 some of the amendments that the Senate has made. 5 We know in the version that's in the budget, 6 it talks about covering a portion of the cost, and 7 the costs related to the paid-leave component, 8 initially, with general-fund contribution, and, 9 then, through some unspecified split between general 10 fund and employee benefits. 11 As a practical matter, I mean, TDI is a 12 coverage mandate imposed on employers. 13 Employers are required by law to purchase 14 coverage, either through commercial carrier or 15 through SIF. 16 And, if you use workers' compensation program 17 as a proxy, there's somewhere between four and 18 five hundred thousand entities in New York State 19 required to buy workers' compensation insurance. 20 So, a similar number who are required by law 21 to pay -- to buy TDI coverage as well. 22 I don't know of a practical way to use -- to 23 distribute a general-fund subsidy or cost-sharing to 24 four hundred to five hundred thousand private-sector 25 employers who are paying premium checks to their 1 provider. 2 A far more straightforward approach would be 3 to say, this is -- you know, to allow this to be 4 just directly passed through to employees. 5 I appreciate the effort. 6 I don't know how it works. 7 And, again -- and the last thing I'll say, 8 and then I'm going to turn it over to Tom, I found 9 it interesting that, earlier, I think it was 10 Senator Squadron who raised concerns about a 11 general-fund contribution here, because, future 12 years, economic recession will put, you know, 13 additional hardships on state government. 14 I would love to hear that kind of concern 15 raised about private-sector employers having to bear 16 costs, this, or anything else, during economic 17 recessions as well, because, certainly, we bear it 18 too. 19 This is a -- I always find it interesting 20 that when legislators are very willing to impose 21 costs on the private sector, because they have 22 concerns about those costs borne by the public 23 sector may be difficult to bear in less-bounceable 24 times than perhaps we have today. 25 So those are our -- those are some thoughts 1 that we think the Legislature needs to consider: 2 Look at the overall context. 3 One last point. Because I'm not reading, 4 I got to jump around. 5 There are several major cost components 6 imposed on employers. 7 Workers compensation now is a more expensive 8 program, both, in absolute terms, by far, and in 9 relative terms, than before the 2007 reform package. 10 We now have the fourth-highest average 11 workers' comp premium rates of any state in the 12 nation. About 48 percent above the national 13 average. 14 We just did a significant bump up in our 15 UI taxable wage base, and the average UI taxes, you 16 know, to pick up the cost of borrowing from the 17 federal government. 18 So we do have expenses, costs of employer 19 mandates. 20 Again, this is the context that this needs to 21 be considered. 22 And now I really mean it, last point: 23 Our members -- and Tom will give you the 24 flavor of this -- our members understand that the 25 overall compensation package they offer, including 1 paid leave, whether it's vacation, sick time, 2 et cetera, is important. 3 It's important to getting and retaining the 4 employees you want and need. 5 Our employers have crafted compensation 6 packages that work for them and their employees. 7 National survey data shows that somewhere 8 between 75 and 85 percent of employers provide paid 9 leave today. 10 They provide it in different forms. 11 It could be a combination of sick days, 12 vacation. This is not counting, you know, paid 13 holidays. 14 But they do that within the context of their 15 ability, both financially and staffing, to 16 accommodate it. 17 And, whether it is the Senate bill or the 18 Assembly bill, any new proposals or any new mandates 19 on employers will have to be dealt with by the 20 employers in the context of those overall 21 compensation packages. 22 So, anyway, those are some of the contextual 23 issues that we think is important that the 24 Legislature considers. 25 Tom? 1 THOMAS MINNICK: Good morning. 2 In talking with Business Council members, 3 I'm going to differentiate two groups, because there 4 are some distinct different concerns that these 5 two groups have. 6 The first group is the group that employs 7 50 or more employees and is already subject to the 8 federal Family Medical Leave Act. 9 So, they are already used to 12 weeks of 10 unpaid leave, where they integrate in their current 11 time-off programs, sometimes to get through that 12 full 12 weeks, other times, not, based on their 13 particular programs. 14 And while the categories of absence -- caring 15 for a newborn, newly adopted child, caring for 16 seriously ill family members -- is the same in both 17 the Assembly and Senate bills, and matches up to the 18 federal FMLA, those eligible employees and those 19 family members who could trigger a leave is more 20 expansive than the federal family medical leave. 21 On paper it doesn't look like much, but, 22 these employers are concerned about the additional 23 leave time that will be generated from either of 24 these state-level bills. 25 The second thing are additional costs in 1 two areas: 2 Number one, additional premium increases. 3 We've heard discussion over the years, and 4 we've seen in the bills, that the family-care 5 portion will be picked up by employees or a state 6 subsidy of some kind. 7 We understand that. 8 However, with the increase in the suggested 9 disability maximum increases, as Ken mentioned a 10 moment ago, there are some significant increases in 11 premium, DBL premium, that will result, that they 12 will be responsible for. 13 And, let me add that, this is, of course, on 14 top of the current time-off programs that employers 15 have; which, you know, generally, I guess, all 16 benefits, including time-off programs, is usually a 17 35 to 40 percent above payroll-cost number. 18 So, they're already investing significant -- 19 significantly in time off. This is another cost on 20 top of that. 21 That's one cost. 22 The second cost, is the replacement cost. 23 They are, since they deal with the federal 24 Family Medical Leave Act now, they have gotten used 25 to a certain level of absence, and they've taken 1 means to deal with that. 2 I think we all agree that expanding the 3 definition of "disability" to family care, and, 4 increasing the DBL maximum, will cause additional 5 absences. 6 These additional absences, they are concerned 7 about; and, mainly, certainly for many of the 8 skilled positions that our members would have to 9 replace. 10 This is not going out to a Manpower or a 11 Kelly and getting, for 6 or 12 weeks, a replacement. 12 It really remains in-house, with mandatory overtime, 13 on those current skilled employees that they already 14 have. 15 Not factored in this, at least into the 16 discussions, is, you know, a morale factor that they 17 have to deal with in bearing down on their current 18 employees to pick up the slack, usually at overtime 19 rates. 20 Those are the cause of concerns. 21 Something that has not been mentioned at all, 22 that I talked to my human resource managers and 23 directors about, that's hard to quantify, but I'll 24 say it anyhow, is the management of intermittent 25 leave. 1 Now, most of the folks who testify talk about 2 caring for a newborn child, bonding time, maternity 3 leave, and, on the family-care side, caring for a 4 seriously ill family member, usually a block of 5 time. 6 I know some examples in the testimony, when a 7 family member is near death, that a block of time is 8 certainly needed for the family affairs. 9 But, both the federal Family Medical Leave 10 Act, and I bring it up because that's the original 11 context, but, both of the current bills, the Senate 12 and the Assembly bills, also have this 13 intermittent-leave component. 14 And intermittent leave is very tough to 15 manage today, and these are HR professionals who do 16 this; that's what they do. They do it all the time, 17 every day. 18 And, the extension, and the additional 19 intermittent leave, that would be generated from a 20 state-level mandated program, they are very, very 21 concerned about, because intermittent leave, on the 22 federal level, can go in as increments as small as 23 one hour. 24 Very difficult for employers to manage. 25 And, again, we would see some increase in 1 intermittent-leave requests as a result of the 2 statewide proposals. 3 The -- those are the main concerns with our 4 larger employers. 5 The second group are the employers under 6 50 who are not currently, and have never been part 7 of, the federal family medical leave. 8 Certainly, their concern is -- main concern 9 is, to the extent they are able, they have been 10 working with their employees, for years, on time-off 11 issues, be they maternity-related, child bonding, or 12 family care, within the confines of their current 13 time-off programs, and, their ability to replace 14 employees who are out for extended periods of time. 15 And, naturally, they would prefer to keep 16 doing it in-house, to the extent they are able, and 17 not have a cookie-cutter type of mandate imposed 18 upon them, especially in an area where they really 19 haven't been mandated before. 20 KENNETH POKALSKY: So, those are both the 21 legislative concerns and some of the practical 22 concerns we hear from our members. 23 I'll be happy to take any questions or 24 comments that you have. 25 1 SENATOR MARTINS: Thank you, gentlemen. 2 Senator Sanders, you mentioned you had a 3 question? 4 SENATOR SANDERS: I'll yield to 5 Senator Savino. 6 SENATOR MARTINS: Senator Savino. 7 SENATOR SAVINO: Thank you, Senator Martins. 8 Ken, Tom, I love you guys, I really do, but 9 I feel like "Groundhog's Day" here. 10 I've been having the same conversation with 11 you two guy for almost 10 years on paid family 12 leave, and while some of those conversations have 13 been informative, I don't reject everything that you 14 guys have to say on this issue. I understand the 15 population that you have to represent, and 16 I understand the concerns that they have. 17 But, I'm going to say this, I'm going to tell 18 you the same thing today that I told you when we 19 began this discussion years ago: 20 Those qualifying life events are happening in 21 the lives of employees, whether they are employers 22 of 50 or more, or below 50. They're happening 23 anyway. 24 So the replacement costs that employers have 25 to impose -- or, that are imposed upon them as a 1 result of their qualifying life events are -- they 2 have them anyway. 3 That's not going change whether we have a 4 paid-family-leave program in New York or we don't. 5 People have babies. Their parents get sick. 6 Their children get sick. 7 They take that time off anyway, which 8 triggers overtime, or, a temporary replacement. 9 That will not change. Nothing we do in this 10 bill, whether we adopt it or not, will change for 11 those employers, so that's not a valid argument 12 against a paid-family-leave program. 13 If we adopt the model that is completely paid 14 for by the employee, and pass-through of the 15 additional TDI can still go to the employee, and the 16 employers aren't paying for it, that's not a valid 17 argument against it anyway. 18 The reality is, people get sick, they have 19 qualifying life events, they take time away from 20 work. 21 So, we have to decide, what we should decide 22 is, how do we develop a benefit package that makes 23 sense for employees so that they want to work for 24 somebody? 25 You represent several large employers that 1 provide better benefits, and somehow or other, they 2 manage to do so. 3 The Business Council does. I asked you on 4 the way in the door, "Do you have paid family 5 leave?" and you said, "Yes." 6 We have paid family leave in the government. 7 Many of your members provide a better 8 benefit. 9 So I will ask you: How do they deal with all 10 of these costs that you're concerned about for 11 people that don't have it, and still manage to run 12 in the state of New York? 13 And, I don't need to hear about all the other 14 problems that New York State employers face. 15 We're only trying to figure out, how do we 16 replace a -- how do we create a wage-replacement 17 mechanism that has no cost to employers, but 18 provides a real benefit for employees so they can 19 deal with those qualifying life events that are 20 going to happen to all of us anyway? 21 KENNETH POKALSKY: Well, I don't know that 22 any employer has a "leave" policy, a paid-leave 23 policy, that matches either the Senate, certainly 24 not the Assembly, where you're eligible for 12 weeks 25 of paid leave after one month of service, as 1 I understand how it works, because it's in the 2 context of TDI. 3 Well, how do companies accommodate this? 4 There seems to be dismissing the fact that 5 the majority of employers have paid leave today. 6 They provide paid leave to their employees. 7 It's not the paid leave in the format that's 8 being presented in this legislation. 9 And one of our challenges is, that we've 10 looked nationally, we've looked in the state, 11 I don't know that there's any good data. Most of 12 what's out there is survey data. 13 But there are employers -- most employers 14 have "leave" policies today, and they fashion those 15 "leave" policies to accommodate what their needs are 16 and what they can accommodate. 17 We as an -- we're a small employer, we're 18 under 50. We have a leave policy. It certainly 19 doesn't provide 6 or 12 weeks, but it provides a 20 combination of paid vacation, paid sick, personal 21 days, and, family leave. 22 Employers accommodate those things today, 23 because they fashion their policies based on what 24 their needs, and what they see as needed by their 25 employees. 1 SENATOR SAVINO: So would you say that, if an 2 employer was given the option of maintaining the 3 benefit -- the benefit that they developed on their 4 own, or, shifting all their employees to this 5 paid-family-leave policy, which would prevent -- 6 probably reduce the cost of that benefit that they 7 would have to pay for, and the employee would 8 contribute to it, and actually pay for it, wouldn't 9 that be a better deal for the employer? 10 KENNETH POKALSKY: For the...? 11 SENATOR SAVINO: For the employer. 12 So, right now, I'm covering the -- the 13 Business Council is covering the entire cost of 14 providing a benefit, a combination of, you would use 15 your sick leave, annual leave. 16 You wouldn't have to qualify the sick leave, 17 so it would be, basically, duty-free leave. 18 Whatever the qualifying event is, you could use all 19 of your leave balances for that period of time. 20 Is that what you do at the Business Council? 21 KENNETH POKALSKY: If you're asking me, 22 "Would employers rather just have paid leave as, 23 eliminate all of the current policy on paid leave to 24 do the TDI-based leave"? -- 25 SENATOR SAVINO: Maybe? 1 KENNETH POKALSKY: No, I doubt it. 2 But -- 3 SENATOR SAVINO: Okay. 4 KENNETH POKALSKY: But that's not a realistic 5 proposal, so I don't know how useful it is to 6 answer. 7 SENATOR SAVINO: So -- well, maybe not. 8 KENNETH POKALSKY: The other thing I'll 9 mention -- 10 SENATOR SAVINO: The reason I asked you, Ken, 11 is because you said, most employers already provide 12 that -- the majority of employers provide a benefit 13 equal to what we're discussing today. 14 KENNETH POKALSKY: Right. 15 SENATOR SAVINO: I'm not sure I agree with 16 that. 17 But, if an employer did do that -- 18 KENNETH POKALSKY: No, I said most employers 19 provide paid leave, in one form or another. 20 Most employers -- most employees have the 21 access to some form of leave. 22 I mean, the thought is that there's none out 23 there. 24 You said, How do employers deal with this 25 now? 1 They have paid-leave policies that they 2 fashion based on their -- what they see as necessary 3 to maintain their workforce. 4 The other question that you asked about, you 5 said: Nothing changes because of the presence of a 6 benefit or increased benefit. 7 I think data will show that that's not true. 8 If you look at, and the State had been doing 9 a fair amount of data-mining on its workers' 10 compensation program, and showed that leave is 11 influenced by benefit, and not always -- I don't 12 think everyone would argue that, appropriately so. 13 So it does change the use of leave. No 14 doubt, it does. 15 SENATOR SAVINO: Well, I think that -- 16 KENNETH POKALSKY: We can debate whether it's 17 always appropriate or not, but it does. It 18 certainly does. 19 SENATOR SAVINO: See, but I think that shows 20 it's a fundamental difference in our philosophies, 21 because I've heard over the years from the 22 Business Council, and other, you know, employee 23 representative -- employer representatives, that the 24 concern is, that if you allow employees to have a 25 wage replacement for these qualifying events in 1 their life, they'll actually take the leave. 2 I tend to believe that that's something we 3 should encourage, because you don't want the 4 intermittent absences; because, again, those 5 qualifying events are going to continue to happen in 6 people's lives. 7 Is it better for an employer to have someone 8 come in Monday and Tuesday, and then take off 9 Wednesday and Thursday, and then come back Friday 10 afternoon? 11 Or is it better to let them take that block 12 of time, knowing that they don't have to worry about 13 diminished income, or, drastically diminished 14 income, and deal with that event in their life, and 15 then come back and be a more productive employee? 16 That's where we differ on this issue. 17 I think this provides more stability to 18 employer; certainly, economic stability to 19 employees. 20 We may never come to agreement on this. 21 I do agree, though, that there are some 22 positions that you guys have brought forward over 23 the years, with respect to the issue of intermittent 24 leave, whether that should be covered by this taking 25 a day. 1 "What is a qualifying period of time to 2 trigger paid family leave?" I think that's a 3 discussion that we definitely need to have. 4 And, also, how do we coordinate this benefit 5 with existing benefits that an employer might have, 6 and what triggers one or the other? 7 But, on a philosophical level, the idea that 8 people should take time off to deal with these 9 qualifying events, and not have to suffer 10 financially, is something that I think is a bedrock 11 principle that I believe that we should pursue. 12 Thank you. 13 SENATOR MARTINS: Senator Sanders. 14 SENATOR SANDERS: Thank you. 15 I think that you laid out some very, very 16 worthy points that anyone should -- any worthy 17 person should take into consideration. 18 You will forgive my apparent crowing over 19 New York City, a father's -- just a fatherly thing. 20 I understood it was an oversimplification. 21 I understood that this one thing was not the 22 cause of. 23 And as you pointed out, good arguments can be 24 made that it would have done well either way. 25 If you would just answer two questions for 1 me, mine will be brief; and they are: 2 If we say that we have a carve-out for 3 smaller businesses, and not larger, could this be 4 seen as the government picking and choosing winners? 5 Could this be seen as, we are, in one sense, 6 if a thing is being paid for, regardless, are we 7 not -- do we not have a bias towards the larger 8 corporations than the smaller ones? 9 The second one is over the gender gap, and 10 I'm not sure if -- if you want to weigh in on it. 11 But, we have a seemingly growing gender gap 12 also, and a part of it is caused by women having to 13 come out of the economy to deal with real-world 14 experiences. 15 What do -- what should we do about that 16 portion of this? 17 Doesn't this aid us in dealing with that? 18 And if that is true, wouldn't it be a more 19 effective workforce in the future? 20 We may be taking some steps backwards at a 21 moment, but, if we are allowing women to get more 22 seniority, if they are getting more experience, and 23 staying in the game longer, wouldn't that give us a 24 better-prepared workforce in the long run? 25 So, again, picking and choosing winners, and, 1 the gender-gap argument. 2 KENNETH POKALSKY: On the first, I think 3 that's an easy answer. 4 I think it's the opposite. 5 I mean, many times, you see New York State 6 legislation, whether it gets passed or not, will 7 carve out small business or agriculture or some 8 entity who is being -- getting dispensation from 9 whatever cost or mandate being proposed. 10 We do it all the time. 11 So, if anything, I think it's a tendency to 12 avoid imposing costs on some, you know, target 13 class. 14 On the latter, I've looked at, you know, wage 15 data nationally and at the state level. 16 I don't really think, and I haven't fully 17 thought it through, but I don't really think this 18 legislation would make any significant difference in 19 the wage gap between males and females, in part, 20 because if you look at some of the -- you know, the 21 research done, it isn't temporary leave that's 22 having an effect on, you know, lifetime earnings by 23 women. 24 It's, long-term, people who remove themselves 25 from the workforce for a period of years, primarily 1 in -- you know, during child-bearing years. Not 2 temporary leaves, some of which are protected on the 3 federal Family Leave Act anyway. 4 So I don't think that this would have much of 5 an impact on it. 6 I really don't. 7 SENATOR SANDERS: There -- oh, I guess it is 8 loud. 9 Although I might differ with you, I will turn 10 it back to the Chairs. 11 Thank you very much. 12 SENATOR MARTINS: Thank you, Senator Sanders. 13 Gentlemen, I just wanted to thank you for 14 being here. 15 You know, one of the -- I am loathed to tell 16 anyone on any issue that their point is not valid. 17 I try to find consensus, especially in what 18 we do here, with different points of view. 19 And one of those questions that I will then 20 pose to you, as I posed to others is: Is there a 21 program for paid family leave that you believe, 22 structurally, can be set, so as to address the 23 concerns that you have for businesses and small 24 businesses in New York State; while at the same 25 time, addressing some of the concerns that have been 1 raised by advocates here today? 2 And, so, is there a path, where: 3 Deciding where the contribution rate is? 4 Who is contributing? 5 Where that threshold is for guaranteed jobs 6 and protections? 7 The number of weeks for which a person can 8 take paid family leave, whether or not there's 9 intermittent leave, or whether it's taken as a 10 block? 11 Are there -- is there a path where there's a 12 structure that allows us to advance this discussion 13 with the support from all sides? 14 And do you see that as a viable option? 15 KENNETH POKALSKY: I think as far as we can 16 answer is, you know, we've -- you know, we're 17 representing a membership, and we've heard what 18 their concerns are. 19 The one thing I could respond is that, you 20 know, we're not a position to, you know, support a 21 mandatory, a new, you know, labor mandate. 22 We hear is, the more you address the 23 practical concerns of compliance, the more this 24 looks like the federal Family Medical Leave Act, in 25 terms of the parameters and the application. 1 SENATOR MARTINS: Very well. 2 Anyone else? 3 Oh, I'm sorry. 4 Senator Addabbo. 5 SENATOR ADDABBO: Thank you, Mr. Chairman. 6 I want to thank both Chairs and the staff and 7 members for this hearing today, and for all those 8 who have given testimony. 9 Tom, Ken, thank you so much for being here 10 today. 11 Please note that when we do a bill like this, 12 it's certainly not drawing (unintelligible) on the 13 backs of businesses. 14 We all understand what our businesses mean 15 throughout the state, and certainly the backbone of 16 certain segments of our economics. 17 And, certainly, you know, throughout my 18 district, you know, these small businesses are the 19 little employment centers that employ local people. 20 So I know the value of protecting our 21 businesses. 22 And, again, I would just certainly focus, but 23 I guess, through this bill, we're trying to improve 24 upon the relationship between the employer and the 25 employee, making the better workplace throughout the 1 state. 2 So, certainly, that's my focus. 3 Just wanted to comment on a couple of things 4 that were mentioned. 5 Tom, you mentioned the overtime, and, 6 certainly, there's a cost in possibly hiring another 7 part-timer. 8 Just to reemphasize that, there is money 9 there. 10 If the person who has left to take that 11 12-week leave, that the insurance is paying that 12 employee, so the employer has the salary of that 13 employee who has left, for spreading it out over 14 hiring, possibly, a part-timer, or, distributing it 15 as far as overtime. 16 So, I don't think there's an additional cost, 17 certainly, for the employer. 18 And, Ken, the current system of paid leave, 19 I think, and what we're trying to do here, is 20 possibly apples and oranges, because the current 21 paid-leave system needs to be improved. 22 You know, currently, the TDI hasn't been 23 changed, that number is still the same, of $170 a 24 week, from 1989. 25 You know, what is your opinion about 1 something that has not been changed, that tries to 2 help an employer -- employee, that hasn't been 3 changed since 1989, is that acceptable to you? 4 KENNETH POKALSKY: Well, let's remember what 5 that is. 6 That is an employer-required coverage for 7 injuries not related to work. 8 SENATOR ADDABBO: Right. 9 KENNETH POKALSKY: We're one of five states 10 to have it. And no state has adopted a TDI program 11 since 1969. 12 So, I would say that it's not -- from that 13 I would suggest, it's not really in the mainstream 14 of state-level policy actions these days. 15 But, again, I would put it in the context of, 16 I know we're here to talk about one bill. 17 Our membership has to deal with all of the 18 other things that aren't being talked about today. 19 So if we want to increase a cost of any 20 employer mandate, there's a lot of things that we -- 21 issues we have in employer mandates that aren't 22 being talked about. 23 I think it has to be looked in that context. 24 So, yes, I think that there would be concerns 25 to say, that we should, you know, both, adopt a new 1 leave-coverage mandate, and, you know, do a 2 3 1/2 times, that's the proposal on the table today. 3 One of the proposals that's before the 4 Legislature, to do a 3 1/2 times increase in the 5 benefit under TDI as well. 6 SENATOR ADDABBO: I appreciate you at least 7 understanding that this needs to be looked at. 8 As in your recent statement, you know, we 9 need to look at this. 10 To show the importance of what the 11 Business Council opinion is about this, have you 12 been contacted by advocates for the Assembly bill? 13 Have you been contacted by certain advocates 14 for the paid family leave to try to get your opinion 15 on this? 16 KENNETH POKALSKY: Have we? 17 THOMAS MINNICK: We certainly have, Senator. 18 A number of the testifiers ahead of us, 19 I, with several of our member companies, 20 HR directors, sat down for almost two hours about a 21 month ago at the Business Council headquarters, and 22 we talked about, specifically, the Assembly bill, 23 and, of course, the issue, in general. 24 So, yes, there's been very -- this year, 25 especially, there's been very open -- 1 SENATOR ADDABBO: More so than in years past? 2 THOMAS MINNICK: Oh, yes. 3 SENATOR ADDABBO: Right, yeah, I've seen 4 that, too. 5 KENNETH POKALSKY: But, also, I'll just add, 6 because you may not be aware, that we worked with, 7 and Senator Savino knows this story well, we reached 8 out to the labor advocates on reforms on Wage Theft 9 Prevention Act, which produced a compromise, where, 10 it did some regulatory relief for us, and we think 11 created a more useful enforcement mechanisms for 12 state in cases where employers were actually 13 stealing wages from employees. 14 We reached out to -- I don't know if we 15 reached out to them or they reached out to us, but 16 we responded to the concerns of labor advocates on 17 the labor-law components of the Women's Equality 18 Act: The disparity impact. Challenges attorney's 19 fees in pay-discrimination cases. Full coverage or 20 full applicability of state human-rights law. To 21 clarify and emphasize that employers have to provide 22 reasonable accommodations to -- for medical 23 conditions related to pregnancies. 24 You know, we have worked with labor advocates 25 on issues. 1 We may not be able to reach agreement on 2 everything, but we have. And sometimes we've done 3 the reach-out, sometimes they've come to us. 4 But I think we have a record of, you know, 5 where there's a compromise to be had, we've reached 6 them. 7 Some of them take three years, but, we've 8 reached them. 9 SENATOR ADDABBO: And, you know, listen, I'm 10 a firm believer that great things happen when 11 dialogue occurs, and we're inclusive about each 12 other's wants and needs and concerns. 13 And I'm hopeful that, if you have mentioned 14 the record of success in the past of negotiating 15 with labor, and with the -- again, with the focus of 16 the Business Council, that we here, too, with the 17 paid family leave, can come to some agreement and 18 some common ground with regard to this issue. 19 And, so, I hope those conversations with the 20 advocates with paid family leave continue, and we 21 keep an open door. 22 And, certainly, if I can be of any help, 23 please let me know. 24 But I do look forward to working on this 25 issue, because, like I said, I don't think it's a 1 question of "if" paid family leave ever happens. 2 I just think it's as question of "when" in this 3 state. 4 Thank you, Mr. Chair. 5 SENATOR MARTINS: Thank you, Senator. 6 Thank you, Senator Addabbo. 7 Gentlemen, thank you. 8 Appreciate it. 9 KENNETH POKALSKY: Appreciate your time. 10 THOMAS MINNICK: Thank you very much. 11 SENATOR CARLUCCI: Next we'll hear from 12 Michael Durant, the director for New York State, 13 National Federation of Independent Businesses. 14 MICHAEL DURANT: Good afternoon. 15 Thank you to both Senator Martins and 16 Senator Carlucci, Senator Savino, Senator Addabbo, 17 for hanging with us. 18 I know there's a lot of things going on, so 19 I will not read my testimony verbatim. I'll just 20 kind of go through some key points that I'd like to 21 make, and happy to respond to any questions you or 22 your staff have on this issue, moving forward. 23 NFIB represents 11,000 small and independent 24 businesses across the state; Long Island, 25 New York City, all across upstate. It covers, 1 virtually, every, I dare say, business within any 2 industry in the state. 3 And, rightfully so, there's been some 4 conversations about small business and paid leave, 5 and the small-business experience in other states, 6 and the impact. 7 And I appreciate the recognition by all 8 members of the Joint Committee today, taking a look 9 at that. 10 Small business is integral to our state's 11 economic future, our economic competitiveness. 12 Over 3 million New Yorkers are employed by 13 small businesses. 1 in 5 New Yorkers is employed in 14 a business that has 20 or fewer employees. 15 And they do, largely, to Senator Sander's 16 comments, I think, get excluded from positive 17 economic efforts, and disproportionately are 18 negatively impacted. 19 I think we can use -- I could highlight a 20 whole variety of issues, issues being talked about 21 today, and, this week, as the budget gets finalized. 22 They have not seen their taxes dramatically 23 reduced as we've seen in other places. They see 24 startup programs and targeted economic-development 25 programs, and small business, largely, don't qualify 1 or are excluded. 2 You know, the typical NFIB member has five to 3 eight employees, and that's anywhere from 4 four hundred fifty to eight hundred thousand dollars 5 a year. 6 So we're talking about, where you get your 7 hair cut. Probably where you maybe get your family 8 pizza on a Friday, your deli. 9 We do have manufacturers. We do have, you 10 know, some small startup; tech firms, et cetera. 11 But, predominantly, that is what I represent. 12 And I think what's important with leave 13 mandates and labor mandates, in general, and it gets 14 lost in public-policy conversations here in New York 15 quite a bit, is that there's not a 16 one-size-fits-all. 17 Too often, business gets lumped as business: 18 the chain stores, the retail stores, the major 19 corporations, Fortune 500 companies. But they 20 forget that the overwhelming private-sector 21 employers in the state, and in this country, are 22 small employers. 23 So, within even the small business, there are 24 complex issues and variables that exist. 25 Do they only employ hourly? 1 Is it only part-time work, first, that they 2 rotate? 3 Is it full-time, part-time? 4 Is it combinations of any of it? 5 So what I ask, when you look at this issue, 6 when I look at labor mandates, don't paint with a 7 broad brush, and continue to take consideration of 8 this. 9 We have opposed paid-leave mandates, and -- 10 or, inflexible mandated leave requirements, not just 11 here in New York, but as an organization across the 12 country. 13 The problem is, we feel, is that, and it was 14 alluded to before, that most small businesses 15 already offer some sort of paid or unpaid leave. 16 According to a national NFIB survey 7 years 17 ago, 97 percent of our members indicated that they 18 provide flexible leave. 19 If you even look at the New York City debate 20 around sick leave, the Partnership for New York City 21 found that 70 percent of small businesses offered 22 formal paid time off, and 62 percent offered paid 23 sick time. 24 Of those that do not offer, when we survey 25 our members, they often, on a case-by-case basis, or 1 an informal policy, do allow leave for the reasons 2 we are looking at today. 3 And this is in spite of the FMLA exempting. 4 Now, I think what this speaks to is, small 5 employers, especially in this new economy, 6 acknowledge that they're competing with big-box 7 stores, they're competing with major corporations, 8 they're competing with each other, and they're 9 competing in the different business climates each 10 state has, and they understand that to have valued 11 employees, they need to offer the best compensation 12 and wage that they can. 13 And that's what they are trying to do. 14 I know, previously, they've talked about 15 replacement worker, and we've heard that 16 conversation. 17 For a too-small business, that can be an 18 issue. 19 If you think about the auto-repair shop that 20 employs four people, you have four bays, one's not 21 there, you have to replace that somehow, or, you are 22 going to have overtime costs, or somebody is going 23 to have to cover. 24 So, there can be a disproportionate impact, 25 financially, on a small employer with that. 1 Sometimes, in other states, we've seen, 2 depending upon what the compensation package, a 3 paid-leave package is put in place, it does increase 4 costs on small employers, forcing them to modify an 5 existing plans that they. 6 We've seen paperwork requirements, you know, 7 with wage theft, that, sometimes, that can 8 disproportionately impact small business. 9 So my point, and I can go through a whole 10 bunch of other things, and I don't need to, is where 11 I'm coming from is different than probably what a 12 lot of other business organizations or business 13 leaders would come from. 14 The impact of this issue on small employers 15 is tremendous. 16 And I think that, Senator Savino, you said, 17 you know, We're looking at this issue. We can't 18 look at it all. 19 I don't have that luxury, because I represent 20 such a varied and diverse group of employers that do 21 have complex issues. 22 And they are looking at minimum wage, they 23 are looking at health-care costs, energy costs, 24 workers' comp costs, UI, et cetera. 25 And if they're being excluded from positive 1 economic-development efforts, if they're being 2 excluded from positive tax reform, and these things 3 keep happening, it does impact them, and it does 4 impact their bottom line. 5 And, leaving you with this: 6 I think that because so many in our surveys 7 show that small employers are offering it, I think 8 that just mandating it is not going to allow them to 9 have the affordability to offer it. 10 They're not doing so because they can't, 11 because they understand that this is a new economy 12 and they have to offer something, to compete. 13 So that's me paraphrasing it all, and, have 14 at it. 15 SENATOR MARTINS: Senator Savino. 16 SENATOR SAVINO: Thank you. 17 Thank you. 18 Thank you for, you know, not reading your 19 testimony. 20 And I'm not going to debate with you the 21 challenges and the pressures that are appraised on 22 small businesses by the State of New York. 23 You know, I feel for you on that. 24 The only point I'm going to ask you again is: 25 Whether you're in large business or a small 1 business, your employees have these events in their 2 life and they have to take time off. 3 So if you're not paying the wage replacement 4 for them while they take that time off, isn't that 5 lifting a burden on you? 6 MICHAEL DURANT: I don't disagree that these 7 life events are going to happen. 8 SENATOR SAVINO: Right. 9 MICHAEL DURANT: Absolutely. 10 I think that what it comes down to, is not so 11 much the cost there with a replacement worker, but 12 also need to look at, maybe the loss of business 13 that losing that employee has, and how do you then 14 make up the difference? 15 SENATOR SAVINO: But don't you have to do 16 that anyway? 17 MICHAEL DURANT: Well, but the -- 18 SENATOR SAVINO: It's happening. 19 MICHAEL DURANT: -- but the challenges are 20 increasingly difficult. 21 SENATOR SAVINO: So -- but, also, wouldn't 22 you say, if I'm an employee and I work for -- you 23 know, I'm one of those auto mechanics, and there's 24 only five of us, the owner and the four of us -- and 25 I have this event in my life, and, I need to take 1 the time off, and I have this wage replacement, this 2 paid-family-leave program now, that guarantees I'm 3 going to get paid, I'm more likely to come back to 4 work for you in the six weeks? 5 Because, one, I like my employer, I'm happy. 6 I've had that stability in my life. You're able to 7 let me go and deal with that. I'm going to be the 8 kind of productive employee that you want. I'm 9 going to come back to you; 10 As opposed to, I don't have that, I take the 11 time off, I can't afford it, you can't pay me, 12 I quit, you're stuck, and now you have to hire 13 somebody. 14 MICHAEL DURANT: Right. 15 So -- 16 SENATOR SAVINO: You could stop right there. 17 [Laughter.] 18 MICHAEL DURANT: That would be nice. Right? 19 SENATOR SAVINO: That would be the answer 20 I want. 21 MICHAEL DURANT: Well, look, and I think 22 that, sometimes there is truth to that. 23 But, at the same time, because some small 24 businesses require very skilled replacement workers, 25 which are very hard to find, which then feeds into 1 your argument. 2 Some do not. 3 But, again, I think one of the biggest 4 problems I have in looking at this, and, like your 5 question, Senator Addabbo, to the Business Council, 6 we worked with labor on workers' comp, we worked on 7 UI, we worked on wage theft, we were happy to meet 8 with labor and other advocates -- and some of these 9 advocates that testified today have reached out to 10 me, and happy to talk with them -- there's a trust 11 factor. 12 You know, if I take just the issue -- and I'm 13 not poking the bear -- but if I take the issue of 14 minimum wage, this was a big issue, we just did it 15 two years ago, it's being phased in, now it's going 16 to happen again. 17 If you structured a paid-leave mandate, and 18 say it excluded 25, or it excluded 10, whatever it 19 is, we're going to be here next year having this 20 conversation. 21 If it's just an employer, if employers are 22 excluded, whether we use the TDI or the general 23 fund, that may be where we start, but where are we 24 two years later? 25 And, ultimately, who I represent, gets the 1 bulls eye. 2 And that's the problem I have even starting 3 having these conversations. 4 SENATOR SAVINO: I have no answer for you on 5 that. I really don't. 6 But I do think that if we -- we can develop a 7 policy here in New York State that takes into 8 consideration the concerns of large employers and 9 small employers. 10 MICHAEL DURANT: And, Senator, we'll always 11 have that conversation just to at least have it. 12 SENATOR SAVINO: Thank you. 13 MICHAEL DURANT: Thanks. 14 SENATOR CARLUCCI: Senator Martins. 15 SENATOR MARTINS: Just to dovetail off that, 16 and I appreciate the candor, I appreciate the 17 willingness to have the discussion, and I appreciate 18 the reluctance to have the conversation under the 19 circumstances that you detailed, because that's 20 reality. 21 But, again, I'll ask the same question I've 22 asked before: 23 You know, if we're attentive to those 24 concerns that are most likely to affect small 25 businesses, as a small business owner myself, if 1 I have -- well, let's say I worked for Senator 2 Savino. 3 SENATOR SAVINO: You would be very lucky. 4 [Laughter.] 5 SENATOR MARTINS: Right. 6 -- and I had the need to ask, because I had a 7 need to care for a loved one, I would go see my 8 employer and ask for that time. 9 If they denied me the time, I would be left 10 with the option of either continuing to work or 11 quit. 12 If I quit, again, the flexibility, that that 13 would allow the employer to make that decision: 14 One, can I afford to allow this person to 15 quit? 16 Can I afford to give them, you know, the 17 multiple weeks off to care for their loved one? 18 Or, frankly, if I can, I will. And if 19 I can't, I can substitute them and bring someone in 20 tomorrow, even though that's not my choice. 21 But, flexibility, I think is important when 22 we look at it from a small-business standpoint. 23 Certainly, the small businesses that you 24 represent, being in that range, 10 or less, 25 I understand that. 1 I understand that you just don't move people 2 around that way. That they have a role, and, 3 oftentimes, a critical role, in the viability of 4 that business. 5 If we are to incorporate those concerns, and, 6 if we get a commitment from the advocates that that 7 is sufficient, and that they will not come back in a 8 year or two, or three, or four, but allow the system 9 to roll itself out, similar to some of the examples 10 that we've seen in some other states, we can at 11 least continue the dialogue. Right? 12 MICHAEL DURANT: There you go. 13 SENATOR MARTINS: I appreciate it. Thank 14 you. 15 I appreciate you being here. 16 Thank you. 17 MICHAEL DURANT: Thank you. 18 SENATOR CARLUCCI: Thank you, Michael. 19 MICHAEL DURANT: Thanks, appreciate it. 20 SENATOR CARLUCCI: Next, in the convenience 21 of time, we're going to ask that the speakers come 22 up together. 23 We have Ms. Dolan, the assistant director 24 of DC 37; 25 Susan Antos, the senior staff attorney at the 1 Empire Justice Center; 2 And, Gregory Bender, the co-director of 3 policy with United Neighborhood Houses -- oh, 4 Kevin Douglas, the co-director of policy, 5 United Neighborhood Houses. 6 SUSAN ANTOS: Good afternoon. 7 SENATOR CARLUCCI: So please just introduce 8 yourselves, and if you could give us a summary of 9 your testimony, that would be really appreciated, 10 and then we'll do questions. 11 SUSAN ANTOS: Well, thank you, 12 Senator Martins, Senator Carlucci, Senators Savino 13 and Addabbo, for staying through this day. 14 A very important -- very important issue, and 15 thank you for having this hearing. 16 As you indicated, my name is Susan Antos. 17 I'm a senior staff attorney at the Empire Justice 18 Center. 19 Today I am testifying on behalf of 20 Winning Beginning New York, which is a coalition of 21 early care and learning organizations, and advocacy 22 organizations, across the state that care about 23 early care and learning issues. 24 Everything I say today is also supported by 25 the Empire Justice Center. 1 I'm on the steering committee of 2 Winning Beginning, and I'm also the co-chair of the 3 child-care subcommittee. 4 All of you should have gotten a packet. 5 And in the interest of time, I just want to 6 highlight for you a few of the key points, and point 7 to you to some of the resources that are in your 8 packet, that I hope will help you as you think 9 through the important issue of funding for 10 child-care subsidies. 11 The position of Winning Beginning this year, 12 was that $100 million should be -- additional 13 dollars should be invested in child care this year. 14 The Assembly has added twenty-five in their 15 budget bill; in the Senate, twenty. 16 We'd definitely like to see more. 17 The reason why, is that we strongly believe 18 that child care is important, for many reasons. 19 One was mentioned by Senator Carlucci, which 20 is, brain development, quality child care is 21 critical. 22 And another by Senator Savino, which is, we 23 have to see this as a piece of economic development. 24 As Senator Kennedy said, Erie County may have 25 gotten a lot of money to help with its economic 1 development, but if they don't have enough money for 2 parents to pay for child care, then the jobs ring 3 hollow. 4 I brought a copy for each of the Chairs, and 5 I'm happy to show anyone else, if you don't already 6 have this report. It's a "Self-Sufficiency Standard 7 for New York State." 8 It's a report that analyzes, county by 9 county, and within family -- by family size, what it 10 costs a family to live. 11 And it details what's called a 12 "self-sufficiency wage"; which means, what it costs 13 a family to live and work in New York State. 14 It uses very modest markers: The fair-market 15 rent, for rent. It looks at the market rate for 16 child care. 17 And what it finds is that, in most counties, 18 people are paying more for child care, or an equal 19 amount, than they are for rent. 20 And when you're making the minimum wage, even 21 slightly over the minimum wage, there just are not 22 enough dollars there to make ends meet. 23 The self-sufficient wages, when you flip 24 through this book, you'll see, kind of start in the 25 high teens, at around $17 an hour, and go up as high 1 as 30, depending on where you live. 2 And that includes nothing for student loans, 3 for credit card payments, for entertainment. It's a 4 barebones working budget. 5 It does include transportation. 6 So, funding for child care is a critical need 7 for working families in New York. 8 And so, in your packet, I wanted to highlight 9 a few things that will help you to analyze that 10 need. 11 One, there's a one-page handout called 12 "Child Care In Crisis." We try to keep this up to 13 date. 14 And what it does is, is it documents, county 15 by county, what counties are no longer able to serve 16 families, up to 200 percent of poverty. 17 This is a very conservative document, because 18 some counties keep their eligibility level at 19 200 percent, but they've shut the door to intake for 20 months. 21 You go to apply for a subsidy and they're 22 saying, We're tapped out. Come back another day. 23 Other counties have waiting lists. 24 In New York City, technically, the 25 eligibility level is 200 percent of poverty. 1 When I talk to my friends at the Center for 2 Children's Initiatives, their data shows that there 3 are very few families over 135 percent of poverty 4 that are able to access subsidies. There's just not 5 enough money in the system. 6 The other priorities of Winning Beginning 7 that have to do with child care, that I want to 8 alert you to the handouts in your packet around 9 these, are, that there be a fair and equitable 10 policy for the payment of absences. 11 This helps providers who are working people. 12 For those of you who have paid for child 13 care, I know when I paid for child care, when my 14 children were sick, I had to pay the provider 15 regardless of whether or not they were there, or 16 I was there, because, the provider has to turn on 17 the lights, pay her staff, pay for food, pay for all 18 of the activities, regardless of whether or not my 19 child shows up. 20 This -- for every provider in New York State, 21 that's how they bill private-pay parents. 22 But for subsidized children, they keep track, 23 in this very complicated data-system, attendance, 24 and providers are only paid, for the most part, when 25 children are there. 1 So, we have a piece on the "absence" 2 policies. 3 And we have -- we have a chart attached which 4 shows what the policies are, county by county. 5 The reason this should attach your attention 6 is coming down the pike. 7 The federal law has now told states that they 8 can't have this two-tiered system. That they're 9 going have to start paying subsidies for low-income 10 children the same way they're paid for in the 11 private market. 12 So, the New York Legislature's going to have 13 to start thinking about how we're going to do this, 14 and, we're happy to help provide you with any 15 information we can that might make this easier. 16 So, again, we have the chart for absences. 17 The other chart that I think you may find 18 informative and interesting is, we allow 19 social-services districts to choose what the family 20 share is, which means what a parent co-pay is. 21 So even though our child-care program, right 22 now, is almost 80 percent federally funded, and the 23 rest is about 15 percent -- or, 75 percent of that 24 remainder is State money, and the rest is local 25 money, we allow localities to choose what the parent 1 fee is, and the parent fee is so dramatically 2 different across the state. 3 Some families pay 5 percent of their income. 4 Some families pay 17 1/2 percent of their 5 income. 6 It isn't fair. 7 And where you're really going see the crunch 8 is, in counties that are now getting this 9 facilitated enrollment money, which is great, I'm 10 glad they're getting it, if they're in high co-pay 11 counties, the co-payment is going to go up to 12 25 percent of the their income. 13 That makes no sense. 14 When Monroe got facilitated enrollment money, 15 the local legal-services program started getting 16 calls there, because the co-payment assessed was 17 higher than the cost of care. 18 People were paying thousand and thousands of 19 dollars a year for slots that were cheaper if they 20 paid for them themselves. 21 So we have to design a system where 22 co-payments make sense. 23 One other thing that I wanted to raise for 24 you, in terms of, and I know this has come up in 25 legislative sessions before, is the issue of how we 1 choose to spend dollars. 2 Do we choose to spend them on working 3 families who have jobs, or, are we going to require, 4 and we've discussed, that infant care is the most 5 expensive form of care? 6 We have a program for welfare recipients in 7 New York State where we do not give them much of a 8 work exemption. 9 It's interesting talking about paid family 10 leave here. 11 If you're the poorest of the poor in 12 New York, you are allowed three months on welfare, 13 and then you have to go back into a work program. 14 The work program -- even if you don't have a 15 job, infant care is the most expensive. 16 So you have to do job search, you have to go 17 to resume-writing classes, and you're paying, 18 perhaps, the county is paying, the full slot, 19 because, infant care, welfare recipients have no 20 co-payments, while they're shutting the door to 21 low-income families with real jobs, saying, We don't 22 have enough money for child care. 23 We have in your packet, a memo that has been 24 endorsed not only by us, but the Legal Aid Society 25 in New York City and the Federation of Protestant 1 Welfare Agencies, where we suggest, that if counties 2 allowed, and this would be optional, if people 3 wanted to go into job-search programs -- job-search 4 programs, or any other programs, they would be free 5 to do it if they were on public assistance. 6 But if they want to take a work exemption for 7 up to a year, that would save the county over 8 $5 million -- the State, I'm sorry, $5 million a 9 year, to free up for subsidies for working families 10 with real jobs, and save an additional $3.5 million 11 in administrative costs for not having all those 12 people in workfare programs, because they have to 13 verify their job search. 14 Other states that have done that have found 15 significant savings. 16 So those are the key points. 17 There are more points in our testimony about 18 some of the other Winning Beginning priorities, 19 about integrating pre-K with wraparound child-care 20 programs. 21 I hope you'll take a look at it. 22 I'm available for any questions. 23 SENATOR CARLUCCI: Thanks. 24 Mr. Douglas. 25 KEVIN DOUGLAS: Good afternoon. 1 Thank you, Chairman Martins, Chair Carlucci, 2 Senator Savino, Senator Addabbo. 3 I appreciate you sticking around to hear our 4 testimony this afternoon. 5 My name is Kevin Douglas. I'm co-director of 6 policy with United Neighborhood Houses of New York. 7 We're an association of 38 settlement houses 8 and non-profit providers in New York City that 9 provide services to about half a million New Yorkers 10 a year, in everything from early childhood 11 education, through older adult services. 12 We're a very active advocacy coalition to the 13 city and state level, that look at how we make sure 14 there are good budget and policy decisions to 15 support working families, and part of that work is 16 actually done in partnership with Winning Beginning, 17 so I'll try not to be repetitive to the points that 18 Susan has made and we support. 19 I want to go to something that you mentioned 20 earlier, Senator Savino, about this being economic 21 development, and we really couldn't agree more with 22 that. 23 You know, one of things we want to emphasize 24 is that, that's not theoretical. 25 In 2013, as part of our work in a city 1 campaign to really combat the threat of cuts to the 2 child-care system, we surveyed over 1100 parents who 3 had children in the early childhood system in city, 4 and said: If these cut stood that were proposed and 5 you lost your child care, what would you do? 6 50 percent of the respondents said they would 7 quit their job. 8 50 percent of the parents said, "We would 9 quit our job if we lost the child care," because 10 they had no other options. 11 This is frightening: 2 percent said, "We'd 12 leave our kids at home by themselves." 13 So, this is really a significant issue. 14 And if these parents are quitting their jobs, 15 leaving their kids at home in unsafe situations, 16 that has an impact, obviously, on the workforce and 17 their ability to be gainfully employed. 18 So we really agree with you, and really can't 19 underscore how important we think this is to the 20 economics of this state; and, particularly, the 21 families who rely on income through their work. 22 One of the, sort of, major points I want to 23 try to make here, is we see childhood education 24 services, child-care after school, sort of a 25 continuum, and don't just see it as child care as 1 sort of the end-all, be-all. 2 We think, whether a child is 2, 3, 4, 5, 7, 3 8, 9, 10, that parent needs a safe, quality place 4 for their child to be so they can maintain their 5 work. 6 So we're very supportive of any efforts the 7 State makes to support child-care subsidies, 8 universal pre-kindergarten, after-school. 9 And to that point, I really want to thank the 10 Senate for the work that you've done in the past 11 couple of fiscal years to help us really build a 12 robust system. 13 Obviously, last year, you guys signed off on 14 a significant enhancement to services in 15 New York City; $300 million that allowed us to 16 create 50,000 slots for universal pre-kindergarten 17 in city, which was wonderful. 18 There's a smaller investment in the state 19 that can certainly be built on. 20 In addition, there was 400 million provided 21 in school aid to New York City that allowed us to 22 expand our after-school offerings, which, right now, 23 is serving 33,000 kids during the school year, 24 16,000 in the summer. 25 So these are kids and youth that are in safe, 1 productive places so their parents can maintain 2 jobs. 3 And I want to thank you for those 4 investments. 5 Similarly, last year you signed off on a 6 $55,000 million enhancement to the child-care block 7 grant. That's great. 8 It allowed providers to meet some of the 9 increased costs, as well as do modest expansion of 10 about 4500 slots. 11 So I just wanted to kind of lay the framework 12 before I talk about what we're hoping to see, by 13 really acknowledging the work that you guys have 14 done, and really commending you for it. 15 Kind of looking forward, there are a couple 16 of challenges that we're still seeing in the system 17 in New York City: One is around capacity; one is 18 around, sort of, staff wages; and one is around 19 reimbursement rates. 20 In terms of capacity, even with the 21 investments that we've seen at the city and state 22 level, right now, only 30 percent of eligible 23 families are receiving child-care subsidies. 24 It's pretty remarkable. 25 70 percent of families are, just, they're 1 sort of cut off. They can't access them. 2 And we anticipate -- we estimate that's 3 around 100,000 households in New York City. 4 Around the rest of the state, we predict 5 that -- really think that those rates are much 6 higher in terms of the amount of people who are not 7 able to draw down on these services. 8 So, 30 percent is pretty bad in 9 New York City. 10 And as Senator Kennedy can probably attest, 11 it's even worse in other regions. 12 In addition to this, sort of, staff benefits 13 and wages are a tremendous issue, as are the 14 reimbursement rates. 15 And I raise these not because there's 16 something that you can directly do to alter those, 17 but, to the extent to which there's more money in 18 the system, it gives us the ability to sort of 19 negotiate these issues with administration and the 20 City. 21 When we look at staff wages, early childhood 22 educators, and sort of the community-based system 23 that we're a part of, are seeing wages that start in 24 the mid-30s. 25 When we compare them to sort of the school 1 system, those teachers are looking at wages, you 2 know, low 50s. 3 So this creates a real drain on our system of 4 community-based providers who are trying to find and 5 retain talented, qualified staff to care for 6 children, and we really want to have the best and 7 brightest to serve those kids. 8 So, the fact that they don't have the wages 9 to do that is a major barrier. 10 Health-care costs are a huge issue for these 11 employees as well. Their wages really don't provide 12 enough for them to purchase those health-care 13 insurances, and many of them are actually just 14 opting out of that, at large. 15 Looking at the rates, this is a huge issue. 16 Non-profit providers have an unfortunate 17 track record of sort of taking funding and contracts 18 that doesn't fully cover their costs and making it 19 work, because they want to support their 20 communities. 21 We surveyed our members and found, across the 22 board, they're running about 10 to 20 percent 23 deficits on their contracts to provide child care 24 because the rates simply aren't high enough. 25 So, again, I raise these not because they 1 will be directly addressed by you, but to the extent 2 there's more money in the system for us to negotiate 3 higher rates, higher wages of pay, that will enable 4 us to retain staff and provide better services and 5 more services to people in New York City. 6 So where this leads to, sort of, 7 recommendations, and we have a couple. 8 I would really echo Susan, $100 million is 9 what we had recommended at the start of the session, 10 which would create an additional 13,000 subsidies 11 across the state. 12 We're probably past the point of sort of 13 getting to that as we wrap up the budget 14 negotiations. 15 And when -- a very concrete ask, ask that the 16 Senate support the Assembly's one-House 17 recommendation of 25 million. 18 The Senate did include 20 million in the 19 proposal, and we thank you for that. 20 If we can get to 25, it just helps us serve 21 that many more parents. 22 Long term, we would -- we think it makes 23 sense for the State not to just think about this 24 fiscal year, but what are we actually going do to 25 fix the system to rightsize it? 1 And so, by 2020, we would love to see the 2 State investing just over $2 billion; 2.2, to be 3 exact, and that is based on conversations we've had 4 with OCFS, in terms of what it would take for the 5 State to provide a subsidy to every eligible family, 6 county by county. 7 That would be a wonderful thing, I think, for 8 our workforce, to ensure every working family who is 9 eligible for child-care subsidies are able to access 10 them. 11 In terms of after-school, again, because we 12 see this as a continuous service, is, at the 13 beginning of the session, we recommended an 14 investment of $178 million to provide slots to 15 110,000 kids. 16 That was sort of making a dent in the overall 17 need, because there's over 1 million kids around the 18 state right now who qualify or could access 19 after-school, but don't have the funding in their 20 districts to allow them to do that. 21 This issue also is probably beyond your 22 capability at this point in budget negotiations, and 23 so the minimum that we would ask for is, 24 restorations to the youth-development program, and 25 advantage after-school support, after-school 1 programs, in the city and state. 2 Those are pretty modest cuts that were made 3 by the Governor, and would really just ask for your 4 support in restoring them. 5 So, with that, I will really just echo that 6 we support the Winning Beginning's agenda, and happy 7 to take any questions. 8 SENATOR CARLUCCI: Great, thank you very 9 much. 10 Senator Martins. 11 SENATOR MARTINS: Thank you. 12 Thank you both for being here. 13 You know, obviously, child care is 14 critically, anywhere you go. 15 I just wish we had more locations where there 16 was a concerted effort to promote it, because, 17 frankly, there's a need. 18 We have dual-income households, multiple jobs 19 for both parents, and the idea that you have kids 20 who don't have access to after-school programs, or 21 the idea that a person cannot return to the 22 workforce because they don't have a reasonable place 23 and a safe place to leave their children, is 24 something that, obviously, we need to address. 25 But on some of the details, when we talk 1 about the amount of co-pay, and, the 5 percent, or 2 the 17 percent, we're talking about 5 and 17 percent 3 off a certain baseline; right? 4 SUSAN ANTOS: No, I wish I were. 5 So the way that the co-payment is calculated 6 is that, you take the parents' income and you 7 subtract the poverty level, and then you apply a 8 multiplier against that. 9 The figures that we've come up with, between 10 5 and 17.5 percent, look at the resultant co-pay 11 against the household's gross-income total. 12 So, that, it does get confusing, because the 13 calculation method is based by subtracting out the 14 poverty level. 15 But when you have a high multiplier, like a 16 35 percent multiplier, and you'll see from the chart 17 in our materials that many do, if you're a family at 18 200 percent of poverty, you pay 17.5 percent of your 19 gross income as a co-payment. 20 And that co-payment is going to go up in 21 counties that have facilitated enrollment money 22 because, by taking the poverty level out first, and 23 applying 35 percent against the balance -- 24 We made a chart of up to 275, which I don't 25 have in my materials, but if you're interested, I'll 1 show you. 2 -- it becomes unsustainable. 3 SENATOR MARTINS: And I appreciate that. 4 KEVIN DOUGLAS: If I could just add to that 5 point, and absolutely agree, one of the things that 6 I neglected to add is, in that $2.2 billion 7 investment we'd love to see by 2020, in addition to 8 providing a subsidy to every family around the state 9 who would be eligible, it would allow OCFS to put a 10 cap on co-pays, and it would allow that cap to be 11 set at 10 percent. 12 Obviously, we would love to see it as low as 13 possible, but it's certainly better than 17 percent. 14 And in New York City right now, families, the 15 upper limit is sort of around 15 percent. 16 So that investment allows us to provide a 17 greater number subsidies, and really put a cap on 18 how much parents are having to outlay. 19 SENATOR MARTINS: If I understood it 20 correctly, also, and, again, correct me if I'm 21 wrong, that $100 million ask, you said would result 22 in 13,000 more subsidies, statewide? 23 KEVIN DOUGLAS: That's correct. 24 SENATOR MARTINS: For 100 million? 25 Now, is that 100 million towards the 1 75 percent of the 8 -- of the 20 percent that the 2 feds don't pick up? 3 Now, I understand that -- 4 SUSAN ANTOS: That would increase -- 5 SENATOR MARTINS: -- there was an 6 80 percent/20 percent match between the federal 7 government and local governments. 8 And that you mentioned that, three-fourths of 9 that, 75 percent of the 20 percent, was picked up by 10 the State, and the other 25 percent was picked up by 11 the local communities, even though, then you got 12 into a discussion as to the co-pays. 13 But that 100 million is that specifically 14 with regard to the three-quarters of that 20 percent 15 that the State picks up? 16 And if so, if you can work out how we got the 17 13,000 subsidies against 100 million on such a small 18 fraction? 19 Why wouldn't it be more? 20 SUSAN ANTOS: Well, the -- and I apologize if 21 I'm misunderstanding your question. 22 The 100 million would actually then increase 23 the State's share in the overall pie. 24 There is a maintenance-of-effort requirement, 25 but, this would put New York above and beyond the 1 maintenance-of-effort requirement. 2 It would be investing some additional State 3 monies for slots. 4 SENATOR MARTINS: So we would no longer have 5 the federal match, we would take on a predominant 6 responsibility for those above that level? 7 SUSAN ANTOS: Right. 8 There's -- the "match" requirement is set at 9 a specific dollar amount, and it's based on spending 10 in 1997; and, so, that amount doesn't -- doesn't go 11 up or go down. It's just a fixed dollar amount that 12 the feds set many years ago. 13 So anything additional that the State 14 invests, it does not, unfortunately, draw down any 15 more federal money. 16 SENATOR MARTINS: No, so, again, I'm glad 17 I clarified it. 18 So it does not have that match. It's just 19 the State taking on what was originally a federal 20 program, and that the feds just simply have not done 21 enough to fund? 22 SUSAN ANTOS: That's correct. 23 SENATOR MARTINS: Thank you. 24 SUSAN ANTOS: That's correct. 25 The other -- the way we calculated the 13,000 1 in slots was by using figures that OCFS gave us. We 2 use their average cost per slot. 3 And so, actually, I think that's a fairly 4 conservative estimate, because that includes the 5 cost of people who don't have co-pays, the people in 6 the system who are below the poverty level, and 7 those people are, in large part, being served in 8 many communities, they're given priority; 9 particularly, the ones on public assistance, are 10 given a guarantee. 11 So it's a very conservative estimate as to 12 number of slots that would be created, because it's 13 based on the average cost per slot by OCFS. 14 SENATOR MARTINS: So we're talking about, 15 approximately, if you just do the math, 100 million 16 divided 13,000, approximately, 7,000; or, $7,000 per 17 child for care? 18 SUSAN ANTOS: Right. 19 OCFS is $7200. 20 SENATOR MARTINS: Thank you. 21 Thank you very much. 22 SENATOR CARLUCCI: Thank you, 23 Senator Martins. 24 And I want to thank you for the work that 25 your organizations are doing, and you've explained 1 that to us quite a bit. 2 Are there some strategies that you're working 3 on to help middle-class families afford child care 4 that might not qualify for the subsidies that you're 5 talking about? 6 KEVIN DOUGLAS: I think one of the 7 interesting things that could be entertained, 8 although we're not currently working on it, is as 9 you increase the amount of money available for child 10 care, you potentially have the ability to adjust 11 eligibility levels. 12 In New York City, we have sort of two levels. 13 Access is mandated at 100 percent of the -- 14 excuse me. 15 At 100 percent of the federal poverty level, 16 it's mandated. 17 We also provide, up to households that are at 18 200 percent of the poverty level. 19 Theoretically, if we were to sort of meet the 20 thresholds of what -- county by county, what they 21 term their eligibility, you could, theoretically, 22 increase the eligibility levels beyond that to look 23 at other income bands. 24 I don't have any sort of numbers here right 25 now about what that cost would be or what sort of 1 time frame it would take to get there. 2 SUSAN ANTOS: One of the priorities of 3 Winning Beginning is that money be invested for 4 quality child care. 5 We have been very supportive of Quality Stars 6 New York, which is an initiative that provides 7 support and evaluation of child-care providers, so 8 that parents of any income level who are looking for 9 child care can see at an easy glance what quality 10 standards their providers meet. 11 There are some states that have this. 12 And, I had the experience of meeting my 13 nephew's newborn and his -- they live in 14 North Carolina -- and his wife, who lives in a state 15 that has a quality-rating system, was telling me how 16 wonderful and helpful it was to her -- she's not, by 17 any means, a low-income person -- to locate quality 18 child care for her child. 19 So we want all children, regardless of 20 whether or not they're low-income or middle-income, 21 to be able to choose high-quality care for their 22 children. 23 And investment in Quality Stars is a really 24 good step to help all children, identify, and their 25 parents choose quality care. 1 SENATOR CARLUCCI: Have you had an ability to 2 look at -- we have legislation in front of the 3 Senate that would increase the dependent-care tax 4 credit. 5 Is that something that either of your 6 organizations have explored or looked into? 7 SUSAN ANTOS: Well, I can't speak for 8 Winning Beginning on that issue. 9 We would definitely consider it. 10 At the Empire Justice Center, we have, in the 11 Rochester area, a program called -- I'm blanking on 12 it right now -- but it's an expanded FIDA 13 organization, and that is exactly the kind of 14 legislation that we would be supportive of. 15 So, thank you for alerting us to that. 16 And it is a -- it is a program that the 17 Empire Justice Center would support. 18 I can't speak for Quality Stars -- I mean, 19 for Winning Beginning. 20 KEVIN DOUGLAS: And we haven't taken a 21 position, but we will look at it. 22 SENATOR CARLUCCI: Okay, great. 23 Well -- 24 SENATOR SAVINO: Is it Hillside? 25 Is it the Hillside program in Rochester? 1 SUSAN ANTOS: No, no, no. 2 It's -- I'm embarrassed that I can't remember 3 it. 4 SENATOR CARLUCCI: Well, Mr. Douglas, 5 Ms. Antos, we want to thank you for being with us 6 today, and for your testimony. 7 And, with that, I want to thank 8 Senator Martins for teaming up on this very 9 important issue. 10 And, all the members that have been here 11 today, and made it through the end, with that, 12 this -- we're adjourned. 13 Thank you. 14 15 (Whereupon, at approximately 2:09 p.m., 16 the public hearing held before the New York State 17 Senate Standing Committee on Labor and 18 Senate Standing Committee on Social Services 19 concluded, and adjourned.) 20 21 ---oOo--- 22 23 24 25