WSLC Legislative Update -- March 11, 2005

Wednesday, March 16 at 5 p.m. is the deadline for bills to pass their houses of origin. That means the floor action will be fast and furious every day between now and then.

WSLC Legislative Tracker™

The award-winning website of the Washington State Labor Council has now posted the WSLC Legislative Tracker®.

The WSLC Legislative Tracker© is a sophisticated computer... thing... where you can track many of the key bills being monitored by the Washington State Labor Council in the 2005 legislative session. It is automatically updated with up-to-the-second status reports on the bills every time our webmaster gets around to it, which he assures us will be "often."

Check it out at www.wslc.org/legis/tracker.htm.

Come Thursday, some bills will officially be dead for 2005. Unfortunately, the Health Care Responsibility Act will be one of them (see explanation below). But there are still issues of great importance to working families that should be voted upon before the deadline: unemployment insurance changes, "retro" reform, paid family leave, and others.

It's not uncommon for laws to have unintended consequences -- especially when they are approved with no public hearing, in the middle of the night, at the end of a special session, to keep one your state's biggest employers from leaving.

It's also not uncommon for the legislature to revisit new laws and make adjustments. This usually happens after there is some evidence that those unintended consequences exist.

When lawmakers approved sweeping changes in our state UI system as part of the 2003 incentive package for Boeing 7E7 assembly work, they were told by business lobbyists that total cuts in benefits would be about 6.7%. As it turns out, the new system for calculating benefits cut far more than that, and did so in a way that disproportionately and unfairly harms construction, agricultural and other workers whose incomes fluctuate throughout the year.

In 2004, in just the first phase of cuts, the Department of Employment Security reports that unemployed workers lost 7.2% of total benefits worth more than
$51 million. With additional benefit cuts that began in 2005, assuming claims similar to last year's, workers will lose another $109 million in benefits, accounting for more than 16% of total benefits.

As you read this, business lobbyists are telling legislators not to change anything on UI. They consider it just another cost of doing business, something that can make the state "uncompetitive." This shortsighted bottom-line view harms not just families with unemployed workers, but also many small businesses and our state's economic stability.

That's what UI is there for: some temporary wage replacement AND to stabilize the economy in communities hit by unemployment. UI benefits don't go in the bank, they are immediately spent at local businesses on basic necessities like food, housing and transportation.

The U.S. Department of Labor estimates that for every $1 of unemployment benefits, $2.15 of economic purchasing power is created. That means the state economy will lose more than $234 million in purchasing power this year alone because of the unintended severity of 2003's UI benefit cuts. That money would keep a lot of people from losing their homes and cars, and keep many small businesses afloat.

SB 2255 is a "title-only" bill from Rep. Steve Conway (D-Tacoma) now being written as legislators and staff crunch the numbers on various proposals. Eventually, this bill will attempt to restore some of those lost benefits, especially for construction and other workers who've seen their benefits drop by 30-40%. We support this effort and thank lawmakers willing to repair some of the damage needlessly inflicted on involuntarily unemployed workers.

The Washington State Labor Council strongly supports SB 5842, sponsored by Sen. Mark Doumit (D-Longview). It would strengthen Labor and Industries' retrospective rating program, which provides monetary incentives to similar employers who together improve workplace safety.

The "retro" program has ridden below the radar screen for many years. But recently it landed in the public spotlight for all the wrong reasons. Business groups are using retro for purposes it was never intended, including to fund lobbying activities, lawsuits, initiatives, campaign contributions and other things that have nothing to do with workplace safety.

Several legislators floated ideas about how to improve retro by reining in these unrestricted "profits." For their trouble, they were lambasted by business groups and some newspapers, and accused of seeking "political payback."

This politicized atmosphere, in itself, should sufficiently demonstrate there is a problem.

The WSLC rejects these payback accusations as cynical, simplistic, and in the case of business groups, self-serving. It is unacceptable for a government program to be used as a private cash cow and then be insulated from change by the political influence that money purchases. That ain't free speech; it's inherently corrupt.

If unions were the ones skimming millions every year from the workers' compensation system, some heads in Olympia would be exploding right now. And the ideologically impaired argument that retro abuse is no different than unions getting political money from state employees' dues holds no water. First of all, unions are democratic organizations where members get to vote how their money is spent. If they disagree, federal law grants them the right to avoid contributing to political activities.

But more importantly, there is a big, big difference between the pay workers earn and the incentives government pays to businesses for a specific purpose. Retro incentives are not "free money." If the program's intent is merely to hand over money to safe employers, why not just lower the premiums for those with good experience ratings? (That would save some administrative costs, right?)

Retro's whole point is to encourage similar employers to develop and implement safety programs unique to their industries -- not just to hand over money, no strings attached.

All that said, Sen. Doumit's bill addresses some of the critics' concerns. Business groups say that the issue of what constitutes an appropriate retro fee is best left to the participating employers and the association managing the group. What SB 5842 does is clarify the intent that all retro fees, charges, incentive payments and reserves, are to be used for the purposes of the program: to improve workplace safety, accident prevention and worker outcomes. The remainder of that money should be returned to the individual employer.

By July 2006, L&I would return all incentive payments directly to the individual employers of retro groups, not to the administrator as is currently done. Then, those employers can pay their retro administrator whatever fee they see fit. This change recognizes the importance of promptly and directly sending payments to the employers who earned them.

Finally, SB 5842 clarifies the legislative intent that retro groups be comprised of members whose business and activities are substantially similar.

SB 5842 is a fair and reasonable bill that takes into consideration the concerns of retro reform's critics. But most importantly, it will restore this program's focus to what it was intended to be: workplace safety.

SB 5069, sponsored by Sen. Karen Keiser (D-Des Moines), and HB 1173, sponsored by Rep. Mary Lou Dickerson (D-Seattle), provide for Family Leave Insurance. Workers who must temporarily leave their jobs to care for newborn or adopted children, or to care for sick family members, would get up to 5 weeks of job-protected paid leave. The maximum benefit would be $250 per week, and cost workers about $40 a year. It would apply to all businesses (the federal Family Medical Leave Act only provides unpaid leave and only covers workplaces with 50 or more workers).

After pundits were split on whether this was pro-business or anti-business -- clearly it's pro-working family -- several changes were made to appease business interests.

Even so, some business groups were working hard this week to kill the bill. The National Federation of Independent Business, the Association of Washington Business and the Washington Retail Association were distributing leaflets filled with erroneous information about the Family Leave bills. The lesson: Just because somebody prints it on a sheet of paper doesn't make it true. (If you read it online, however...)

These bills are not only pro-family they are pro-business. Individual business owners testified that paid family leave would help them save money and retain skilled workers. Rather than valuable employees having to quit because of an illness in the family, they could get a partial wage and then return to the job for which they have been trained.

As previously mentioned, the Health Care Responsibility Act will not be getting a floor vote in 2005. Apparently there was insufficient support for passage, with many legislators preferring to focus on health care for children this year. Some reluctant legislators indicated they wanted revisiting the HCRA after more information is known about the extent to which large employers are being subsidized by taxpayer-financed health programs. We'll provide a more detailed postmortem in our end-of-session 2005 WSLC Legislative Report and Voting Record.