Thursday, March 22, 2007

Is Paid FMLA a Good Thing?

In the Oregon legislature there is a bill being debated that would allow those who file FMLA to be paid a percentage of their wage for up to six weeks. The suggested method of funding is through payroll deduction or tax of all those who work in Oregon. The question comes down to adding a new tax to the payroll structure in order to fund FMLA requests. The key source of debate focuses on the birth of a child but FMLA is used for a multitude of other reasons as well.

Without getting in a debate of emotional platitudes let us deal with the key issue of the bill. The bill basically set up a short-term disability policy for all those who work in the state of Oregon. This policy would be funded through small or limited taxing of all those who work in the state. The bill would require employers to record and transact the collection and distribution of these moneys under state rules and oversight. The bill does not formally declare how the state would manage or direct the funds. It offers no answers as to what cost to administrate such a fund or what guidelines would be used in its distribution.

The simple argument that society functions in a pay check to pay check roll and this loss of income under the current system would be too great a burden on the average Oregon worker. To simply suggest that employers offer short term disability insurance as a standard benefit to employees does not appear to be enough for those who propose the bill. I do not see the need for the state to duplicate what already exists in the general market. Short term disability insurance is already available under the regulations set by the insurance commissioner in the state of Oregon. Why does the state find it necessary to increase the tax base on everyone? Those who desire such a policy simply need to be made more available to it. These policies are generally low in cost and accomplish the stated goal far better then what is currently being proposed.

I find it excessive to force all those who work in the state to take on this additional tax burden. Once again the state in looking for ways to separate its citizens from their money in order to create another social program. If many truly are barely making it why do we further reduce their take home pay? Will we again need to raise the minimum wage in order to cover this new expense? As I have pointed out in many other articles I have written on the minimum wage that this simple tax is not that simple to render.

This new deduction will come with new reporting requirements. These will force an increase in the cost of doing business in the state of Oregon and ultimately reduce the competitive ability of companies operating in the state. These added costs will translate into reduced work force of increased cost of goods sold. These do no sound like the benefit will match the burden. Who will be willing to be the sacrificial lamb?

If the birth of a child is to be the poster issue, let us ask how this family intends on paying the cost of raising the child if they can’t afford its birth? Are we once again attempting to create a cradle to grave entitlement program without considering how we will raise the money to pay for it or at what cost?

Article of Interest

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