The Paid Family Leave Act that Gov. Chris Gregoire signed into law in May is raising red flags among employers, who are concerned about the potentially high cost of the system, as well as among employment attorneys, who see a lack of clarity as to how the law will be implemented.

Funding for the program is a key issue. The Washington Legislature appropriated $18 million to administer the program. But that amount will not cover the $250 a week for five weeks that the new law promises parents with newborns or newly adopted children. Some new tax will have to be established, but it is still unclear whether that tax will be paid by employees or employers.

"We know a mandatory benefit is coming in October of 2009, we know how much it will be, but we don't know how or who will pay for it, and we don't know how or who will administer it," explains Kris Teft, general legal counsel for the Association of Washington Business (AWB).

AWB lobbied hard against the act, as did myriad business groups, including the Alliance of Washington Cities and the National Alliance for Small Business. They believe the Act will disproportionately harm small businesses. Unlike current family leave legislation, which exempts companies with fewer than 50 employees, the Paid Family Leave Act applies to all companies.

"The [current] state and federal family leave acts exempt small employers for good reason: because small companies can't afford to lose key workers or a large percentage of their workforce for up to five weeks, because such costs (both direct and indirect) might put them out of business," the Greater Marysville Tulalip Chamber of Commerce argued in a brief to the Legislature.

Overlapping laws regarding family leave make the issue particularly troublesome. AWB's Teft points out that family leave is now regulated by a federal family leave law, two state laws and the Human Rights Commission's maternity disability regulation. "What you see is this patchwork quilt of state and federal leave laws, not all of which operate consistently," he says.

Conflicting laws

The new state law grants leave to domestic partners, including gay couples, while the federal law does not. Federal law allows employers to require employees to use up their paid time off when taking family leave; the state law does not. Then there are the Americans with Disabilities Act and the Washington Law Against Discrimination, which allow employers to offer paid or unpaid leave as a reasonable accommodation when employees need to take leave. The new state law does not offer this option.

Steve Peltin, an attorney practicing employment law in Seattle at K&L Gates, says the tendency is for courts to rule in favor of the laws that are most generous to employees. Peltin says the rules, as they now stand, create the potential for double-dipping among employees. Employees could get the $250 a week mandated by the new law on top of vacation pay or sick leave. "You have the potential situation where an employee might get more than 100 percent of their regular pay (while on leave)," says Peltin. "People who might otherwise decide to stay might choose to leave. I can see some hardships for small businesses."

Many mothers-to-be are happy with the legislation. "I think it's great; it's just too bad I won't be able to take advantage of it," says Michelle Elder, who works in the clerical department for a large Spokane-based hiring agency. She won't be able to take advantage of the bill because her first child is due in September, before the law takes effect, but she hopes to use it for family leave the next time.