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Annapolis Summit: Paid sick leave, retirement measures back again

(The Daily Record / Maximilian Franz)

(The Daily Record / Maximilian Franz)

Proponents of a mandatory paid sick leave bill will head to Annapolis in January hoping this is the year the General Assembly passes the measure.

The issue – along with a measure to create a state-run retirement option for private-sector workers — is one of two controversial bills likely to make a return appearance.

While proponents of the sick leave bill, including some legislative leaders, believe lawmakers will eventually pass the measure, there is a question about whether a compromise can be reached with the measure’s opponents and, if so, whether it would be too watered down for supporters.

Melissa Broome (file)

Melissa Broome (file)

“This is probably the premier issue this legislative session,” said Melissa Broome, deputy director of Baltimore-based Job Opportunities Task Force, a prime backer of the effort through a 144-member coalition known as Working Matters.

Broome and other supporters are hoping this year will be the year for the bill, which has hit legislative roadblocks in each of the last two sessions.

“What we’re told by legislators is that it’s not a matter of if but a matter of when,” Broome said of the future prospects of the bill. “This is one whose time has come, for sure.”

Last year, House Economic Matters Chairman Dereck C. Davis, D-Prince George’s County, and Senate Finance Committee Chairman Sen. Thomas M. “Mac” Middleton, D-Charles County, sent a letter to supporters and opponents late in the session asking both sides to work out differences in hopes that a compromise bill could return in the 2016 session.

“The bill was so prescriptive,” Middleton said. “It garnered a lot of opposition.”

Sen. Mac Middleton (file)

Sen. Mac Middleton (file)

Under the bill, businesses with 10 or more employees would be required to offer paid sick leave at the rate of 1 hour for every 30 worked. The leave would begin accruing immediately when an employee is hired, and the worker would be eligible to take the leave after 90 days of employment.

For businesses with less than 10 employees — a category that Broome says covers about 70 percent of employers in the state — workers would be eligible to accrue unpaid sick leave.

Middleton said he personally supports the effort to provide some protected leave but that any law should be limited to sick time and be flexible enough to take into account what employers already provide.

“It can’t be one size fits all,” Middleton said, adding that there is a concern supporters of the bill won’t want to compromise because of a fear of passing “a watered-down bill.”

Broome said the coalition has attempted to find common ground with opponents, inviting about two dozen foes of the bill to a series of meetings over two days. She declined to say how many groups actually met with the coalition but said that changes to the bill would be forthcoming.

“We’re trying to make the bill as flexible as we can and that’s what the changes will reflect,” Broome said.

Broome added that there would be an effort to streamline and reduce the size of the bill, which was about 20 pages last session.

Possible changes

Broome declined to elaborate on specific changes, but she said there would be some effort to address concerns of employers who already provide some form of leave. The change could be similar to one discussed in November.

The first amendment proposed last month would exempt businesses from modifying their existing practices if their paid sick leave policy is at least equivalent to the proposed state law. The language is similar to that found in law in Washington, D.C.

A second, based on language of legislation recently passed in Montgomery County, would allow businesses to forgo allowing employees to roll over sick days if the employer makes all seven days of leave available on Jan. 1 of each year.

But neither addresses the biggest concern – a fresh government mandate.

Deriece Pate Bennett, chief lobbyist for the Maryland Chamber of Commerce, said the organization has been opposed to past efforts but attended meetings with the Working Matters Coalition last month in an effort to find some common ground.

“The devil’s in the details,” Pate Bennett said. “We don’t know what changes will look like.”

Pate Bennett said the chamber deconstructed the 20-page bill earlier this year and developed a five-page list of concerns.

“Some of the proposals will take some of our concerns into account,” she said.

But one deal breaker is the mandate.

Kathy Snyder (file)

Kathy Snyder (file)

Kathy Snyder, the chamber’s interim president, said requiring sick leave and reporting can affect a business’s decision to locate or expand in Maryland and come at a time when Gov. Larry Hogan and the General Assembly’s Augustine Commission are working to make the state more competitive and business-friendly.

“We know that these mandates are hurting employers here as much as anything,” Snyder said. “It makes it harder for businesses to expand here, and when you start these mandates on employers, it raises the cost of doing business here at a time when we are trying to be more competitive.”

In the end, Middleton said, it will be incumbent upon him and others, including the sponsors of the bill, to bring both sides together to mediate a compromise package.

“The bill is real, real controversial but I think it can be done if the right people are involved and if all sides are willing to prioritize it,” Middleton said.

Retirement plan

Also on the agenda will be the likely return of a debate over whether Maryland should require businesses to offer employees a retirement plan or automatically move workers into a state-managed system.

In September, House Speaker Michael E. Busch and Senate President Thomas V. Mike Miller reconstituted a task force to look at the issue. The group has only met once — effectively an organizational meeting and briefing on the issues similar to what was covered by a similar group appointed a year ago by then Gov. Martin O’Malley.

The new panel is expected to make recommendations for legislation for the coming session but won’t likely meet again until January.

Sen. James C. Rosapepe, D-Prince George’s and Anne Arundel counties and a leading proponent of the retirement requirement in Maryland, said he is confident another bill will be introduced early next year.

“I am hopeful that people will want to do something fairly significant,” Rosapepe said.

As many as one million Maryland residents do not have adequate retirement savings, according to one review.

Proponents say there is a potential for those residents to become a drag on social services and drive up the cost of government once they reach retirement.

The proposed solution is not a new one.

Bills attempting to create a retirement system for private-sector employees date back to 2006. Over the last two years, similar legislation has been sponsored in the House and Senate that would require companies with five or more employees to offer workers a qualified retirement savings plan or participate in a state-administered retirement system. Employees would be automatically enrolled for a 3 percent payroll deduction. Workers would have to opt out of the plan if they did not wish to participate, and employers would not be required to contribute but could do so voluntarily.

‘Flush with options’

Pate Bennett, the chamber of commerce lobbyist, said the effort would place another mandate on small businesses already swamped with government reporting requirements.

“We feel that the market is flush with options and that people who want to set up a retirement account can do so,” she said.

But questions about state liability for plans it would manage or concerns about federal regulations governing retirement systems have derailed those attempts over the last nine years.

Last month, U.S. Department of Labor Sec. Thomas E. Perez, another strong proponent of the retirement security effort and a potential Democratic gubernatorial candidate in 2018, released proposed regulations to eliminate the potential barriers within the federal Employee Retirement Income Security Act.

“I don’t think they’re game-changers,” Rosapepe said. “I don’t think we needed them but I do think they are helpful and will help more people become comfortable with the idea. It’s great to have the Department of Labor promote action on this issue.”

Not everyone is convinced that the federal regulations resolve any concerns.

“I think there are still just too many questions, and the idea that there’s been a fix on ERISA is suspect,” said Sen. Andrew Serafini, R-Western Maryland and a member of the legislative panel on retirement security. “This was tried at the federal level and they weren’t able to get anything done. What is it that we know at the state level that they don’t know?”

Next week in the Annapolis Summit series: Transportation issues.