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The Parent Trap

Let parents stay home to care for a newborn-and pay them for it? The debate rages on over employee rights.

This story appears in the April 2000 issue of Entrepreneur. Subscribe »

The Department of Labor (DOL) will have to make some changes to its proposed "newborn leave with pay" program if it expects Republicans in Congress to let it go through. The GOP expressed strong opposition after groups such as the U.S. Chamber of Commerce and the National Association of Manufacturers raised a ruckus. They object to employers having to continue to pay the salaries of employees who voluntarily leave their job, albeit temporarily, to care for a newborn or just-adopted child.

Backed by President Clinton, the proposal would allow states to set up this program using unemployment insurance (UI) funds. States would have the discretion to determine the length of the leave, the level of pay for parents and a way to finance the program. Chances are good states would simply increase existing UI taxes for employers whose employees take advantage of that leave, according to Rich Hobbie, director of unemployment insurance for the Interstate Conference of Employment Security Agencies (the state UI agencies) in Washington, DC. UI taxes are currently "experience" rated, with a company's rate dependent on the number of workers it laid off in the past year. Newborn leave taxes are expected to work much the same way.

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