Parental-leave bill alarms business. But supporters see it as offering a minimum in needed coverage

By early next year, parental leave may be a federal guarantee in the United States. Not just for parents of new babies, but for those with newly adopted or foster children, and for workers with family members who are seriously ill. After three years of intense debate, the House Labor Committee approved a measure late last month that would require employers to give time off without pay for workers with a serious illness, with newborn or adopted children, or with children or parents in need of care.

A similar measure is pending in the Senate. The full House is expected to pass a corresponding bill next session.

But the bill has angered a broad range of business trade associations, which find it unacceptable. ``We're going to put some major hurdles in the way of its passage,'' says Virginia Lamp Thomas, a labor relations lawyer at the US Chamber of Commerce, a private-sector trade association.

The chamber, which, along with the National Federation of Independent Business, is the chief opponent of the federal mandate, contends that if the government begins to require these benefits, companies are going to have to restructure their benefits pie. They can't afford to just expand that pie, Mrs. Thomas says.

For those supporting the original Family and Parental Leave Act - introduced by Rep. Patricia Schroeder (D) of Colorado - the House's compromise still only ``sets a minimum labor standard.''

``It exempts 95 percent of American businesses, and covers only 44 percent of the work force,'' says Julie Devaud, a specialist in public policy on maternity leave at the American Association of University Women.

The final bill would apply only to companies with 50 or more employees for the first three years of the bill. After that time, those with 35 or more employees would also come under the ruling, which says businesses must give workers up to 10 weeks of unpaid leave for either newborn or just-adopted children.

Employers would also have to give workers 10 weeks off to care for a seriously ill child or parent, or as many as 15 weeks for a worker's own serious illness. None of this would be paid leave, and employees who wanted to take advantage of the policy must have worked at least a year.

Only about 5 percent of American companies have more than 50 employees, contends Donna Lenhoff, associate director of the Women's Legal Defense Fund in Washington. Using figures from the US Census Bureau's last annual report on County Business Patterns, she estimates that the other 95 percent employ 56 percent of the work force.

Still, ``you have to walk before you can run,'' Ms. Lenhoff says. The House Committee's measure is a good step forward in the fight to protect employees, especially women, from losing their benefits or their jobs while on leave, she adds. It also advances the concept of time off for family-related illnesses.

Unlike the US, most European countries already require both medical and parental leave. And to try to alleviate severe employee shortages, for example, about two dozen British companies have voluntarily adopted ``career-break plans,'' that allow women in professional and managerial positions to leave work to raise their children, for up to five years, without loss of pay, seniority, or status. They stay in touch with their employers by working a few weeks a year.

But while many major US companies have put some form of parental-leave program in place, the bill's supporters say many others, especially small companies, have nothing. Almost all policies are unpaid, and sick or disability leave policies are rare.

In fact, a study by the University of Michigan's Institute for Social Research estimates that women lose about $255 million in forgone wages each year for taking pregnancy or maternity leaves. According to the study, women who leave their jobs to care for a newborn or adopted child without the protection of parental leave are forced to find new, and most often lower-paying, jobs.

Supporters of the proposal say the US must meet the needs of this segment of its labor pool. US labor statistics predict that women will account for most of the labor force growth in the next 10 to 15 years.

Even the bill's opponents recognize that the only way companies will be able to hire and retain good-quality employees is to offer these minimum standards, says Terry Hill, spokesman at the National Federation of Independent Business.

But Mr. Hill says that ``we encourage businesses to offer these types of benefits when they can afford them.'' They do about ``40 percent of the time,'' he says. But the NFIB, as well as major corporations, opposes any type of government mandate that takes away the ability of employers to negotiate with their employees.

If the bill doesn't pass Congress next year, says Ms. Devaud at the American Association of University Women, ``it is very shortsighted of the business community,'' especially in light of the changing work force, with its child-care crisis.

More than 56 percent of American women who are married and have children under a year old are working today, according to US Bureau of Labor statistics. That is more than double what it was in 1970. Yet more than 60 percent of those working mothers have no maternity leave, paid or unpaid.

The US Chamber of Commerce contends that the Federal Pregnancy Discrimination Act of 1978, which requires all employers to treat pregnant working women the same as disabled workers, already covers 57 percent of those women.

The chamber estimates the additional cost of the Parental Leave Act would be at least $2.6 billion a year. The congressional General Accounting Office estimates the law would cost no more than $500 million a year, a figure that ``ignores the reality of the workplace,'' says Thomas at the chamber.

The GAO's estimate neglects costs like lost productivity and unemployment compensation for replacement workers laid off when the new parent returns to work, Hill at the NFIB says.

To answer claims that such a policy would place an unfair burden on small companies, the bill calls for a study within two years to examine its potential effect on employers with fewer than 50 workers.

While federal parental-leave legislation proceeds sluggishly, states are generating their own leave laws. Already, 11 states have more-generous bills than the congressional compromise, and 28 others are working on parental-leave laws.