CONTACTS: Linda Rozett
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Monday, June 26, 2000

U.S. Chamber Sues Labor Department -
Proposal on Paid Parental Leave Unlawful

WASHINGTON, D.C.—The United States Chamber of Commerce today filed suit against the Department of Labor (DOL) for proposing to pay working parents that take a voluntary leave of absence out of the fund established for unemployed workers.

 

"Diverting money from unemployed workers and giving it to parents who take a voluntary leave of absence is unlawful and will slash holes in an important safety net for workers," said Stephen Bokat, National Chamber Litigation Center executive vice president – the legal arm of the U.S. Chamber of Commerce. "Before the Administration undercuts the unemployment insurance fund, there should be a full public debate."

 

The Chamber joined the Labor Policy Association and the Society for Human Resource Management in suing the Department of Labor over the rule. The suit charges the DOL proposal violates the Federal Unemployment Tax Act and the Social Security Act, both of which permit unemployment benefits to be paid to unemployed workers only.

 

Furthermore, the proposal runs counter to the intent of Congress when it established a voluntary, unpaid leave of absence program (the Family and Medical Leave Act) for employees to care for a new or adopted child. Other violations cited in the lawsuit include failure to consider the impact on small businesses under the Regulatory Flexibility Act and procedural violations of the Administrative Procedure Act.

 

"The new parental leave benefits price tag could be as much as $36 billion every year, by some estimates," Bokat said. "States could be forced to increase taxes or reduce benefits for the unemployed to pay that cost."

 

The U.S. Chamber of Commerce is the world’s largest business federation representing more than three million businesses and organizations of every size, sector and region.

 

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