By ADAM SICHKO
The Albany Business Review

At his Merriam Insurance Agency in Schenectady, Brian Merriam started long-term disability coverage for his 20 employees earlier this year, footing half the bill.

It's a $1,200 investment he probably wouldn't have made, Merriam said, had he faced a state mandate to provide 12 weeks of paid family leave for employees to bond with a newborn child or tend to sick family members.

That's the aim of three pieces of legislation awaiting a vote in the state Senate. A final hearing on the bills was held last week.

The leading candidate is a proposal from Gov. Eliot Spitzer - and it particularly worries businesses.

Federal law mandates that employers provide 12 weeks of unpaid family leave if they have more than 50 employees.

But Spitzer's proposal requires paid leave at all businesses.

The Democratic-controlled Assembly passed a near copy of Spitzer's plan in June, with Republicans split on the issue. Supporters are pushing for a Senate vote, but the issue wasn't touched during a special one-day session on Oct. 22.

The potential impact of such a law on small businesses is clear to Merriam.

"One, that takes away our flexibility to help those with the greatest need. Two, we can't offer as many benefits as we offer. Three, we can't hire as many people."

Factors such as growing numbers of single working mothers have made paid family-leave legislation more popular around the country.

To date, though, it's been enacted in just two states. California was first in 2002, mandating that all employers allot six weeks per year. This May, Washington joined on, requiring all employers to offer five weeks of paid leave.

By comparison, leading proposals in New York call for 12 weeks of paid leave, but with smaller compensation than what's offered in the two West Coast states.

A Senate vote seems doubtful this late in the year. The Senate labor committee is still reviewing the three bills, and they could be scrapped for a new bill that creates more consensus, said committee director Joe Erdman.

Senate Democratic Leader Malcolm Smith said paid leave would provide businesses with predictability.

"I'd much rather know that this employee's gone for 12 (weeks). I can plan and manage around that," said Smith, a real estate developer. "That killed me on some days, knowing there's somebody you depend on" taking random days of unpaid leave, he said.

Some business owners said they work with employees on a case-by-case basis to adjust work schedules and arrange time off when family needs arise. Many said paid leave would encourage workers to take time off.

"You want to (help), because a happy and productive staff is critical to us, and just as a human being, you want to help," said Peter Elitzer, president of Peter Harris Clothes, a Latham-based discount retail chain with about 300 employees, mostly part-time.

Supporters argue that under the current system, employees face a cruel decision on whether to miss out on daily wages to care for a newborn or sick relative.

"I don't think businesses are doing enough. I believe they can do more," said Sen. Neil Breslin, D-Albany.

"It would be a wet blanket on future employment in New York state," Roger Hannay of Hannay Reels said of the paid-leave proposals, which he calls "just another bit of creeping socialism."

Spitzer's proposal calls for paid leave to be funded through the state's temporary-disability insurance program, a system that employers and employees contribute to. The legislation permits employers to take an extra 45 cents per week from each worker's paycheck for the benefit.

Business interests contend that the costs of the program are unknown. They say it's difficult to predict how many employees would use the new benefit and what other costs would crop up, such as the hiring and training of replacement workers.

An employee would not be paid standard wages when gone, getting no more than $170 or $380 per week, depending on which bill the Senate adopts, if any. Advocates in New York said they want to use future legislation to increase the proposed pay levels.

"Who's to say what's next? Twenty-six weeks? Fifty-two weeks?" asked Hannay. "Where's it stop?"

Not soon, it seems. Both sides expect the issue to resurface next year.

"Sometimes, (businesses) see the worst in everything," Republican Sen. Thomas Morahan said recently on his TV show. "They're like Chicken Little: ‘The sky's falling.' Once it's passed, people will feel a whole lot better about it."