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4/17/05 LAW Proposed changes to the Family and Medical Leave Act by the Bush administration have alarmed workplace advocates. Enacted in 1993, the law allows US employees at companies with 50 or more workers to take up to 12 weeks unpaid leave for family or medical matters like taking care of a newborn, or helping an ill relative, parent or spouse. However, proposed changes in the rules governing the law have led to protests by some groups. The changes focus on the definition of a serious illness under the law, as well as employers' requests for permission to contact doctors to check whether claims of a chronic illness are valid. Last week, opponents of the changes, which are due out this spring, protested during a press conference in Washington, D.C. ''Opponents would prefer not to have the FMLA at all,'' said Debra Ness, the president of the National Partnership for Women & Families in Washington. ''This opposition is just one way of rolling back protections and undermining the law or minimizing its availability to workers.'' She said companies would like to reduce the minimum amount of intermittent leave that a worker can take to four hours. Ness believes this could harm people who only need to be away an hour or two because they would no longer be eligible for the leave. Employers are also seeking to restrict the definition of a serious illness to a medical condition that requires at least 10 days recovery time. Ness objects. ''What if someone is struck by appendicitis and is ready to go back to work within a week?'' she said. ''Why should they be forced to stay out 10 days when they don't have to?'' Currently, workers can invoke the FMLA when seeking medical care for chronic conditions such as chemotherapy for some forms of cancer and kidney dialysis. They can also interrupt their workday to seek such treatments. Companies want to change that. They've asked the Labor Department to tighten the law's definition of serious health conditions. Employers maintain some workers are using these short leaves to make up the sick days or vacation time they have already used. Companies also contend that some of the health conditions are minor, and do not require two or three days' off. Lastly, they argue the changes they are seeking would not affect workers' ability to take time off for serious maladies or to assist sick relatives. Their complaints come on the heels of efforts by unions and other workplace advocates who support proposals that would expand the leave law to include companies with at least 25 workers. Workplace advocates are also pushing to tap state unemployment insurance or temporary disability insurance funds around the country to make leave available to all employees, including the working poor. Those efforts are not likely to be approved by a Republican-controlled Congress, however. Democrats have been fighting to increase protections at small companies and expand the bill's coverage to include the families of soldiers serving in Iraq or Afghanistan. Ness said more than 50 million have invoked the FMLA since it was enacted and 40 percent were men who used it to take time off to care for themselves or care for elderly parents. Jodi Grant, director of work and family programs at the National Partnership for Women & Families, said some states have expanded coverage to include companies with less than 50 workers. In Massachusetts, employees who need to take a few hours off can rely on the Small Necessities Act. Vermont has a similar law. And, in California, which has a paid family leave program, some 13 million people are covered. One drawback, however, is that workers who rely on the California provision are not guaranteed job protection. HEALTH US employers are finding ways to encourage workers to eat right, stop smoking, exercise and reduce medical costs. According to a survey by benefits firm, Watson Wyatt, 38 percent of 555 employers said their healthcare costs for 2004 were lower than what they'd originally budgeted. One reason for the decrease: more health management programs. Employers are embracing these programs and so are their employees. ''Disease management'' includes programs that encourage workers to take better care of themselves. That means eating less fat, sweets and unhealthy foods, exercising, and tracking medications to determine whether there are less costly generic brands. Of those polled, 69 percent promoted disease management among their workers last year, up from 34.5 percent in 2003. ''Similarly, the number of employers adopting lifestyle behavior change through a health plan doubled to 40 percent this year,'' Watson Wyatt said. The firm noted employers that are doing the best job controlling their costs are focusing more on health and disease management than cutting coverage. ''Programs that focus on managing specific diseases and help workers make lifestyle behavior changes aimed at weight management, exercise, and smoking cessation can go a long way toward slowing rising costs over the long term,'' said Helen Darling, president of the National Business Group on Health. That doesn't mean the cost of medical care has dropped sharply. According to Watson Wyatt, employers can expect to see prices increase 10 percent in 2005. By contrast, costs increased 12 percent in 2004. EXECUTIVE SUITE The median annual bonus for chief executives in the United States rose 20 percent to $1.5 million in 2004, according to a survey by Mercer, the management consulting firm. It is an increase that appears to correlate with a median annual increase in net income of 23 percent among the more than 100 US firms studied. Mercer's research revealed that median total compensation, which includes base salaries, bonuses, and current value of long-term incentives, increased 17.1 percent to $7 million last year. In all, the firms' shareholders realized a return of 17.4 percent last year. At the same time, the report published by Mercer and The Wall Street Journal, showed that chief executives' salaries were relatively flat last year, rising by 3.7 percent to a median of $975,000 in 2004. Just over 30 percent of the 112 chief executives polled said they received no increases in their base salaries last year. ''Management and corporate boards have heard and responded to the calls for change in executive compensation,'' said Barry Buck, a senior executive compensation consultant with Mercer in Boston. ''For the last few years, we've seen boards revising compensation programs, adopting new performance metrics, and enacting tougher performance standards - all designed to strengthen the connection between executive pay and company performance.'' The study also revealed that long-term incentives such as stock options were not as prevalent this year. For example, in 2002 stock options represented 76 percent of the long-term incentives offered executives. By 2004, however, stock options represented just 57 percent. ''The declining use of stock options has been driven by two key factors - the new accounting rules that will require the expensing of stock options and ongoing concerns that companies have too much stock tied up in equity compensation programs,'' said Buck. Diane E. Lewis can be reached at .
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