U.S. Chamber of Commerce Sues to Repeal Family-Leave Regulations

The U.S. Chamber of Commerce on Monday sued the Labor Department, seeking the repeal of new regulations allowing states to offer paid leave to new parents using unemployment benefit dollars.

“They’re putting a fund at risk that was set up for unemployed workers,” chamber Vice President Randy Johnson said. “At some point, a recession is going to hit, and there’s not going to be enough money to provide benefits for unemployed workers and people taking family leave.”

The new federal regulations, ordered by President Clinton and written by the Labor Department this month, would allow states to offer unemployment benefits to parents of newborn or newly adopted children who choose to take as many as 12 weeks of leave guaranteed under the 1993 Family and Medical Leave Act.

Labor Department officials were reviewing the lawsuit and did not immediately comment.

States that want to provide the paid leave would have to pass their own laws to do so. None has yet, but legislators in a number of states are considering the idea.

The Chamber of Commerce is asking the U.S. District Court for the District of Columbia to grant an injunction blocking any state program enacted during judicial proceedings.

The unemployment fund is financed by taxes on businesses.

Some state unemployment insurance programs are flush with cash because the booming economy has more people working than at any time in the last 30 years. In the past, however, the federal government often has had to bail out states as they ran short of money to pay benefits.

The Chamber of Commerce is challenging the new regulations on grounds that they violate federal laws, including one reserving unemployment benefits for those who are actively looking for but cannot find work.