Questions Surround Paid FMLA Proposals’ Costs, Actual Benefits

Two paid family and medical leave proposals are raising questions about the real implementation costs and the actual guaranteed benefits for workers.
While SB 1 and HB 5387—introduced by Senate and House Democrats—are packaged with good intentions, both bills are drafted in a way that hides their actual implementation costs.

The new paid FMLA mandates apply to any business with at least two employees.
An analysis of a similar proposal that was rejected last year revealed paid FMLA would cost Connecticut taxpayers $13.6 million to implement and $18.6 million in annual administrative costs.
In addition, while advocates for this year’s proposals say businesses have a “moral responsibility” to provide paid leave, both bills exempt state and municipal governments.

Actual Costs Clouded

The proposals delay the implementation of paid FMLA with a provision that the state Department of Labor won’t accept program contributions until 2020, with benefits delayed until 2021.
Both bills require analysis through fiscal notes to determine overall costs. Delaying implementation beyond the two-year forecast range of a fiscal note obscures the overall actual costs of paid FMLA.
The legislature’s Labor and Public Employees Committee held a hearing on both FMLA proposals March 8.
That hearing also featured other rejected proposals from the 2017 legislative session that add costs and complications to Connecticut’s workplaces, further destabilizing the state’s weak job recovery.
SB 1 and HB 5387 require employees to pay a percentage of their wages to the state for deposit into a fund.
Under the proposals, the fund then covers employees with up to 12 weeks of paid leave at 100% of their pay, capped at $1,000 per week.

Shaky Math, Uncertain Benefits

Proponents have long argued that only 0.5% of a worker’s pay will be needed to fund this new program.
But as CBIA has pointed out, this means a person earning $52,000 a year would only contribute $260 per year into the fund, yet would be eligible to take out $12,000 each year.
By that accounting, the paid FMLA fund would be insolvent almost immediately.

However, the bills' sponsors have an answer: If the Labor Department determines there isn't enough money in the fund, it will then just cut weekly benefits to workers.
That means while employees will be forced to pay into this fund, there's no guarantee as to what actual paid benefits they will receive.

Redefining 'Family'

A final highlight of these proposals is that they take the "family" out of the Family Medical Leave Act.
While past proposals allowed the use of FMLA for extended family members, including grandparents and grandchildren, this year's proposals allow leave for "anyone close to you related by blood, or whose close association . . . is equivalent of a family member."
It appears these proposals set up employers for legal battles over how close their employee is to the sick person for whom they want to take leave. What defines someone who is "close" to you?
The General Assembly must debate legislation based on its merits and true costs and benefits.

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For more information, contact CBIA's Eric Gjede (860.480.1784) | @egjede