The state legislature's Labor and Public Employees Committee approved two bills March 9 creating a new paid family and medical leave program in Connecticut.

SB 1 and HB 6212, identical bills, were approved along party-line votes. They now go to their respective chambers.

Paid FMLAThe measures were recently revealed in fully drafted form—long after public hearings were held on vague, one-line concept bills.

No explanation was readily available for why the bills now exempt state employees.

However, it could be an effort by proponents to minimize the bills' fiscal impact to the state, suggesting they now understand the cost and burdens it places on employers.

Under the proposals, employees at businesses with two or more workers are eligible for up to 12 weeks of annual paid leave for their own, or a family member’s, illness.

Employees would be entitled to 100% of their wages, capped at $1,000 per week.

While the wage portion of the benefit is funded through payroll deductions, the employer is required to continue providing employees with expensive, non-wage benefits for up to three months, despite their absence from the workplace.

At this stage, no fiscal analysis has been conducted on these bills. Yet we know from previous years that Connecticut taxpayers would pay for the program.

In 2016, the legislature’s nonpartisan budget office pegged the cost at $13 million to launch, and another $18 million annually.

Small Business Impact

This new paid FMLA mandate impacts the smallest businesses in Connecticut, and it’s also a bad deal for employees.

Each pay period, a percentage of an employee’s wages—the amount has yet to be determined—will be deducted to fund a program they may not ever use, or one their coworkers could abuse.

Further, some of money contributed by employees goes toward the program’s $18 million annual cost.

If every employee pays so little to a program that pays out so much, who pays when many workers take leave?
Employees may be better off saving a few dollars extra each pay period on their own, as the paid leave trust fund is likely to be insolvent almost immediately.

This is based on simple math rooted in advocates’ claims that employees would have to contribute only 0.5% of their wages each pay period.

Using that calculation, an employee who makes $52,000 a year only contributes $260 in a year to the program but is eligible for up to $12,000 annually in paid leave.

Who Pays?

That begs the question: If every employee pays so little to a program that could pay them so much, who pays when many workers take a family and medical leave?

A fiscal note with last year’s bill indicated the state expected a large number of people to use this new program.

This could be why this year's paid FMLA bills exclude state employees, leaving the private sector, municipalities, and public and private schools subject to the mandate.

Advocates of this proposal have for years attempted to downplay the massive startup and operating costs and burdens of this program.

The business community hopes lawmakers will realize that pushing this inflexible, one-size-fits-all mandate on Connecticut’s businesses will not encourage them to adopt more flexible work policies.

After all, if state government is going to protect itself from the costs in these bills, perhaps it should do the same for everyone else.

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

Filed Under: Employment Law, FMLA, Wage & Hour

One thought on “Paid FMLA Leaves State Employees Behind

  1. The State’s infatuation with a Paid Family and Medical Leave Act fails to recognize the true impact to businesses and workers, particularly small businesses. Aside from the direct impact to workers who will see yet another payroll deduction, the
    continuation of company paid benefits for up to 12 weeks annually will be a threat to the survival of many small businesses. As far as the payroll deduction, the proposed 0.5 % is just a starting point. If enacted, and claims exceed projections, this will undoubtedly be increased to cover those added costs. The cost to businesses to continue other benefits will be a deal breaker for many businesses.

    As an example; I operate a small business and employ people who work as contracted staff at client firms we serve. If those individuals don’t work we don’t get paid by our clients. We don’t have any other revenue source. It’s not as if we can fill the need and provide services with another employee as the client wants specific individuals with unique skills. Anyone absent for more than two weeks at most runs the risk of losing their job as the client will seek to fill that role from other sources. We provide a
    service to our clients by providing them with support staff; we don’t dictate how they operate. If we don’t provide staff they will go elsewhere and our employees will be out of work permanently.

    We currently pay 90% of health insurance benefit costs for our employees. These costs are recovered as part of our client bill rate, paid to us only if our employees provide service to our client. If we face the threat of having to pay that benefit for up to 3 months, for a non-working period, we will have to reassess how we pay for employee health insurance. We may be forced to increase the employee contribution to provide a cushion to cover potential, non-working periods forced upon us by the new law. This would impact all our employees forcing them to pay more out of pocket for their health insurance; not a prospect we look forward to and certainly not something they will welcome.

    Also how will this new benefit be policed? If someone has a headache on a Friday and decides that they need to stay home from work, will the law cover that situation? I’m thinking we will eliminate all our paid time off intended to cover sick time since it appears that the state will mandate how that is dealt with, not us.

    Another non-business friendly government intrusion on Connecticut businesses and another costly burden on our employees. The state continues to believe that the only way to deal with the continued loss of jobs in the state and rising deficits is to add yet more burden to our businesses and citizens. How can this make any sense at all? I sincerely hope that the legislature and governor wake up; you are the problem not the solution.

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