Paid FMLA Has Steep Price Tag

Job creators in Connecticut have cautioned state lawmakers that a paid family leave mandate will come at a high cost to the state, employees, employers and taxpayers. 

The legislature’s nonpartisan budget office confirms, saying setting up and running a new paid FMLA program would cost at least $23 million over the first two years.

It’s a significant cost at a time when lawmakers are desperately trying save other programs during the state’s budget crisis.

It also could be the tip of the iceberg—Washington State considered and abandoned a similar program because it was projected to cost their taxpayers $1.2 billion in its first two years.

And Connecticut’s Department of Labor has compared the potential task of running a paid FMLA to that of the state’s unemployment compensation system.

Under HB 6932, employees of businesses with two or more employees would have to deduct part of their wages to fund a program allowing them to use paid leave for up to three months each year, at 100% of their pay, to care for their own or a family member’s illness or injury. 

Beyond the massive fiscal note to be borne by taxpayers for the cost of new state personnel and infrastructure needed to run the program, state law would require businesses to continue to provide non-wage benefits to employees absent from the workplace. 

In other words, businesses are on the hook to pay their portion of absent employees’ healthcare costs, as well as allow for the continued accumulation of vacation and other leave. 

Despite being able to use leave if needed, employees won’t necessarily find it a great deal–especially when they see what the state deducts from their paychecks.    

What’s more, there’s no cap on what the state Labor Commissioner could deduct from employees’ pay, but it has to be enough to ensure the sustainability of the program. 

Even if an employee never intends to use the leave, their paycheck will still be tapped by the state. 

With state fiscal projections looking grim not only in the current year, but also in the next few years, now is not the time to be implementing a massive new state entitlement program. 

Lawmakers should make the only sensible choice there is to make on HB 6932 reject it outright and demonstrate to Connecticut citizens that they are serious about improving Connecticut’s economy and making Connecticut a better place to run a business. 

For more information, contact CBIA’s Eric Gjede at 860.244.1931 | eric.gjede@cbia.com | @egjede