What Are the True Costs of Paid FMLA?

03.04.2016
Issues & Policies

Last week, results of a taxpayer-funded Labor Department study on what it would cost to implement paid family medical leave in Connecticut came back with numbers with a lot more digits than supporters expected.
Conducted by the Institute for Women’s Policy and Research (a pro- paid family leave group), the study found that the program would require hiring 120 new state employees (at $18 million a year in salary and benefits) and more than $13 million in initial startup costs.
These big program costs don’t even include the cost of providing the benefit itself–which is to be funded by deducting from employees’ paychecks.
The study predicts this will cost about $462 million dollars annually–taken directly from employees.
Ever since the idea was proposed two years ago, CBIA has cautioned lawmakers about the state government overhead that would be needed to run it.
While the estimates are pretty high, particularly for a state in our current fiscal condition, actual costs are likely to be even higher than what this pro-paid family and medical leave group reported.
For example, the same program in Washington State was projected to cost about $235 million per biennium.

These big program costs don’t even include the cost of providing the benefit itself--which is to be funded through employee paycheck deductions.

Policymakers in Washington backed off the program when they discovered how expensive it would be.
If you compare the two programs, the Connecticut program is more generous because it allows employees to collect a full 100% of their pay while out on leave.
Advocates also claim a paid family and medical leave mandate would not be a big matter to employers as Rhode Island.
California and New Jersey have somewhat similar TDI programs on their books that have recently been expanded to provide for some family-related leaves.
Of course, what the paid family and medical leave advocates don’t tell you is that there are plenty of problems with these TDI programs too.
In her 2016 budget address, Rhode Island Governor Gina Raimondo said that to make it easier to do business in her state, lawmakers need to "target waste and fraud, especially in our TDI system."
Given the proposed program in Connecticut is to be even richer in benefits than Rhode Island’s TDI program, there is a possibility that we could experience the similar problems.
The paid FMLA bill is a costly risk that Connecticut cannot afford to take.


For more information, contact CBIA’s Eric Gjede (860.244.1931) | @egjede

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