HARTFORD, CT — (Updated 11:55 a.m.) Creating a paid Family and Medical Leave Trust Fund is the number one priority for the Senate Democratic caucus this year, but it will cost employees who contribute to the fund.
The nonpartisan Office of Fiscal Analysis estimates that implementing a paid Family and Medical Leave system will require the Department of Labor to hire additional staff to oversee compliance with the program.
The $13.6 million in costs won’t kick in until the second year of the budget when the state is required to start collecting employee contributions. Annually, starting in 2020, it will cost the state $18.6 million to operate the program, according to a fiscal note from the Office of Fiscal Analysis.
Those costs will be covered by contributions to the Family Medical Leave Trust Fund and won’t necessarily be paid by the state after the first year of the program. However, the legislation and the fiscal note aren’t clear where the startup costs would come from.
“The bill specifies the costs of administering the FMLC program are to be covered by the FMLC Trust Fund, which receives revenue from employee contributions as determined by the Labor Commissioner. However, no contributions to the FMLC Trust Fund are anticipated to be collected before July 1, 2019. Consequently, it is assumed the General Fund will cover the costs of the program until such time that FMLC Trust Fund revenues are sufficient,” the fiscal note states.
Proponents of the program say that Connecticut would begin to see savings in the budget as a result of this program because it reduces the reliance on public assistance.
“Without paid leave, over 40 percent of new moms either quit or are let go from their jobs after having a new child,” Carlos Moreno, a spokesman for the Working Families Party, said. “About 15 percent of that group have to go on public assistance to cover bills, healthcare and food.”
Opponents, like the Connecticut Business and Industry Association, argue that $18.6 million is a huge price to pay for a program. At the same time it argues if that’s not enough to convince lawmakers to end discussion then the state’s lackluster job recovery should prove that it’s not time for new mandates on businesses.
However, businesses aren’t being asked to contribute to the trust fund. The cost of the program will be paid by employee contributions, but the state may have to cover some of the start up fees.
The bill would require employers with more than two employees to contribute a portion of their weekly pay to the trust fund. The size of that contribution has not yet been determined. Employees would then be allowed to take up to 12 weeks a year of paid leave at 100 percent of their salary capped at $1,000 per week to take care of a family member or themselves.
Legislative analysts estimate that 1,587,400 employees would be covered by the proposal.
This is the third year the legislation has been introduced and a coalition created to promote the issue maintained that they will be able to find the support in a General Assembly, which has seen its Democratic majorities shrink over the past five years.
They say early research from states like California, New Jersey, and Rhode Island show the program is working and helping both families and employers.
A U.S. Department of Labor survey of the Rhode Island program, which was fully implemented in 2015, found “no evidence that the law had any significant effects” on worker productivity and other work-related activities.
In California, 10 years after the law took effect, a U.S. Department of Labor survey concluded that it “has not caused major problems for California employers. The vast majority (roughly 90 percent) report positive effects or no effects in terms of productivity, profitably, retention, and morale. Small employers, if anything, report fewer problems than large firms.”
A 2012 survey of the California law, found that fewer than 10 percent of employers reported problems with productivity, absenteeism, turnover, profitability, career advancement, or morale; small employers were less likely to report problems than were large employers.
California passed its law in 2004 and New Jersey passed its law in 2009.
A survey by the New Jersey Business and Industry Association in 2012 found that 62.5 percent of large businesses and 53.4 percent of small businesses had no problem adjusting to the program. The same survey found increased administrative costs and overtime pay for those businesses after the New Jersey law was implemented in 2009.
Proponents argue that in order to stay competitive Connecticut needs to adopt a paid Family and Medical Leave program. New York passed paid leave in 2016 and Massachusetts is debating legislation this year.
A recent poll commissioned by the U.S. Council of State Chambers of Commerce found that 72 percent of C-level executives and business owners support increasing parental leave, which would be covered under Connecticut’s legislation.
This year, proponents of the legislation are doubling down on their chances by introducing both a House and Senate version of the bill. Both versions were approved by the Labor and Public Employees Committee by a 7-6 vote.
The Connecticut Business and Industry Association continues to oppose the legislation. During the public hearing on the bill, Eric Gjede, counsel for the CBIA, said 54 percent of its membership has added additional flexibility to their leave policies in the last five years to accommodate employees.
He said CBIA is opposed to this bill because of the massive costs such proposals have — particularly on Connecticut’s smallest businesses.
The Working Families Party points to a recent survey that found 38 percent of millennial workers stating they would move not just to another state, but another country in order to find better family and medical leave.
They say research shows small businesses actually support the proposal.
Editor’s note: An earlier version of this story failed to make it clear that the administrative costs of the program would also be covered by contributions to the trust fund.