Spurred by testimony from dozens of people – including a fellow legislator — helped by paid medical leave, 12 Connecticut lawmakers are co-sponsoring a bill that would mandate employers to pay workers who go on medical or family leave.
But state business groups are opposed to such a bill saying it would place an undue burden on small businesses.
Senate Bill 221 recently passed the Labor and Public Employees Committee by a 9-4 vote and has now been referred to the General Assembly offices of Legislative Research and Fiscal Analysis.
Rep. Rosa DeLauro (D-New Haven) was among the more than 100 individuals who submitted testimony in support or in opposition to the committee and shared her personal experience with paid medical leave, stating that she was very lucky to have it during her fight with ovarian cancer in 1986.
“Paid leave helped me get through that difficult time in my life,” she said in a statement. “But many families are not nearly as fortunate. Too many working families today are in jobs that do not pay them enough to live on, do not provide paid leave and leave too many families one crisis away from disaster.”
DeLauro’s testimony was supported by dozens of others citing moral and financial justifications for the bill as well as the “shameful” status of the U.S. as one of only two countries in the world without paid maternity leave.
Under the bill, Connecticut’s program would offer up to 12 weeks of paid family and medical leave during a 12-month period and would provide 100 percent wage replacement up to $1,000 per week. Coverage would extend to employers of two or more workers and, in order to qualify for benefits, an employee must earn at least $9,300 over 12 consecutive months.
The bill is a departure from current laws under the federal and state Family and Medical Leave Acts (FMLAs).
Currently, the federal FMLA allows up to 12 weeks of unpaid leave per 12-month period, while the state FMLA allows up to 16 weeks of unpaid leave per 24-month period or 24 weeks if you are a state employee. The federal law applies to workplaces of more than 50 employees, while the state law requires more than 75 employees.
The proposed bill would also expand the scope of medical leave beyond the individual and immediate family to include grandparents, grandchildren and siblings.
According to a report by the Institute for Women’s Policy Research, which was contracted by the Department of Labor, the program would cost approximately $462 million per year to implement. There would be no cost to employers, though, because the program would be funded by a 0.54 percent payroll tax on all wages and bonuses.
“If the program were funded according to the sliding scale premium formula, the costs of benefits and administration would not exceed the program’s income and it would be sustainable,” according to the report.
But regional and local business organizations are not convinced, and are opposing the bill suggesting it is unsustainable.
According to Lisa Zaccardelli, a partner with the Hartford law firm Hinckley Allen’s labor and employment group, job protection is a component of the bill that could carry significant implications for small-business owners. The program may entitle employees to job protection, requiring that their jobs be made available to them after their leave. This could prove burdensome for small businesses that may not have the resources to find temporary help.
The Connecticut Business and Industry Association (CBIA), the state’s largest business organization, takes particular exception to the Institute for Women’s Policy claim that the program would be sustainable.
In testimony to the Labor Committee, Eric W. Gjede, assistant counsel for the CBIA, argued the proposed bill is an inflexible “one size fits all” mandate that will hurt Connecticut businesses.
“This tilts the playing field against Connecticut businesses to other states — typically ones that are not forcing such mandates on their businesses,” he said in a statement. “This is why more than 70 of Connecticut’s leading business organizations and chambers of commerce sent lawmakers a letter this past January urging rejection of this very concept.”
He argued that the estimate of a 0.5 percent payroll tax to fund the program was “absurd.”
“That would mean an employee earning $52,000 a year would need only contribute $260 a year to the program, yet would be able to collect $12,000 each year,” he said. “At this rate, this program will be financially unsustainable from the day it’s implemented.”
He said the program would be costly for the state and taxpayers as the Labor Department has neither the staff nor tech infrastructure to handle the new program.
For employers, Gjede said the program would be costly since it would require them to maintain a job for an employee who is absent up to 12 weeks each year, as well as continue to pay for that employee’s nonwage benefits.
“For most small businesses, it is financially impossible to do what this bill asks of them,” he said.
Zaccardelli said many small businesses would not have the manpower or resources to quickly fill positions left open while employees are on leave and would have other employees to pick up the slack instead of temporary employees.
Gjede said the CBIA is not opposed to employers voluntarily adopting paid family and medical leave programs that are affordable and work for both the employer and employees, and cited CBIA membership surveys showing the majority of member businesses have been moving toward more flexible workplaces over the last five years.
“Many businesses are already offering flexible work hours or options like telecommuting. These developments, which are growing popular with employers and employees alike, are happening organically — not by government fiat,” he said. “We urge you to reject the mandate found in SB 221, and to pursue policies that will incentivize businesses to continue adopting their own innovative paid leave programs.”