Lamont: 'We Are Going to Pass' Paid FMLA

If there was any doubt that Democrats in the 2019 General Assembly and Gov. Ned Lamont have made passing a mandate for paid Family & Medical Leave a priority, it was removed the other day.

Here is what Lamont told the Republican-American's Paul Hughes:

“We are going to pass paid family leave,” Lamont said. “I’m going to work my heart out to make sure that gets done, and I’m going to do it in the most fiscally responsible way so taxpayers know this is something that is going to be managed in an efficient way going forward.”

Lamont also said he is "exploring" private management of the state's proposed paid FMLA program. 

"If I have somebody who wants to administer this thing and take the financial risk in return for a 10-year contract, that’s the way I like to think about these things,” Lamont said.

​You can read more about the privatization discussion at CTMirror.org, here.

The article also notes that "Negotiations are underway with legislative committee co-chairs and other stakeholders about the variables of such a benefit: How much weeks of wages would be offered? What percentage of wages would be replaced? Who would be eligible? What constitutes a family member?"

These are all red flags that the Waterbury Regional Chamber, CBIA and other business organizations have raised about the paid FMLA bills, Senate bills 001 and 881 (the governor's bill), and House Bill 5003. The bills currently propose paying employees 90% to 100% of their wages, up to $1,000 per week, for 12 weeks of leave. Two of the bills also broadly define "family member" as not just a blood relative but anyone who is "equivalent to a family member." (Emphasis added.) It also imposes the paid FMLA mandate on every company, regardless of size, including sole proprietors.

The CTMirror article notes that the criteria must be set in order for actuaries to determine the program's sustainability.

The bills fund the program via a mandatory 0.5% deduction from all privately employed workers. Given the current parameters of who is eligible for leave and how much they will be reimbursed, CBIA and others have determined that the fund would become insolvent almost immediately, requiring the wage deduction to increase dramatically. No one can opt out, though unionized state workers are exempt from the program.

Given all of this, it is vitally important for business owners to call or email state legislators and tell them how harmful this legislation will be to their business. See my previous blog post about FMLA for all of the local legislators' contact information. 

And here are some talking points:

• Unsustainability: The bills require taking 0.5% of each employee’s salary, which is not enough to sustain the program. An employee earning $52,000 a year would contribute just $260 annually, but could still collect up to $12,000 a year. The bills provide a way for the administrator to increase the amount taken from employee paychecks should the fund become insolvent, which is highly likely.
• Cost to employers: The program is costly for employers, because it requires them to maintain a job for each employee who is absent up to 12 weeks each year, while continuing to pay that employee’s expensive nonwage benefits and while covering the cost of a temporary worker or for overtime to cover for the absent worker.
• Cost to the state: Projected startup costs for the program are $13 million, with ongoing costs of $18 million. The bills allow for bonding up to $20 million for this program. Given the state’s financial crisis, it cannot afford to take on these new costs, and it is unreasonable to ask taxpayers to pay these costs in addition to having their wages garnished.
• Too broad: The bill provides for employees on leave to receive 100% of salary up to $1,000 for 12 weeks. No other state offers such a level of coverage (most stop at 60%). The bill also allows employees to take leave to assist someone who is not a relative, but “is equivalent of a family member.” This definition is too broad and could allow for abuses. You could also mention here the provisions for spouses who work together and for family members of those in the armed forces to receive up to 26 weeks of leave. 

To have the greatest impact, focus on members of the Democratic caucus. Please be respectful, whether calling or writing, but make sure you are as specific as possible about how this program will harm your business.