REPORT OF THE FAMILY MEDICAL LEAVE INSURANCE TASKFORCE

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1 REPORT OF THE FAMILY MEDICAL LEAVE INSURANCE TASKFORCE Natasha M. Pierre, Chair SUBMITTED TO THE CONNECTICUT GENERAL ASSEMBLY LABOR AND PUBLIC EMPLOYEES COMMITTEE November 20, 2014

2 Family Medical Leave Insurance Taskforce Members Natasha M. Pierre, JD, MSW, Policy & Legislative Director, the Permanent Commission on the Status of Women and Chair of the Family Medical Leave Insurance Taskforce Marilyn Calderon, M.Ed, Executive Director, Connecticut Parent Power Deborah Chernoff, Public Policy Director, New England Health Care Employees Union, District 1199, SEIU Jennifer C. Devine, Esq., Staff Attorney III, Connecticut Department of Labor Paul M. Dickes, Jr., Chief Union Safety Representative, I.A.M.A.W. Local Lodge 700 Marilyn Douglas, Vice President and Director of Human Resources and Counsel, Petra Construction Corporation Nora L. Duncan, State Director, AARP Connecticut Michelle Gilman, Assistant State Comptroller, Office of the State Comptroller Eric Gjede, Esq., Assistant Counsel, Connecticut Business and Industry Association Edward R. Granfield, President, Oyster River Energy, Inc. Eileen M. Healy Robin Imbrogno, President, the Human Resource Consulting Group Jacqueline Kozin, Legislative Liaison, Office of the State Comptroller Kathleen Ann Marinelli, MD, IBCLC, FABM, Connecticut Children s Medical Center, Division of Neonatology; Chair, United States Breastfeeding Committee; Associate Professor of Pediatrics, University of Connecticut School of Medicine Senator Catherine A. Osten, Connecticut General Assembly Michael P. Regan, G.S. Regan Inc. Representative Richard A. Smith, Connecticut General Assembly Eileen F. Swan, Esq., Representative Peter A. Tercyak, Connecticut General Assembly Janette Hernandez Walker, Human Resources Director, Planned Parenthood of Southern New England, Inc. Kathleen Walsh, Principal Examiner, Connecticut Insurance Department Wendy W. Wanchak, Esq., Attorney, Connecticut Legal Services Staffed by Trinity St., Hartford, CT /

3 Report of the Family Medical Leave Insurance Task Force Submitted to the Connecticut General Assembly Labor and Public Employees Committee TABLE OF CONTENTS EXECUTIVE SUMMARY 1 RATIONALE FOR PROVIDING PAID FAMILY AND MEDICAL LEAVE 2 SUMMARY OF FAMILY AND MEDICAL LEAVE PROGRAMS. 8 DETAILED DESCRIPTION OF THE TASKFORCE S RECOMMENDED BENEFIT PROGRAM. 11 TASKFORCE COMPOSITION AND PROCESS Appendix A ESTIMATED EMPLOYEE COST IN CONNECTICUT..... Appendix B PUBLIC COMMENTS Appendix C EXECUTIVE SUMMARY Charge The Taskforce was created by Special Act of the 2013 Legislative Session of the Connecticut General Assembly, included in Appendix A, to study the feasibility of establishing an insurance program to provide short-term benefits to workers who are unable to work due to (1) pregnancy or the birth of a child, (2) a non-work related illness or injury, or (3) the need to care for a seriously ill child, spouse or parent. The composition of the 23-member taskforce was set by the Legislature to cover a broad range of perspectives. The designations, membership, and process are included in Appendix A. Taskforce members were encouraged to provide speakers, materials, and any other relevant information to further the discussion and formulation of recommendations. Additionally, members of the general public were provided the opportunity to express their views and opinions during the public comment period of each meeting. A listing of speakers, public commentators, and materials is included in Appendix A. Taskforce members participated in formulating the findings and recommendations contained in this report. Each recommendation was presented as a motion and voted upon by the entire body. If a member was not present during the meeting or needed to seek guidance from his or her agency or appointing authority, members were granted 10 days to vote by . Motions and voting results are included in Appendix A. Recommendations The Taskforce presents the following recommendations to the Legislature for consideration: Benefit Program: Establish a family and medical leave benefit plan to provide paid leave for applicable purposes as defined under federal or state law. The employee is responsible for verifying the qualifying event. The plan shall be mandatory for all private and state employees, without regard to the size of the employer. Self-employed persons have the option of participating in the plan. 1 P age

4 All employees who have earned at least $9,300 in a 12-month base period would be eligible, whether or not the employment was with one or multiple employers. An alternate calculation could be obtained using quarterly earnings. Financial Benefit: The financial benefit shall be 66% of the average weekly earnings of the employee, up to a maximum of $1,000/week, for a maximum of six weeks in any 12-month period. The plan would provide for intermittent leave in half-day increments. After applying for the plan, employees would have a seven-day waiting period. An employer may permit the employee to use any paid sick leave, vacation leave, or other leave during said waiting period. Employees would not be able to draw from the fund if receiving unemployment or workers compensation benefits. Employees may be held liable if they obtain benefits fraudulently. Job Protection and Continuation of Benefits: For the period an employee is receiving benefits under this plan (1) employees who work for employers that are currently required to provide job protection and continuation of benefits (e.g. maintenance of health insurance) per federal and state laws will continue to enjoy the same rights, (2) employees who work for employers that are not currently required to provide job protection and continuation of employer benefits per federal and state laws will not be entitled to such rights. However, said employees are protected against discriminatory employment practices resulting from the utilization of the plan. Funding: The plan shall be 100% employee funded. It will be funded by withholding and placing a percentage of an employee s pay into a plan fund. Administration: The administration of the plan shall be handled by the Department of Labor. Payments into the fund will cover the costs of administration and payments to eligible employees. Implementation: Employers shall commence payroll deductions within nine months of passage of enacting legislation. Distribution of benefits shall commence one year after passage of enacting legislation. RATIONALE FOR PROVIDING PAID FAMILY AND MEDICAL LEAVE The federal Family and Medical Leave Act (FMLA) allows 59% of American workers to take unpaid leave. 1 In 2011, 11% of private sector workers and 17% of public sector workers reported having access to paid family leave. 2 For workers with earnings in the bottom quarter of wages, the percentages drop to 5% and 14% respectively. 3 The ability to take FMLA leave remains an inaccessible right for those who cannot afford it, or are not eligible because they work for a business that employs fewer than 50 employees. Providing an employee-funded mechanism for paid family and medical leave would increase supports for workers to balance work and family responsibilities, and provide financial and economic stability for 1 Pamela Winston (March 2014). U.S. Department of Health and Human Services. Work-Family Supports for Low-Income Families: Key Research Findings and Policy Trends. 2 Rutgers Center for Women and Work (January 2012). Pay Matters: The Positive Economic Impacts of Paid Family Leave for Family, Businesses and the Public. 3 Rutgers (2012). 2 P age

5 Connecticut workers. The Taskforce hopes an employee-funded paid family and medical leave plan would enhance recruitment and retention of Connecticut workers, making Connecticut an attractive location for businesses. The Need for Paid Family and Medical Leave Although there has been an increase in the number of women in the workforce and the number of dual-income households, public and private sector polices to help working families balance the needs of employment and of family responsibilities have changed only modestly. Leave to Care for an Employee s Own Illness It is widely believed that most people take FMLA leave for the birth of a new child; however in reality the majority of employees take FMLA leave for their own serious illness. According to selfreporting by private employers, 334,924 Connecticut employees took FMLA leave between 1999 and The majority of employees took leave for their own personal medical leave (67%) and the balance took leave for the birth or adoption of a child (24%), or for a family illness (9%). 4 The chance that an employee will have a serious health condition is increasingly likely as employees are staying in the workforce longer. Many employees face serious illnesses, such as cancer, chronic illness, heart disease or depression, that require them to take time off from work for as little as a few hours a day, to as much as a few months a year. Parental Leave In the U.S., caregivers of children are 69% women and 13% men. 5 In 2013, almost half of children were being raised in households in which all parents worked full-time, about twice the rate of About one-third of households with children are now headed by single parents. 7 In 2013, 70% of mothers of children under age 18 worked in the labor force, up from 47% in Mothers were the sole or primary sources of income in 40% of households with children under age In Connecticut, women make up 48% of Connecticut s workforce, 10 and in 2012, 63% of Connecticut women aged 16 or older were employed or actively looking for work. 11 The labor participation rate for Connecticut parents of children under the age of six is 73% for women and 95% for men; the rate increases to 77% for women with children under the age of 18 (the rate remains the same for men with children under the age of 18) Connecticut Department of Labor ( ). Annual Family Medical Leave Experience Reports. 5 The Shriver Report (2009). Battle of the Sexes Gives Way to Negotiations. 6 Winston (2014). 7 Winston (2014). 8 Winston (2014). 9 Winston (2014). 10 U.S. Census Bureau (2010) American Community Survey 1-Year Estimates. 11 Institute for Women s Policy Research (November 2014). The Status of Women in Connecticut s Workforce. Commissioned by the Connecticut Permanent Commission on the Status of Women. 12 Institute for Women s Policy Research (2014), percentages are rounded. 3 P age

6 In the U.S., 49% of women had no access to maternity leave in As a result working mothers tend to return to work notably faster than other women in other industrialized nations: 28% of mothers of infants return to work within two months of childbirth, and 41% return within three months of childbirth. 14 Leave to Care for a Family Member In the U.S., caregivers of elderly parents are 41% women and 23% men. 15 Nearly 62% of workers aged 45 to 74 provide care for a family member: 37% for a spouse or partner, 16% for a parent or parent-in-law, 6% for another adult relative, and 3% for a friend. 16 Workers with eldercare responsibilities represent all racial and ethnic groups, including African Americans (21%), Hispanics (20%), whites (17%), and Asians (14%). 17 About half (49%) of the workforce expects to be providing eldercare in the coming five years. 18 In a 2014 survey conducted by AARP, over half of Connecticut residents age 40 and older say they have provided care- either currently (17%) or in the past (37%) on an unpaid basis for an adult loved one who is ill, frail, elderly or who has a disability. 19 While only one in six residents surveyed is currently providing care, about 70% think it is at least somewhat likely they will be a caregiver for a relative or friend in the future. 20 Although most of the current caregivers surveyed are employed and have paid vacation and sick leave (76%), 48% do not have access to paid family and medical leave. 21 AARP s survey found strong public support to help working caregivers ensure that they maintain job protection and wage replacement when employees take leave for family caregiving purposes. Eighty-four percent (84%) supported proposals to prohibit firing due to caregiving, and 71% supported proposals to provide paid sick leave for caregiving. 22 The Cost of Unpaid Family and Medical Leave For many working families, especially low-income families, lack of paid leave leads to a basic conflict between childrearing and caregiving responsibilities, and the need to work. Leave to Care for an Employee s Own Illness Many employees cannot afford to take unpaid medical leave to recover from or mitigate their illness or health condition. Further, employees who are not covered under FMLA law are not entitled to job protection, and therefore could lose their job if they take family and medical leave. 13 U.S. Census Bureau < 14 Winston (2014). 15 The Shriver Report (2009). 16 Lynn Feinberg (June 2013). AARP Policy Institute. Keeping Up with the Times: Supporting Family Caregivers with Workplace Leave Policies. 17 Lynn Feinberg and Rita Choula (October 2012). AARP Policy Institute. Understanding the Impact of Family Caregiving on Work. 18 Feinberg (2013). 19 AARP (2014) AARP Caregiver Survey: Support for Connecticut Caregivers. 20 AARP (2014). 21 AARP (2014). 22 AARP (2014). 4 P age

7 Some employees return to work earlier than medically advisable due to economic reasons, which leads to an increased likelihood of relapsing. It can also lead to creating a dangerous work environment, depending on the nature of the work. 23 Taking unpaid family and medical leave can lead to financial ruin or economic instability for an employee and his or her family. Twenty-five percent (25%) of dual income couples and 13% of single parent families who file for bankruptcy do so after having to miss two or more weeks of work due to a personal illness or illness of a family member. 24 Parental Leave There is growing medical and scientific evidence of the critical importance of consistent, responsive parental attention to the long-term wellbeing of a child. 25 Substantial research has found negative associations for children of mothers who return to work shortly after childbirth, in particular to fulltime work. These include links to diminished breastfeeding, fewer well baby doctor s visits, and some evidence of negative cognitive effects. 26 About two-thirds of low-income households are headed by single parents, usually mothers. 27 Seventy percent (70%) of children with a single parent live in low-income families. 28 Low-income parents have significantly less access than do upper-income parents to paid time off from work. At the same time, low-income children have higher rates than other children of disability, chronic health conditions such as asthma, and educational, cognitive, social emotional, and/or developmental challenges that require parental attention. 29 Leave to Care for a Family Member Family caregivers face financial hardship when they take time out of the workforce to care for family members. They may forego earnings, Social Security benefits, job security and mobility, and employment benefits such as health insurance and contributions to retirement plans. 30 According to Forbes Magazine, because they need to care for sick children, 49% of women and 28% of men report they have lost pay or job promotions or have struggled to retain their jobs. Job losses among low-income women are most frequently the result of the birth or illness of a child. 31 The average U.S. caregiver is a 49-year old woman who works outside the home and spends nearly 20 hours per week providing unpaid care to her mother for nearly five years. 32 Nearly 68% of caregivers report making work accommodations because of caregiving, such as arriving late/leaving early or taking time off, cutting back on work hours, changing jobs, or stopping work entirely CT Campaign for Paid Family Leave, accessed October 2014 at < 24 CT Campaign for Paid Family Leave (2014). 25 Winston (2014). 26 Winston (2014). 27 Winston (2014). 28 Winston (2014). 29 Winston (2014). 30 Feinberg and Choula (2012). 31 Forbes. U.S. Far Behind in Workers Rights (2009). < 32 Feinberg and Choula (2012). 33 Feinberg and Choula (2012). 5 P age

8 According to a survey conducted by AARP, the typical family caregiver in Connecticut is a married woman in her 50s. The survey also showed that Connecticut caregivers are just as likely to be working full-time (43%) as their non-caregiving counterparts (46%), and about 15% say they have taken more than a week off to care for a family member in the past year. 34 Nationally, 19% of retirees left the workforce earlier than planned because they had to care for an ill spouse or other family member. 35 Family caregivers (age 50 and older) who leave the workforce to care for a parent lose, on average, nearly $304,000 in wages and benefits over a lifetime. 36 Assuming the role of caregiver for aging parents in midlife may substantially increase women s risk of living in poverty in old age. 37 Employers There is also a cost to employers when their employees assume the caregiver role. According to the American Management Association, the estimated costs of replacing a lost employee range from roughly a quarter of, to as much as five times, the employee s annual salary or wages, plus the associated loss of productivity and employee morale. 38 It is projected that U.S. businesses lose up to $33.6 billion per year in lost productivity from full-time working caregivers, due to costs associated with replacing employees, absenteeism, workday distractions, supervisory time, and reduction of hours. 39 Additionally, in one study, employers paid about 8% more for healthcare of caregiver employees compared to non-caregivers, potentially costing U.S. businesses $13.4 billion per year. 40 The Small Business Majority commissioned a poll, resulting in 507 respondents (51% Republican, 34% Democrat and 13% Independent), and found that a significant number of small business owners supported some type of paid family and medical leave. 41 More small business owners support (45%) than oppose (41%) the creation of an employer-employee funded family and medical leave insurance pool. 42 The number increases to 59% in support when the question was about a plan entirely funded by employees. 43 The Benefits of Paid Family and Medical Leave The ability of employees to take paid leave results in better health outcomes and financial stability for themselves and their families. 34 AARP (2014). 35 Feinberg and Choula (2012). 36 Feinberg and Choula (2012). 37 Feinberg and Choula (2012). 38 Rutgers (2012). 39 Feinberg and Choula (2012). 40 Feinberg and Choula (2012). 41 Small Business Majority (September 27, 2013). Opinion Poll: Small Business Support Family Medical Leave. 42 Small Business Majority (2013). 43 Small Business Majority (April 2014). Paid Family Leave in Connecticut: What Small Businesses Need to Know. 6 P age

9 Parental Leave Women who report taking paid leave are more likely to be working 9 to 12 months after a child s birth than are those who report taking no leave at all. 44 Women who return to the workforce within a year experience no wage declines; however women who leave the workforce for more than a year experience both wage and hour reductions. 45 Studies have documented associations between parental leave and increased birth weight, decreased likelihood of premature birth, increases in breastfeeding establishment and duration, and an increased likelihood of obtaining well-baby care. 46 Providing paid leave reduces the costs to public assistance benefit programs. Almost one-tenth of workers using unpaid FMLA leave after a birth of a child used public assistance during their leave. 47 Women who return to work after a paid leave have a significantly lower likelihood of receiving public assistance and food stamps in the year following the child s birth. 48 Women who take paid leave report $413 less in public assistance on average in the year following the child s birth, than women who take no leave. 49 Thirty-nine percent (39%) of women are less likely to receive public assistance and 40% of women are less likely to receive food stamps in the year following a child s birth. 50 Employers A paid leave program can benefit employers by improving workers attendance, productivity, and morale, and reducing turnover. According to the U.S. Census Bureau, 80% of mothers who returned to work within 12 months of their child s birth returned to the same employer, and 69% had no change in pay or hours worked. 51 After California implemented its paid leave program, it found an 89% retention rate for low-wage workers and an 81% retention rate for high-wage workers. 52 Employers often express concern about costs and other burdens associated with employees taking FMLA leave. However, a substantial majority of employers report that complying with FMLA has a positive or neutral effect on productivity (83%), profitability (90%), growth (90%) and employee morale (90%). 53 After California implemented paid FMLA, it found similar results in its employer survey: 89% reported it had a positive or no noticeable effect on their company s productivity. Small employers responded more positively than larger employers: 91% reported that it had positive or no noticeable effect on profitability/performance, turnover, and worker morale. 54 Offering a paid family leave plan could also assist businesses in providing benefits that they are not able to offer or are currently struggling to provide. 44 Rutgers (2012). 45 Rutgers (2012). 46 Rutgers (2012). 47 Rutgers (2012). 48 Rutgers (2012). 49 Rutgers (2012). 50 Rutgers (2012). 51 Rutgers (2012). 52 Winston (2014). 53 David Cantor et.al. (2000). Balancing the Needs of Families and Employers: Family and Medical leave Surveys 2000 Update (U.S. Department of labor, Washington, DC). 54 Winston (2014). 7 P age

10 A Business Point of View It should be noted that the business owners who spoke to the Taskforce (see Appendix A), and the majority of Taskforce members who represented the interest of business were not in support of establishing a paid family and medical leave program because they are concerned about the negative impact to businesses, and the potential costs to the state s taxpayers. The cost of the program to the State of Connecticut is still unknown. However, represented business interests assert that a similar program in Washington State has not been fully implemented because it was estimated to cost taxpayers up to $1.2 billion dollars per biennium. 55 According to represented business interests, many business owners struggle with maintaining an experienced and dependable workforce due to the existing requirements of unpaid FMLA leave, and believe that a paid leave plan would incentivize employees to take longer, and medically unnecessary FMLA leaves. Some employers offer short-term disability programs through an employer-employee paid benefit plan and believe the program is effective in providing wage replacement. According to a Small Business Majority poll, more than two-thirds of small business owners have either a formal written policy, a consistent but not written policy, or an informal policy provided on a case-by-case basis to provide family medical leave. 56 Of the small business owners who do offer family medical leave, nearly four in 10 offer full or partial pay and 26% offer pay depending on the employee. 57 Represented business interests are concerned that the establishment of a paid family leave program will deter businesses from maintaining or establishing businesses in the State. In 2014, Connecticut ranked 47 th in the nation, down from 43 rd in 2013, for the cost of doing business, and 24 th and 26 th respectively for business friendliness. 58 Legislation that adds costs and administrative mandates to businesses are considered when determining this business outlook for Connecticut. SUMMARY OF FAMILY AND MEDICAL LEAVE PROGRAMS Workplace family policies in the U.S. have developed over time to include temporary disability insurance (TDI), unpaid family leave, and paid family leave for the care of a new child or other family member. Four states (California, New Jersey, New York, and Rhode Island) enacted TDI programs in the 1940s, and Hawaii enacted its program in TDI provides partial wage replacement to certain workers with short-term injury or illness unconnected to work. In 1978, passage of the federal Pregnancy Discrimination Act required employers that offered TDI to cover the effects of pregnancy and childbirth consistent with coverage of other disabilities. All of these states, except 55 Washington State Legislature SHB 1457 bill and fiscal note, available at < This proposed bill would have established an employer-employee funded plan to provide up to 12 weeks of wage replacement (up to $1,000/wk). It was anticipated that the employer-employee contributions would cover the administrative costs to the state and payments to eligible employees. 56 Small Business Majority (2013). 57 Small Business Majority (2013). 58 CNBC (2014). America s Top States for Business. 8 P age

11 Hawaii and New York, have enacted paid family and medical leave policies to care for a new child or other family member. Federal 59 Employees who work for public agencies and private sector employers with 50 or more employees may take up to 12 weeks of unpaid, job-protected leave annually for incapacity due to pregnancy, prenatal medical care or childbirth, the care of a newly born, adopted or foster child, to care for an employee s serious health condition, to care for a family member with a serious health condition, or to address qualifying exigencies arising out of a family member s military service. Employees can take up to 26 weeks of unpaid, job-protected leave annually to care for an injured service member in the family. To be eligible, the employee must have been employed for at least 12 months and have worked 1,250 hours in the previous 12-month period. Family members are defined as spouse, child, or parent. Connecticut 60 Employees who work for employers with 75 or more employees can take up to 16 weeks of unpaid, job-protected leave in two years for the care of a newly born, adopted or foster child, to care for an employee s serious health condition, to care for a family member with a serious health condition, or to serve as an organ or bone marrow donor. To be eligible, the employee must have been employed for at least 12 months and have worked 1,000 hours in the previous 12-month period. Family members are defined as spouse, child, parent or parent-in-law. This law does not apply to all employers municipalities, local or regional boards of education, and private or parochial elementary or secondary schools adhere to federal FMLA law. California 61 Employees who work for the private sector and certain public sector employers with 50 or more employees can take up to 12 weeks of unpaid, job-protected leave annually for the care of a newly born, adopted or foster child, to care for an employee s serious health condition, or to care for a family member with a serious health condition. To be eligible, the employee must have worked for 1,250 hours in the previous 12-month period. Family members are defined as spouse, child, or parent. The state s TDI program allows employees to take up to 52 weeks a year for their own disability. Employees who are eligible to take FMLA leave are entitled to take up to six weeks of paid, jobprotected leave annually for the remaining FMLA purposes. For the paid family leave program, family members are defined as spouse, child, parent, parent-in-law, domestic partner, grandchild, grandparent, or sibling. The programs are funded by employees through withholding 1% of their pay for the disability insurance fund. Claimants typically receive 55% of their weekly wage in paid leave, up to a maximum of $1, U.S.C. 260 et. seq. 60 C.G.S kk et. seq. 61 Cal. Unemp. Ins. Code 2601, 3301(a) (1), and 3300(g); 2013 Cal. Legis. Serv. Ch. 350 (S.B. 770); State of California, Employment Development Department. Quick Statistics < 9 P age

12 New Jersey 62 Employees who work for a governmental agency, a school, or an employer with 50 or more employees can take up to 12 weeks of unpaid, job-protected leave annually for the care of a newly born, adopted or foster child, to care for an employee s serious health condition, or to care for a family member with a serious health condition. To be eligible, the employee must have worked for 1,000 hours in the previous 12-month period. Family members are defined as spouse, child, parent, or parent-in-law. The state s TDI program allows employees to take up to 26 weeks for their own disability. Employees who are eligible to take FMLA leave are also entitled to take up to six weeks of paid, jobprotected leave annually for the remaining FMLA purposes. For the paid family leave program, family members are defined as spouse, child, parent, parent-in-law, civil union partner or domestic partner. The programs are funded by employees through withholding 0.1% of their taxable base wage for the disability insurance fund. Claimants typically receive 66% of their average weekly wage in paid leave, up to a maximum of 53% of the average weekly remuneration statewide. Rhode Island 63 Employees who work for the State of Rhode Island, private employers with 50 or more employees, or any city, town or municipal agency that employees 30 or more employees can take up to 13 weeks of unpaid, job-protected leave annually for the care of a newly born, adopted or foster child, to care for an employee s serious health condition, or to care for a family member with a serious health condition. To be eligible, the employee must have been employed for at least 12 months, averaging at least 30 hours per week. Family members are defined as spouse, child, parent, or parent-in law. The state s TDI program allows employees to take up to 30 weeks a year for their own disability. Employees who are eligible to take FMLA leave are also entitled to take up to four weeks of paid, job-protected leave annually for the remaining FMLA purposes. For the paid family leave program, family members are defined as spouse, child, parent, parent-in-law, domestic partner or grandparent. The programs are funded by employees through withholding 1.2% of their first $61,400 in earnings for the temporary disability insurance fund, and a lesser yet-to-be determined amount for family care leave. Claimants may receive up to a maximum of $752 per week. 62 N.J. Stat. Ann. 53:21-27, 43: (a), (a), ;State of New Jersey, Department of Labor and Workforce Development. Cost to Worker, State Plan < 63 R.I. Gen. Laws (a), 5(d); R.I. Department of Labor and Training, Temporary Disability Insurance (2013) < 10 P age

13 DETAILED DESCRIPTION OF THE TASKFORCE S RECOMMENDED BENEFIT PROGRAM Eligibility Employees are eligible under the plan if they give birth to, adopt or foster a new child or if they or a family member has a serious illness. Benefits will be available for all forms of leave covered under the federal and Connecticut FMLA law. Both federal and state law provides unpaid leave for the care of a newly born, adopted or foster child, to care for a family member with a serious health condition, or to care for an employee s own serious health condition. State law also provides unpaid leave for an employee who serves as an organ or bone marrow donor. Federal law also provides unpaid leave to care for an injured service member in the family, or to address qualifying exigencies arising out of a family member s military service. All private and state employees, without regard to the size of the employer, contribute to the plan. A large majority of employees do not have access to employer-paid family and medical leave. The Taskforce recommends mandating that all employees in the state contribute to the plan in order to create a large pool of employees, which is anticipated to reduce the overall cost per employee. Such a plan has the potential of providing a safety net if any employee needs to take a leave from work for FMLA purposes. Self-employed persons have the option of participating in the program. Details of this proposal would need to be studied further to determine verification of income, and the base period for determining benefits. All employees who have earned at least $9,300 in a 12-month base period are eligible for benefits under the plan, whether or not the employment was with one or multiple employers. In Connecticut, FMLA benefits are available only if the employee has been employed by the same employer for a period of one year for at least 1,000 to 1,250 hours. The Taskforce concluded that eligibility for an employee-funded paid family and medical leave plan should be based on attachment to the labor market, not attachment to a particular employer. The Taskforce expressed concern that low-wage workers often have several part-time jobs to make ends meet, and they rarely average 30 hours a week or last for a year. Any employee is eligible as long as the earnings threshold is met. An employer size will not affect eligibility. The Taskforce concluded that a mandatory employee-funded paid family and medical leave plan should allow employees to obtain partial wage replacement when they need to take a leave. This recommendation will likely result in more employees requesting leave since those who were not eligible under federal or state FMLA will be allowed to access the plan if they take a leave for FMLA purposes. It is anticipated that employers would benefit from a positive or neutral impact on productivity, profitability, turnover and morale. The employee is responsible for verifying the qualifying event. It is recommended that an employee be required to provide verification consistent with existing FMLA leave requirements to verify the qualifying event, e.g. medical certification, fitness for duty, or periodic reports. The definition of family member has been expanded to include parent-in-law and siblings. Currently, federal FMLA law defines a family member as a spouse, child, parent; state law includes parent-in-law. The Taskforce recommends applying all of these definitions and adding siblings for the purposes of the plan. The Taskforce considered the experiences presented about the cases when employees are responsible for caring for more than the existing parties that are defined as family. 11 P age

14 It should be noted that some Taskforce members did not vote in favor of the expansion to include parent-in-law and siblings because they believed the definition should have been broader. They would have preferred that other family members be included as well, such as grandchildren and grandparents. Financial Benefit The benefit should be 66% of the average weekly earnings of the employee, up to a maximum of $1,000/week. Currently, employees get no wages while on FMLA leave and this benefit plan would provide some wage replacement. The benefit plan is comparable to the plan offered for short-term disability plans, except it covers more than an employee s disability and it is offered at a substantially lower cost. The average cost for a short-term disability policy is 1% to 3% of a worker s annual income, with monthly premiums ranging from $37 a month/$444 a year for a 30 year old to $70 a month/$840 a year for a 50 year old. The cost is based on several factors such as age, sex, occupation or the amount of potential lost income. 64 The estimated costs of benefits provided for Connecticut employees through this plan is far less at 0.89% or $135 a year regardless of age, sex, occupation, or the amount of potential lost income (Appendix A, Table 7). The benefit is available for a maximum of six weeks in any 12-month period. An employee may take up to 12 weeks of unpaid leave for FMLA purposes. The number of weeks provided in this plan was based on the fact that other states have provided four to six weeks of paid leave. It is hoped that the number of weeks would be increased over time if the plan is funded as anticipated. It should be noted that some Taskforce members did not vote in favor of the proposal of six weeks of paid leave because they believed the time period should have been longer. They would have preferred the plan provide up to 12 weeks to mirror the allowable period of unpaid leave under the FMLA. The plan provides for intermittent leave for as little as half-day increments. Currently, employees are allowed to take intermittent leave of lesser time, i.e. one hour. The Taskforce concluded that it would be difficult to administer a plan in increments less than a half-day. Employees would have a seven-day waiting period. After applying for the plan, an employee would have a seven-day waiting period before wage replacement was issued. An employer may permit the employee to use any paid sick leave, vacation leave, or other leave during the seven-day waiting period. Employees will not be able to draw from the fund if they are receiving benefits through unemployment or workers compensation benefits. The plan supplements, rather than supplants, existing benefits granted to employees by their employer or state law. Thus, an employee is entitled to benefits under this program or under another program at the employee s election, consistent with federal or state law. Employees may be held liable if he or she obtains benefits fraudulently. Individuals who submit false statements in order to obtain or assist in obtaining plan benefits shall be subject to a civil fine up to five 64 < Accessed October 27, P age

15 hundred dollars ($500). Benefit applicants who submit false statements are subject to denial, termination and/or recoupment of their benefits in addition to a fine of up to five hundred dollars ($500). Job Protection and Continuation of Benefits Upon return to work, an employee who works for an employer who employs 50 or more employees is entitled to the same or a comparable job and to any other term or condition of employment as existed on the day leave began. If an employee had the right to job protection and continuation of leave benefits when taking leave, that employee is entitled to the same rights. Employees who work for an employer who employs fewer than 50 employees are not provided job protection; however they cannot be discriminated against for exercising their right to utilize the plan. Under federal and state FMLA, employees of fewer than 50 employees do not have the right to job protection or continuation of leave benefits if they take leave for FMLA purposes. Since the recommended plan is a mandate for all employees, the Taskforce considered whether all employees should have job protection and continuation of benefits rights, and determined that its charge was not to redefine the family and medical leave law by lowering the employer size, rather its charge was to develop a wage replacement plan for workers. Therefore, the majority of Taskforce members voted not to extend job protection and continuation of benefits rights to all employees. The Taskforce believed that penalizing employees for utilizing the funds they paid into the plan must not occur, and therefore recommends that all employees be protected from discriminatory employment practices, by establishing that an employer cannot interfere with or deny an employee s right to use the plan, or retaliate against an employee for exercising his or her right to utilize the plan. It should be noted that some Taskforce members expressed concern that the above antidiscrimination language may induce employers, who would have otherwise hired an employee back after their leave, to fire employees rather than risk a retaliation complaint in the future. Funding The paid family leave plan will be 100% employee funded. Taskforce members concluded that requiring an employer-funded plan would not be feasible in the current economy. It is estimated that approximately 940,000 workers in Connecticut would be eligible for the plan, and the Taskforce believes they could fund the plan at minimal cost to themselves - a yearly cost of approximately $135 per employee a year (Appendix B, Table 7). It should be noted that some Taskforce members would have preferred the plan be 100% employerfunded. Administration The Department of Labor should administer the plan. The Department of Labor was suggested primarily because it already administers unemployment insurance. The Commissioner of Labor submitted written comments regarding the agency s administrative capacity, included in Appendix A. Payments into the paid family leave fund will cover the costs of administration as well as payments to eligible employees. Based on the funding in other states, the Taskforce believes the plan would pay for its own 13 P age

16 administrative costs through employee contributions. However, it should be noted that every state that has a paid family leave program, also has an employee-funded TDI system that has been in place for decades. The Taskforce did not have the funding or expertise to conduct an analysis of the costs for developing an infrastructure for a paid family and medical leave benefit plan. This summer, the U.S. Department of Labor s Women s Bureau, in partnership with the Employment and Training Administration, announced a grant opportunity of $500,000 for five states to participate in its Paid Leave Analysis Grant Initiative. The Connecticut Department of Labor sought and was not awarded a grant. The five grants were awarded as follows: 65 The District of Columbia Department of Employment Services: $96,281 to produce an economic impact analysis, financing and benefit models, and a cost-benefit study to assess the feasibility of enacting a paid family leave program. The Massachusetts Department of Labor Standards: $117,651 to conduct research and develop a micro-simulation model that will help the state estimate eligibility, take-up and benefit costs of a variety of proposed paid family and medical leave programs. The Montana Department of Labor and Industry: $124,651 to research the feasibility and economic impact of creating a state paid family leave program including providing financing, eligibility and benefit recommendations and to conduct public opinion research for communications and implementation process. The Rhode Island Department of Labor and Training: $161,417 to determine the effectiveness of the Rhode Island Temporary Caregiver Insurance Program and its benefits for Rhode Islanders, as well as the public s awareness of the program. The Taskforce recommends an initial allocation of funding to the Department of Labor (1) to assess the cost of developing an infrastructure and maintaining a plan, and (2) for the initial implementation and enforcement of a plan. Implementation The Taskforce recommends that employers commence payroll deductions within 9 months of passage of enacting legislation, with benefits starting one year after passage of enacting legislation. It is hoped that delaying the benefit payment period will allow the plan to grow and be able to sustain the administration of the program and the payments for wage replacement. 65 Department of Labor Women s Bureau (September 24, 2014). News Release: $500K for studies on expanding family and medical leave provided by US Labor Department Grants, available at < 14 P age

17 APPENDIX A: TASKFORCE COMPOSITION AND PROCESS

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19 Taskforce Composition The Taskforce was composed of the following persons in accordance with Special Act (2013): Legislators & State Agencies - The Executive Director of the Permanent Commission on the Status of Women (Teresa C. Younger and Carolyn M. Treiss, JD, MSW), represented by Natasha M. Pierre, JD, MSW, PCSW Policy & Legislative Director and Chair of the Family Medical Leave Insurance Taskforce - The Commissioner of Insurance (Commissioner Thomas B. Leonardi), represented by Kathleen Walsh, Principal Examiner - The Commissioner of Labor (Commissioner Sharon Palmer), represented by Jennifer C. Devine, Esq., Staff Attorney III - The Connecticut General Assembly Labor and Public Employees Committee Chairs, represented by Senator Catherine A. Osten and Representative Peter A. Tercyak - The Connecticut General Assembly Labor and Public Employees Committee Ranking Members, represented by Representative Richard A. Smith and Michael P. Regan, G.S. Regan Inc. (on behalf of Senator Joe Markley) - The Office of the State Comptroller (State Comptroller Kevin Lembo), represented by Jacqueline Kozin, Legislative Liaison and Michelle Gilman, Assistant State Comptroller Public Members - Marilyn Calderon, M.Ed, Executive Director, Connecticut Parent Power; Appointed by the Majority Leader of the House (Representative Joe Aresimowicz) to represent an organization that advocates for working families. - Deborah Chernoff, Public Policy Director, New England Health Care Employees Union, District 1199, SEIU; Appointed by Senate President Pro Tempore (Senator Donald E. Williams, Jr.) as an individual that serves in a care-giving institution. - Paul M. Dickes, Jr., Chief Union Safety Representative, I.A.M.A.W. Local Lodge 700; Appointed by the Speaker of the House (Representative J. Brendan Sharkey) to represent a labor organization. - Marilyn Douglas, Vice President and Director of Human Resources and Counsel, Petra Construction Corporation; Appointed by the Senate Minority Leader (Senator John McKinney) to represent an organization that provides temporary disability insurance. - Nora L. Duncan, State Director, AARP Connecticut; Appointed by the Governor (Governor Dannel P. Malloy) to represent an organization that advocates for individuals 65 years of age or older. - Eric Gjede, Esq., Assistant Counsel, Connecticut Business and Industry Association; Appointed by House Minority Leader (Representative Lawrence F. Cafero, Jr.) to represent the interests of state businesses. - Edward R. Granfield, President, Oyster River Energy, Inc.; Appointed by Senate Minority Leader (Senator John McKinney) to represent the interests of small businesses. - Eileen M. Healy; Appointed by the Governor (Governor Dannel P. Malloy) to represent an organization that advocates for the rights of persons with disabilities. - Robin Imbrogno, President, the Human Resource Consulting Group; Appointed by the Majority Leader of the House (Representative Joe Aresimowicz) to represent the interests of women-owned businesses. - Kathleen Ann Marinelli, MD, IBCLC, FABM, Connecticut Children s Medical Center, Division of Neonatology; Chair, United States Breastfeeding Committee; Associate Professor of 1 A ppendix A

20 Pediatrics, University of Connecticut School of Medicine; Appointed by the Governor (Governor Dannel P. Malloy) to represent an organization that advocates for infant health. - Eileen F. Swan, Esq.; Appointed by the Speaker of the House (Representative J. Brendan Sharkey) to represent an organization that advocates for individuals with chronic or acute illnesses. - Janette Hernandez Walker, Human Resources Director, Planned Parenthood of Southern New England, Inc.; Appointed by the Senate Majority Leader (Senator Martin M. Looney) to represent an organization that provides medical care to working families. - Wendy W. Wanchak, Esq., Attorney, Connecticut Legal Services; Appointed by Senate President Pro Tempore (Senator Donald E. Williams, Jr.) to represent an organization that provides legal services to low-income individuals. Vacancies: (1) Appointment by the Senate Majority Leader (Senator Martin M. Looney) to represent the insurance industry, and (2) Appointment by House Minority Leader (Representative Lawrence F. Cafero, Jr.) to represent the interests of parents. Taskforce Process The executive director of the Permanent Commission on the Status of Women (PCSW), or the executive director s designee, was appointed as the chair and convener of the Taskforce, and charged with staffing the Taskforce, within existing appropriations. PCSW s past Executive Director, Teresa C. Younger appointed Natasha M. Pierre to chair and convene the Taskforce. Additional PCSW staff was provided by Michelle Noehren who developed and maintained the Taskforce website and provided administrative assistance, and Rosemary Lopez who provided administrative assistance. The Taskforce met in person on August 19, October 17, December 19, 2013, and January 16, April 10, May 8, June 19, July 10, August 21, September 18, The meeting materials are available at Presenters Nora L. Duncan, State Director, AARP: AARP Caregiving Survey (June 9, 2014) Lynn F. Feinberg, MSW, Senior Strategic Policy Advisor, AARP Public Policy Institute: The Impact of Family Caregiving on Work (January 16, 2014) Senator Gayle Goldin, Rhode Island Legislature and Marcia Cone, CEO, Women s Fund of Rhode Island: Rhode Island s Paid Family Leave Program (January 16, 2014) Michael Reagan, G.S. Regan, Inc. Member: Cash Sickness Benefits (December 19, 2013) Erik Retting, Outreach Manager, Small Business Majority: Small Business Majority Family Medical Leave Poll Report (April 10, 2014) Vicki Shabo, Director of Work & Family Programs, National Partnership for Women and Families: FMLI Models in the Nation (October 17, 2013) Jay Sheehy, President, Kamco Supply of New England: An Employer s Perspective (January 16, 2014) 2 A ppendix A