OFFICE OF FISCAL ANALYSIS

Legislative Office Building, Room 5200

Hartford, CT 06106 (860) 240-0200

http: //www. cga. ct. gov/ofa

sHB-6187

AN ACT MANDATING EMPLOYERS PROVIDE PAID SICK LEAVE TO EMPLOYEES.

OFA Fiscal Note

State Impact:

Agency Affected

Fund-Effect

FY 10 $

FY 11 $

Regional Comm. -Tech. Colleges; CT State University System

GF - Cost

500,000

500,000

Labor Dept.

GF - Potential Cost

116,900

116,900

Comptroller Misc. Accounts (Fringe Benefits)1

GF - Potential Cost

29,700

29,700

Various State Agencies

Various - Cost

See Below

See Below

Labor Dept.

GF - Revenue Gain

Potential Minimal

Potential Minimal

Note: GF=General Fund

Municipal Impact:

Municipalities

Effect

FY 10 $

FY 11 $

Various Municipalities

STATE MANDATE - Cost

See Below

See Below

Explanation

The bill will result in a cost to the state. The bill requires employers with 50 or more employees to provide their employees, with certain exemptions, with paid sick leave. Day and temporary workers are not covered under the bill.

The bill results in a cost to the Regional Community Technical Colleges and the Connecticut State University System of approximately $500,000 per year by extending sick leave coverage to part-time personnel.

It is not known how many other various state and municipal employees would be impacted by this bill; however, full-time and certain part-time employees (typically those working 20 or more hours per week) currently receive paid sick leave. The fiscal impact to various state agencies and municipalities is the cost of the paid sick leave benefit. For example, if a part-time employee earning $15 per hour accrues, and uses, 20 hours of paid sick leave in a year, the cost to the state or municipality for this one employee's benefit is $300. 2

Employees may file a complaint with the Department of Labor if their employer violates any of the provisions of Sections 2 to 5 of the bill. This is expected to increase the number of complaints regarding wage and hour information and may require an additional wage investigator (annual salary of approximately $49,500 and fringe benefits of $12,600) in the Wage and Workplace Standards Division.

Currently, the department reviews approximately 100 cases annually for probable cause hearings regarding the Family Medical Leave Act, resulting in approximately 20 hearings per year. The number of probable cause hearings is expected to increase with the passage of the bill and may require an additional staff attorney (annual average salary of approximately $67,400 and fringe benefits of $17,100).

The bill specifies that the Labor Commissioner implement the provisions of the bill within available appropriations. With passage of the bill, the Department of Labor would either (1) re-allocate existing funding for this purpose from another program; (2) incur additional costs; or (3) delay or not implement this program due to lack of funding.

The Labor Commissioner's decision to reward appropriate relief for a complaint may be appealed in Superior Court. Any administrative appeals under Section 4 of the bill could be accommodated by the Judicial Department and the Office of the Attorney General without requiring additional resources.

The bill could also result in a minimal revenue gain. Employers who violate Sections 2 to 5 of the bill will be liable to the Department of Labor for a civil penalty of $600 for each violation.

The Out Years

The annualized ongoing fiscal impact identified above would continue into the future subject to inflation.

1 The fringe benefit costs for state employees are budgeted centrally in the Miscellaneous Accounts administered by the Comptroller on an actual cost basis. The following is provided for estimated costs associated with additional personnel. The estimated non-pension fringe benefit rate as a percentage of payroll is 25. 43%. Fringe benefit costs for new positions do not initially include pension costs as the state's pension contribution is based upon the 6/30/08 actuarial valuation for the State Employees Retirement System (SERS) which certifies the contribution for FY 10 and FY 11. Therefore, new positions will not impact the state's pension contribution until FY 12 after the next scheduled certification on 6/30/2010.

2 $15 hourly wage x 20 paid sick leave hours earned = $300.