AN ACT MANDATING EMPLOYERS PROVIDE PAID SICK LEAVE TO EMPLOYEES.

Agency Affected	Fund-Effect	FY 12 $	FY 13 $
Labor Dept.	GF - Cost	None	169,720
Comptroller Misc. Accounts (Fringe Benefits)¹	GF - Cost	None	40,325
Various State Agencies	GF - See Below	See Below	See Below
Labor Dept.	GF - Revenue Gain	Potential Minimal	Potential Minimal

Explanation

The bill requires employers with 50 or more employees to provide paid sick leave under certain circumstances to be utilized for various enumerated purposes. The bill does not apply to 1) day or temporary workers, and 2) certain state college or university employees.

Full-time and permanent part-time state employees currently receive paid sick leave. As this bill excludes day and temporary workers and employees of any constituent unit of the state system of higher education it is not clear how many, if any, state or municipal employees this bill would potentially impact. Any fiscal impact to the state or municipality would be equal to the cost of the absent employee's wages and associated overtime costs, if applicable, and is expected to be minimal.

Section 4 allows complaints to be filed with the Department of Labor (DOL) if an employer violates any of the provisions of Sections 2 to 5 of the bill. This is anticipated to increase the number of complaints received by the department and may require an additional Wage Investigator (annual salary of $71,108 and full fringe benefits of $16,895) in the Division of Wage and Workplace Standards beginning in FY 13².

This is also anticipated to result in an increase in the number of probable cause hearings conducted by DOL. Currently, two Staff Attorneys review approximately 100 cases annually for probable cause hearings regarding the Family and Medical Leave Act, resulting in approximately 20 hearings per year. It is anticipated that the number of probable cause hearings would increase with the passage of the bill, requiring an additional Staff Attorney II (annual salary of $98,612 and full fringe benefits of $23,430) beginning in FY 13.

The bill specifies that DOL implement the provisions of the bill within available appropriations. However, if the bill were to be implemented the FY 13 costs to DOL would be $169,720 and fringe benefit costs of $ 40,325 (these costs are described in detail above).

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.

Section 4 also provides a $600 civil penalty for each violation of Sections 2 to 5 of the bill. This results in a potential minimal revenue gain to DOL.

Section 5 requires DOL to develop regulations regarding the means by which employers must provide notice to covered employees of the provisions of the bill. The development of such regulations could be accommodated by DOL without requiring additional resources.

The Out Years

The annualized ongoing cost impact identified above would continue into the future subject to inflation; the ongoing revenue impact identified above would remain constant into the future as civil penalty amounts are set by the bill.

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 changes in personnel. The estimated non-pension fringe benefit rate as a percentage of payroll is 23. 76%. Fringe benefit costs for new positions do not initially include pension costs as the state's pension contribution is based upon the 6/30/10 actuarial valuation for the State Employees Retirement System (SERS) which certifies the contribution for FY 12 and FY 13. Therefore, new positions will not impact the state's pension contribution until FY 14 after the next scheduled certification on 6/30/2012.

² The earliest an employee can begin accruing sick leave is January 1, 2012. Employees must work at least 680 hours after the leave begins accruing before they can use it. Assuming a 40 hour work week, the earliest an employee could use such leave would be May 2012. It is assumed that any complaints, investigations and probable cause hearings would not commence until July 2012, which is FY 13.

Municipalities	Effect	FY 12 $	FY 13 $
Various Municipalities	STATE MANDATE - Cost	See Below	See Below