OLR Bill Analysis

sHB 6932

AN ACT CONCERNING PAID FAMILY AND MEDICAL LEAVE.

SUMMARY:

This bill creates the Family and Medical Leave Compensation (FMLC) program to provide wage replacement benefits to covered employees taking leave under the state's private-sector Family and Medical Leave Act (FMLA), the family violence leave law, or the state employee family medical leave law, as amended by the bill. It provides a covered employee with up to 12 weeks of weekly FMLC benefits in an amount that is the lesser of (1) the employee's average weekly net earnings over the previous 52 weeks or (2) $1,000. The program is funded by employee contributions.

Under the bill, “covered employees” are those who (1) work for an employer that has at least two employees, as determined by the labor commissioner every October 1; (2) are enrolled in the FMLC program; (3) earned at least $9,300 from one or more employers over 12 consecutive months during the 24 months prior to enrolling; and (4) meet certain administrative requirements. Covered employees also include sole practitioners and self-employed people who meet these requirements and opt to join the FMLC program under certain conditions.

The bill requires the labor commissioner to administer the FMLC program and, among other things, determine the amount that covered employees must contribute to the program to ensure its solvency. She must begin collecting contributions from covered employees by February 1, 2016 and paying FMLC benefits by February 1, 2017. A covered employee can collect FMLC benefits 12 months after he or she starts making contributions to the program. The bill establishes the FMLC Trust Fund to hold employee contributions and pay for FMLC benefits and administrative costs.

The bill is unclear about whether employee enrollment in the FMLC program is mandatory or at an employee's discretion. It requires covered employees to enroll in a manner the labor commissioner prescribes, but, by definition, only employees who are already enrolled in the program are considered covered employees.

The bill also changes various provisions of the private-sector FMLA, family violence leave law, and state employee family medical leave law, which generally require certain employers to provide unpaid leave to employees for various reasons related their or their family members' health. Table 1 shows the bill's changes to a covered employer's size and the length of paid versus unpaid leave available under these three laws.

Table 1. Covered Employer's Size and Allowed Leave under

Current Law and the Bill

Law

Covered Employer's Size under Current Law

Covered Employer's Size Under the Bill

Unpaid Leave Under Current Law

Paid Leave Under the Bill

Private Sector FMLA

At least 75 employees

At least two employees

16 weeks over a 24-month period

12 weeks over a 12-month period

Family Violence Leave

At least three employees

At least two employees

12 days per calendar year

12 weeks over a 12-month period (but employers must only provide 12 days of leave per year)

State Employee Family Medical Leave Law

N/A

N/A

Up to 24 weeks in a two- year period

Up to 12 weeks in one-year period

Among other things, the bill also:

1. extends the private-sector FMLA's requirements to include the state, municipalities, and other employers that are currently excluded;

2. makes employees eligible for private-sector FMLA leave if they earned at least $9,300 with any employers over the 12 months preceding their leave (current law requires employees to have been employed by their employer for at least 12 months and 1,000 work-hours);

3. eliminates an employer's ability to require an employee taking private-sector FMLA leave to use his or her employer-provided paid sick time or other employer-provided paid leave;

4. expands the family members for whom an employee can take private-sector FMLA leave to include the employee's siblings, grandparents, and grandchildren (including each of those related by marriage); and

5. requires employers with at least two employees to allow their employees to use up to two weeks of any employer-provided paid sick leave for the serious health condition of the employee's sibling, grandparent, and grandchild (including each of those related by marriage).

Lastly, the bill makes numerous minor and conforming changes.

EFFECTIVE DATE: Provisions that create the FMLC program and repeal a law that provides leave to certain municipal employees are effective upon passage. Provisions affecting the terms of the various family medical leave laws are effective October 1, 2015.

FAMILY AND MEDICAL LEAVE COMPENSATION PROGRAM

2, 6, 8, & 20 – The FMLC Program

Administration. The bill establishes the FMLC program and requires the labor commissioner to administer it. It authorizes the commissioner to:

1. determine whether a person is eligible for FMLC;

2. require a covered employee to provide certification from a health care provider to support the employee's FMLC claim;

3. request and examine any books, records, documents, contracts, or other papers relevant to a covered employee's eligibility;

4. summon and examine under oath any witnesses that can provide information relevant to a covered employee's FMLC claim;

5. establish procedures and forms for filing FMLC claims; and

6. ensure the confidentiality of records and documents related to medical certification, recertifications, or medical histories of covered employees and their family members, as required under the state's private-sector FMLA.

The bill also requires the commissioner, in consultation with the state treasurer, to:

1. design, establish, and operate the program to ensure transparency in program management and the FMLC Trust Fund through oversight and ethics reviews of plan fiduciaries;

2. establish and maintain a secure Internet website that displays public notices from the commissioner and other information she deems relevant and necessary to educate the public about the FMLC program; and

3. submit a report to the General Assembly by January 1, 2016 with any recommendations for legislative action needed to implement the program.

The bill requires the commissioner, by January 1, 2017, to adopt regulations to establish the procedures and guidelines needed to implement the FMLC program and the bill's related changes to the private-sector FMLA and state employee family medical leave law. The regulations must at least include procedures for hearings and redress, including restoration and restitution, for an employee who believes an employer has violated any of the bill's or these laws' provisions. Unlike the current regulations for private-sector FMLA and state employee family medical leave, the commissioner does not have to make reasonable efforts to ensure the regulations are compatible with the federal FMLA and its regulations.

Employee Contributions. The bill requires (1) the labor commissioner to begin collecting contributions to the FMLC Trust Fund by February 1, 2016 and (2) each covered employee to contribute a percentage of his or her weekly earnings to it in a manner the commissioner prescribes. The commissioner must determine the amount of contributions necessary to ensure the program's solvency. The bill also requires the commissioner to:

1. design and establish the process by which covered employees must contribute a portion of their salaries to the trust fund, including creating an information packet with the necessary paperwork for enrolling;

2. evaluate and establish a process that allows employers to credit their employee's contributions to the trust through payroll deposit; and

3. ensure that contributions are only used to provide FMLC benefits and pay for the program's expenses, including employee costs and the costs of implementing, maintaining advertising , and administering the program.

A covered employee can receive FMLC benefits 12 months after the labor commissioner starts collecting the employee's contributions, or at another time prescribed by the commissioner.

FMLC Benefits. The bill requires the labor commissioner, by February 1, 2017, to begin paying FMLC benefits to covered employees who file claims. The program must provide up to 12 weeks of FMLC benefits to covered employees during a 12-month period, which can be determined as a:

1. calendar year;

2. fixed 12-month period (e.g., a fiscal year or 12-month period measured from an employee's first day of employment);

3. 12-month period measured forward from an employee's first day of leave; or

4. rolling 12-month period measured backward from an employee's first day of leave.

Under the bill, a covered employee's weekly benefit is 100% of his or her weekly earnings, after state and federal tax deductions, averaged over the 52 calendar weeks immediately before the employee starts the leave. But, the benefit cannot be more than $1,000 per week. If the Internal Revenue Service determines that FMLC benefits are subject to federal income taxes and the employee chooses to have the taxes withheld from the benefits, the labor commissioner must deduct and withhold the amount required by the U.S. Internal Revenue Code in a manner consistent with state law.

The bill allows an employee to receive benefits for nonconsecutive hours of leave, but limits the benefits to an 8-hour minimum in any workweek.

Benefit Uses. The bill allows a covered employee to receive FMLC benefits for leave taken for any of the reasons allowed under the state's private-sector FMLA or family violence leave law, as amended by the bill. (The reasons state employees can take leave under the state employee family medical leave law are the same as under the private-sector FMLA). These allow leave:

1. upon the birth of the employee's son or daughter;

2. upon the placement of a son or daughter with the employee for adoption or foster care;

3. for a spouse's, sibling's, son's, daughter's, grandparent's, grandchild's, or parent's serious health condition;

4. for the employee's own serious health condition;

5. to serve as an organ or bone marrow donor;

6. for certain family members who are armed forces members undergoing treatment for an injury or illness incurred in the line of duty; and

7. for family violence victims to (a) seek medical care or psychological counseling, (b) obtain service from a victim services organization, (c) relocate due to family violence, or (d) participate in any civil or criminal proceeding related to, or resulting from, the family violence.

To qualify for benefits under the bill, the employee must notify the labor commissioner and his or her employer, if applicable, of the need for FMLC benefits. The commissioner must determine the notice's form and manner. If the commissioner requests it, the employer must also provide a health care provider's certification as required under the private-sector FMLA law.

The bill specifies that a covered employee is eligible for benefits even if he or she is unemployed. However, other provisions in the bill appear to limit the benefits to instances when a covered employee is taking leave from employment (see COMMENT).

3-5, 22 – The FMLC Trust Fund

The FMLC Trust Fund. The bill establishes the FMLC Trust Fund to provide FMLC benefits to covered employees taking leave under the state employee family medical leave law, the private-sector FMLA, or the family violence leave law, as amended by the bill. The trust's assets must be used for (1) FMLC benefits; (2) educating and informing people about the program; and (3) paying the trust's operational, administrative, and investment costs. It must be a non-lapsing fund held by the state treasurer separate and apart from all other moneys, funds, and accounts. Investment earnings credited to the fund must become part of it.

The bill makes the trust an instrumentality of the state and requires it to perform essential governmental functions under the bill. It must receive and hold all payments and deposits or contributions intended for it, plus any gifts, bequests, and endowments; federal, state, or local grants; any other funds from a public or private source; and all earnings until disbursed under the bill's provisions.

Under the bill, the amounts deposited in the trust are not state property, and the trust must not be construed as a state department, institution, or agency. Amounts in the trust cannot be comingled with state funds, and the state must not have any claim to or against, or interest in, the funds. If the fund is terminated by law, however, any unclaimed funds become assets of the state.

Any contract or obligation made by the trust is not a state debt or obligation, and the state does not have any obligation to a designated beneficiary or any other person because of the trust. All debts owed by the trust are limited to the amounts available to pay the debt deposited in the trust. The trust must exist (1) as long as it holds any deposits or has any obligations and (2) until it is terminated by law.

The law for determining when property held by a fiduciary is presumed abandoned applies to the trust's property. Thus, property in the trust is presumed abandoned unless, within seven years after it became payable or distributable, the owner has (1) increased or decreased the principal, (2) accepted payment of principal or income, (3) corresponded in writing with the fiduciary concerning the property, or (4) otherwise indicated an interest through a memorandum on file with the fiduciary.

State Treasurer's Duties. The bill makes the state treasurer responsible for receiving and investing moneys held by the trust. The trust can only receive cash deposits, and no depositor or designated beneficiary can direct the investments of any contributions or amounts in the trust other than the specific fund options provided by the trust.

The bill requires the treasurer, on behalf of the FMLC Trust Fund and for its purposes, to:

1. receive and invest the trust's funds in any instruments, obligations, securities, or property required under the bill;

2. procure insurance, if she deems it necessary, to protect the trust's property, assets, activities, deposits, or contributions; and

3. apply for, accept, and expend gifts, grants, or donations from public or private sources to carry out the trust's objectives.

The bill requires the treasurer to invest the trust's fund in a manner reasonable and appropriate to the trust's objectives, using the discretion and care of a reasonable person in similar circumstances with similar objectives. The treasurer must give due consideration to (1) rate of return; (2) risk; (3) term or maturity; (4) diversification of the trust's total portfolio; (5) liquidity; (6) projected disbursements and expenditures; and (7) expected payments, deposits, contributions, and gifts to be received.

The bill prohibits the treasurer from requiring the trust to invest directly in any obligations of the state or its political subdivisions, or in any other treasurer-administered investment or fund. The trust's assets must be continuously invested and reinvested in a manner consistent with the trust's objectives until they are disbursed under the labor commissioner's order or spent on the trust's operating expenses.

The bill places the treasurer's trust investments under the same oversight and requirements established in the statutes for treasurer-administered funds, including the Teachers' Pension Fund, the State Employee Retirement Fund, and the Connecticut Municipal Employees' Retirement Fund.

7 – FMLC Public Education Campaign

The bill requires the labor commissioner, in consultation with the state treasurer, to conduct a public education campaign to inform people and employers about the FMLC program. The campaign must at least include (1) information about the requirements for receiving benefits under the program and (2) how to apply for benefits and the circumstances under which benefits may be available. The bill allows the commissioner to use funds contributed to the FMLC Trust Fund for the public education campaign. Information distributed or available under the campaign must be in English, Spanish, and any other language the commissioner prescribes.

8 – Participation by Sole Proprietors and the Self-Employed

The bill allows someone who is self-employed or a sole proprietor to participate in the FMLC program and includes them in its definition of “covered employees.” Such a person must apply to the labor commissioner for enrollment in the program, in a form and manner she prescribes. The person can be enrolled if he or she meets the same requirements as other covered employees and initially enrolls in the program for at least three years. The person can re-enroll in the program for periods of at least one-year if he or she provides written notice to the labor commissioner and the re-enrollment begins immediately after a subsequent period of participation in the program (presumably, this means that a sole proprietor would have to re-enroll for at least three years if he or she had any breaks in enrollment).

Under the bill, a sole proprietor or self-employed person can withdraw from the program by submitting a written notice to the labor commissioner at least 30 days before his or her initial enrollment period expires, or at other times the commissioner may prescribe by rule.

9 & 11 – Complaints and Enforcement

The bill allows an FMLC participant aggrieved by the labor commissioner's denial of benefits to file a complaint with the labor commissioner. The commissioner can hold a hearing after receiving the complaint and must subsequently send each party a written copy of her decision. The commissioner can award the participant all appropriate relief, including any compensation or benefits to which the participant would have otherwise been eligible. Any party aggrieved by the commissioner's decision can appeal to the Superior Court under the Uniform Administrative Procedure Act. (The bill is unclear on whether a complainant has any further recourse if the commissioner chooses not to hold a hearing and thus is not required to issue a decision that can be appealed.)

Under the bill, any person or covered employee who willfully makes a false statement or misrepresentation regarding a material fact, or willfully fails to report a material fact, to obtain FMLC benefits is disqualified from participating in the program for one year. The labor commissioner can also seek repayment of any benefits paid (1) erroneously, (2) due to willful misrepresentation, or (3) before a FMLC claim was rejected. The bill gives the commissioner discretion to waive any repayments, in whole or in part, when they would be against equity and good conscience.

10 – Employer Notice Requirement

The bill requires all employers with at least two employees to notify their employees at the time of hiring and every year after:

1. of their entitlement to family and medical leave under the state employee family medical leave law, the private-sector FMLA, and the family violence leave law, as amended by the bill, and the terms under which the leave can be used;

2. that employer retaliation against an employee for requesting, applying for, or using family medical leave for which an employee is eligible is prohibited; and

3. that the employee can file a complaint with the labor commissioner for any violation of the bill's FMLC provisions, the state employee family medical leave law, the private-sector FMLA, or the family violence leave law, as amended by the bill.

Employers can meet this requirement by displaying a poster with the above information in a conspicuous place in their place of business that is accessible to employees. The poster must be in English and Spanish.

(The bill requires employers to meet this notice requirement once it is enacted; however, the bill's changes to the various current medical leave laws are not effective until October 1, 2015.)

12 – Severability and Exceptions

The bill specifies that its FMLC provisions are severable, and if any are found to contravene state or federal law, the remainder must remain in full force and effect. It also specifies that nothing in the FMLC provisions (1) prevents employers from providing more expansive benefits, (2) diminishes any rights provided under a collective bargaining agreement, or (3) preempts or overrides the terms of any collective bargaining agreement in effect before the bill is enacted.

13 – Report Requirement

Beginning by January 1, 2016, the bill requires the commissioner to submit an annual report to the Labor and Appropriations committees on (1) the projected and actual participation in the program; (2) premium rates and balances in the trust (it is unclear what “premium rates” are under the bill); (3) the size of covered employees' employers; (4) the reasons why covered employees are receiving FMLC benefits; (5) the success of the commissioner's outreach and education efforts; and (6) demographic information on covered employees, including their gender, age, town of residence, and income level.

CHANGES TO CURRENT UNPAID LEAVE LAWS

14 – State Employee Family Medical Leave

Current law allows state employees to take up to 24 weeks of unpaid leave over a two-year period. The bill instead allows for 12 weeks of leave over a one-year period, which can be compensated through the bill's FMLC program. Thus, it reduces the amount of leave that could potentially be taken in one year, because under current law an employee could choose to take all 24 weeks of leave in the first year of a two-year window. It also expands the family members for whom a state employee can take leave to include the employee's adult children, siblings, grandparents, and grandchildren. All of these family members include those related by adoption. Siblings, grandparents, and grandchildren also include those related by marriage. (Current law and the bill do not allow an employee to take leave for the employee's son in-law or daughter in-law).

State Employee Military Caregiver Leave. The law allows state employees to take a one-time benefit of up to 26 weeks of unpaid leave for certain family members who are armed forces members undergoing treatment for an injury or illness incurred in the line of duty. The bill allows employees to receive up to 24 work-weeks of FMLC benefits out of those 26 weeks. It also expands the family members for which the employee can take the leave to include the employee's (1) siblings and grandparents (regardless of their status as next of kin); (2) grandchildren related by blood, adoption, or marriage; and (3) siblings and grandparents related by marriage.

15-19 – Private Sector FMLA

Covered Employers. Current law requires private-sector employers with at least 75 employees to provide eligible employees with up to 16 weeks of unpaid family medical leave during a 24-month period. The bill reduces this employee threshold from 75 to two and includes the state, municipalities, boards of education, and private or parochial elementary or secondary schools (all of whom are currently excluded from the law). It requires them to provide up to 12 weeks of family medical leave during a 12-month period, which can be compensated through the bill's FMLC program, and subjects them to the private-sector FMLA's other provisions, as amended by the bill.

Employee Eligibility. Under current law, private sector employees are eligible for leave once they work for their employer for at least 12 months and 1,000 work-hours. The bill instead makes such an employee eligible if he or she earned at least $9,300 from one or more employers over the 12 months before starting their leave. It is unclear how this eligibility requirement would apply to state employees who are only required to be permanent state employees under the state employee family medical leave law (see COMMENT).

The bill also expands the family members for whom an employee can take leave to include the employee's adult children, siblings, grandparents, and grandchildren. All of these family members include those related by adoption. Siblings, grandparents, and grandchildren also include those related by marriage. (Current law and the bill do not allow an employee to take leave for the employee's son in-law or daughter in-law.) The current private-sector FMLA law, unchanged by the bill, allows an eligible private-sector employee to take leave for a parent in-law. However, it is unclear if a state employee could take leave for a parent in-law under the bill, as it is not allowed under the state employees family medical leave law (see COMMENT).

Private-Sector Employee Military Caregiver Leave. The law allows employees covered by the private-sector FMLA to take a one-time benefit of up to 26 weeks of unpaid leave for certain family members who are armed forces members undergoing treatment for an injury or illness incurred in the line of duty. The bill allows these employees to receive up to 12 work-weeks of FMLC benefits while out on this leave. It is unclear how many weeks of FMLC benefits a state employee could receive for military caregiver leave under the bill, as it provides for up to 24 weeks under the state employee family medical leave law and up to 12 weeks under the private-sector FMLA (see COMMENT).

It also expands the family members for which the employee can take the leave to include the employee's (1) siblings and grandparents (regardless of their status as next of kin); (2) grandchildren related by blood, adoption, or marriage; and (3) siblings and grandparents related by marriage.

Employer-provided Paid Leave. Current law lets an employer require employees to use their accrued employer-provided paid vacation, personal, family, medical, or sick leave during the time they are out on FMLA leave. Employers can no longer require this under the bill. By law, and unchanged by the bill, employees can opt to use their employer-provided paid leave while they are out on FMLA leave.

As under current law, an employee's use of employer-provided paid leave counts toward his or her FMLA leave; however, the bill allows employees to receive FMLC benefits to make up the difference between their available employer-provided paid leave and the 12 weeks of leave allowed under the bill. (It is unclear if an employee can simultaneously receive paid sick time from his or her employer and FMLC benefits while on FMLA leave.)

Current law requires employers to allow their employees to use up to two weeks of their employer-provided paid sick leave for a spouse's or child's serious health condition or the birth or adoption of a child. The bill expands this requirement to include serious health conditions of siblings, grandparents, and grandchildren (all including in-laws).

21 – Family Violence Leave

Current law requires employers with at least three employees to allow employees who are family violence victims to take paid or unpaid leave to (a) seek medical care or psychological counseling, (b) obtain service from a victim services organization, (c) relocate due to family violence, or (d) participate in any civil or criminal proceeding related to, or resulting from, the family violence. The bill lowers the employer's employee threshold from three to two employees and allows the leave to include benefits paid under the FMLC program.

The law, unchanged by the bill, allows employers to limit family unpaid leave to 12 days per calendar year. It also specifies that family violence leave does not count against any other leave provided under state or federal law. It appears that this will allow family violence victims to take family violence leave in addition to the 12 weeks of leave allowed under the bill, although any FMLC benefits an employee receives while on family violence leave will be subject to the bill's 12 benefit-week limit.

MUNICIPAL EMPLOYEE FAMILY MEDICAL LEAVE

Under current law, municipal employees are generally only eligible for family medical leave under the federal FMLA. The federal law provides 12 weeks of unpaid leave over a 12-month period to employees who worked for their employer for at least 12 months and 1,250 work-hours over the 12 months immediately preceding their leave. Starting October 1, 2015, the bill brings these employees under the state's private-sector FMLA, as amended by the bill. Thus, to be eligible for leave, they will only have to have earned $9,300 from any employer over the 12 months preceding their leave.

Current state law also allows certain municipal employees to take family medical leave under circumstances that are not allowed under federal law. Under these exceptions:

1. municipal employees who meet federal eligibility requirements can take leave to be an organ or bone marrow donor (as is allowed under state law) and

2. school paraprofessionals who work for their employer for at least 12 months and 950 work-hours are allowed the same leave as provided under the federal FMLA (which requires at least 1,250 work-hours).

The bill eliminates these two exceptions upon its enactment. Between the bill's enactment and October 1, 2015, when the bill extends the state's private-sector FMLA to these employees, (1) municipal employees will not be able to take leave to be an organ or bone marrow donor and (2) school paraprofessionals will have to have worked 1,250 hours for their employer, instead of 950, to qualify for leave.

COMMENT

Conflicting Provisions

FMLC Benefits for the Unemployed. The bill requires a covered employee to be eligible for FMLC benefits even if he or she is unemployed ( 8). However, it is unclear if an unemployed person could receive benefits because the bill also specifies that FMLC benefits are provided “for leave taken” (presumably from employment) and that FMLC Trust Fund's purpose is to provide benefits for covered employees “who take leave from their employment” ( 2 and 3). Presumably, an unemployed person would not be considered to be taking leave from employment. In addition, it is unclear how the amount of leave time would be determined or verified for a covered employee who is not taking leave from employment.

State Employee Eligibility. It is unclear what eligibility requirements would apply to state employees under the bill. The bill covers state employees under the state employee family medical leave law and the private-sector FMLA. This creates two parallel laws covering the same group of employees. The state employees' law requires an employee to be a permanent employee, as defined in statute. However, the private-sector FMLA only requires an employee to have earned at least $9,300 over the 12 months preceding his or her leave.

State Employee Parents In-Law. It is unclear whether state employees under the bill would be able to take leave for a parent in-law's serious illness. The current private-sector FMLA law, unchanged by the bill, allows an eligible private-sector employee to take leave for a parent in-law. The bill extends this law to cover state employees. Under the bill, however, state employees are also covered by the state employee family medical leave law, which does not allow leave for a parent in-law.

State Employee Military Caregiver Leave FMLC Benefits. It is unclear how many weeks of FMLC benefits a state employee could receive for military caregiver leave under the bill, as it provides for up to (1) 24 weeks under the state employee family medical leave law and (2) 12 weeks under the private-sector FMLA.

COMMITTEE ACTION

Labor and Public Employees Committee

Joint Favorable Substitute

Yea

9

Nay

3

(03/12/2015)