Frequently Asked Questions - Rhode Island’s Temporary Caregiver Insurance Program
Rhode Island’s Temporary Caregiver Insurance program (TCI) became effective Jan. 5, 2014. The TCI program provides up to four weeks of wage replacement benefits to workers who need to take time off from work to bond with a new child or to care for a seriously ill child, spouse or family member.
This document is intended to answer any questions small employers might have about Rhode Island’s TCI program and its effects on small business owners and their workers.
What is Temporary Caregiver Insurance?
- The TCI program is an extension of the state’s Temporary Disability Insurance (TDI) program, which provides income support to individuals who are out of work because of a non-work related illness or injury. Rhode Island was the first state to establish a Temporary Disability Insurance program in 1942.
- The Temporary Caregiver Insurance program enables Rhode Island workers to take up to four weeks of paid time away from work in order to care for a seriously ill family member or bond with a new child.
- Family members include children, spouses, domestic partners, parents, parents-in-law or grandparents. A parent can take leave to bond with a newborn, newly adopted child or foster child.
Which employers are covered by the law?
Temporary Caregiver Insurance applies to all employers, regardless of size. While the federal Family Medical Leave Act (FMLA) and the Rhode Island Parental and Family Medical and Leave Act (RIPFMLA) apply to employers with 50 or more employees, the new Temporary Caregiver Insurance law applies to all Rhode Island employers. If an employee is eligible for leave under both the FMLA/RIPFMLA and the Temporary Caregiver Insurance law, the leaves may run concurrently.
What are an employer’s obligations under the Temporary Caregiver Insurance program?
- Under TCI, employees who take leave are guaranteed job protection and continuation of health insurance coverage. Employers must hold the employee’s position until he or she returns to work, or must offer a comparable position with equivalent seniority, status, employment benefits, pay, and other terms and conditions. Employers are also obligated to continue the employee’s health coverage while they are on leave.
- Employers are not responsible for paying their employees when they are on leave through TCI—partial wage replacement during leave is funded entirely by employee payroll deductions. Employers must continue to deduct TDI payments in the way they do now.
Will employers have to pay employees’ salaries while they’re on leave?
- No. The TCI program, administered by the Rhode Island Department of Labor and Training’s Temporary Disability Insurance Division, is financed entirely by employee payroll deductions. Employers do not have to pay employees’ salaries while they are on leave. Many small businesses that previously could not afford to offer paid leave to their employees can now offer the benefit through the TCI program. This helps small businesses compete for the best employees, and gives employers peace of mind that they are doing what’s best for their workers. Employers that already offer paid family leave can expect to see cost savings. What’s more, they can also choose to continue to offer paid family leave, or they may supplement their employees’ contributions to the TCI program.
- Rhode Island workers pay a small tax on income to finance the TCI/TDI program, resulting in a maximum annual contribution of $736.80. The current withholding rate is 1.2% of a worker’s first $62,700 in earnings. Weekly TDI benefits total approximately 60% of an employee’s weekly wage, up to a maximum weekly benefit of $752. Beginning Jan. 1, 2014, private-sector employees may collect these temporary caregiver benefits for a maximum of four weeks within a 12-month period.
What effects does Temporary Caregiver Insurance have on businesses?
- Based on the experience of businesses in California and New Jersey, states that have paid family medical leave programs in place, such a program is unlikely to have a significant effect on businesses in Rhode Island. The program is entirely funded by employees; employers do not have to pay employees’ salaries while they are on leave. Many small businesses that previously could not afford to offer paid leave to their employees can offer the benefit through the TCI program.
- A recent poll conducted for Small Business Majority found a plurality of small businesses support publicly administered family and medical leave insurance pools paid with payroll contributions by employees and employers. More small business owners support (45%) than oppose (41%) creating publicly administered family and medical leave insurance pools funded by contributions shared by employees and employers—with each contributing just one-fifth of 1% of an employee’s wages.
- What’s more, a majority of small businesses have some type of policy—formal or informal—in place when it comes to family medical leave—time an employee would take to care for a family member with a serious illness or caregiving need. More than two-thirds of small business owners have either a formal written policy, a consistent but not written policy or informal policy provided on a case-by-case basis to provide family medical leave. 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.
What effects does Temporary Caregiver Insurance have on employees?
- Employees who need to take leave to care for a loved one or welcome a new child would be able to do so without having to worry about whether they will be able to pay their bills or keep their jobs. Under TCI, employees who take leave are guaranteed job protection. Employers must hold the employee’s position until he or she returns to work, or must offer a comparable position with equivalent seniority, status, employment benefits, pay, and other terms and conditions.
Do other states have similar programs?
- Yes. California and New Jersey have similar family leave insurance programs. California’s Paid Family Leave (PFL) program has been in effect for 10 years. New Jersey’s Family Leave Insurance (FLI) program has been in effect for 5 years. Both programs have been implemented successfully. Rhode Island has also just instituted a paid family leave program through its temporary disability insurance program. Evidence suggests that neither California nor New Jersey’s programs have imposed a burden on businesses, and both have had significant benefits for employees. Moreover, many employers find that the program is actually good for their businesses, boosting employee loyalty and lowering turnover.