Title: Assessing Rhode Island's Temporary Caregiver Insurance Act: Insights form a Survey of Employers

Authors: Ann Bartel, Maya Rossin-Slater, Christopher Ruhm, Jane Waldfogel

Posted: May 4, 2016

Abstract:  This report provides new evidence on Rhode Island's Temporary Caregiver Insurance (TCI) law, which took effect in January 2014, based on a survey of small and medium-sized businesses in the food services and manufacturing sectors in Rhode Island, Connecticut, and Massachusetts that we carried out in December 2013 (just before the law came into effect) and in January/February 2015 (one year after the law came into effect). We collected information about firm characteristics and productivity, employee life events and work flow, and employerprovided benefits. Comparing Rhode Island employers pre-and post-law to Massachusetts and Connecticut employers over the same time period, we found little evidence of significant impacts of the law on employers (although we note that the sample size for these estimates was small; 104 employers in Rhode Island, and 133 in the other two states combined). We also asked Rhode Island employers directly about their views towards TCI one year after it came into effect and found that a majority of the 213 Rhode Island employers interviewed in 2015 support the new law. Thus, our results suggest that laws like Rhode Island's TCI may not have significant impacts on small and medium-sized employers and could garner support by such employers once they have experienced them.

Download the brief: Assessing Rhode Island's Temporary Caregiver Insurance Act: Insights form a Survey of EmployersAssessing Rhode Island's Temporary Caregiver Insurance Act: Insights form a Survey of Employers

In January 2014, Rhode Island became the third state in the nation (after California and New Jersey) to implement a paid family leave law. Rhode Island’s law, the Temporary Caregiver Insurance (TCI) Act, provides up to four weeks of paid leave to employees who need to take time off work to bond with a newborn, adopted child, or foster child or to take care of a seriously ill child, spouse, partner, parent, parent-in-law, or grandparent. Funded through payroll contributions by employees, TCI leave is job-protected and paid as a percentage of the employee's prior earnings, with a maximum benefit that is $795/week as of December 2015.

As other states around the nation consider similar laws, an open question is what impact these types of programs might have on employers, and particularly small businesses, which sometimes are exempt from such legislation (as is the case, for example, with the federal Family and Medical Leave Act, FMLA). How are these firms affected by paid family leave legislation? And how do they view such laws?

To answer these questions, we surveyed a sample of small and medium-sized businesses with 10-99 employees in Rhode Island, both before and after the TCI law came into effect. We focusedon small and medium-sized firms because less is known about their experiences with paid leave and because they might face more challenges dealing with employee absences than would larger firms. We focused on firms in two specific sectors, food services and manufacturing, because these sectors contain relatively large numbers of small and medium-sized employers in our treatment and comparison states. Our before- and after-design provides evidence on whether any outcomes changed for firms after the implementation of RI's law in January 2014. Since other factors may have changed over that time period as well, we also surveyed firms in two "control" states (Massachusetts and Connecticut). These states are adjacent to Rhode Island, and have similar labor markets and demographics, and thus provide information about how outcomes might have changed during this time period for Rhode Island firms in the absence of the law.

This report provides a brief overview of our data and methods, and main results. We provide further information about our survey instrument in Appendix 1 and about our sample and survey methods in Appendix 2.