Guest MINDSETTER™ Rep. Nunes: Retool RI’s TDI Program
Sunday, April 02, 2017
Paid sick time. Everyone at some point in their lives will need a day off due to illness. It's unavoidable. The real question at hand is whether Government should mandate that employers fund the cost of sick time. The increased cost to those companies that do not currently offer such a benefit will certainly lead to a depression of actual wages as companies struggle to compensate and maintain profitability. As a business owner I also feel an obligation to provide for my employees with a benefit that allows them to recoup wages that would have been earned absent sickness or caretaking. There may be another way to address both issues.
I would propose a complete retooling of Rhode Island's TDI program. Currently, there are only a couple of states that have statutory temporary disability insurance. This year, RI assesses a tax of 1.2% on your first $68,100.00 of earnings. This means that if you make $68,100.00 or more, you pay a whopping $817.20 per year into the TDI fund. This fund is completely employee funded and the rate self-regulates to compensate for any shortfall. As of recent years, this fund has been expanded to be paid out for temporary caregiving as well.
The TDI retooling proposal would include individualized worker savings accounts that assess the same percentage as today's rate of 1.2% of your first $68,100.00 of salary. The difference would be that the amount saved would go directly into a workers individual total. So, if you start working at 16 years old, and make $10,000.00 per year, you would contribute $120.00 into your own TDI/TCI/and Sick time savings account. As the years go on, and your working career expands, and you hopefully make more money, your account follows you and grows as you approach later years where sickness and temporary disabilities may become more frequent.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTOne part of the plan that would keep a portion of the insurance aspect would be to allow tax exempt transfer of a portion of your fund balance with others who may be in need. So, if someone in your workplace has a catastrophic injury off the job, coworkers could chip in a portion of their balance if they choose. Or, a family member could transfer some of their balance to a sick relative, etc.
This proposal would have several clear benefits. First, it would root out any potential fraud in the TDI system since the individual would only be drawing off their own account. Second, it would alleviate the cost to business owners of funding proposed mandatory earned sick time. Third, it allows those who have paid into TDI for years and never made a claim to capture a benefit from the money they are already paying. And fourth, there is also the possibility of cashing out a portion of your individual fund upon retirement.
I am sure that this plan will have its opponents. There have been proposals in the past to eliminate TDI since we are an outlier in this respect. I believe that this proposal will lend fundamental fairness to this employee deduction and offer a benefit to all workers without creating a new burden for our small businesses. If we truly care about our workers, we should give them access to the money that the TDI fund is currently taking. With this proposal, we will turn something that makes us an outlier into something that makes us an innovator.
Jared Nunes is the State Representative for District 25
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