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S 2927Worker Benefits

Labor and Labor Relations - Temporary Disability Insurance - General Provisions

Starting January 1, 2027, all Rhode Island state employees will be mandatorily covered by the Temporary Disability Insurance (TDI) program.

Held for study
Population
Affected
15
Introduced Mar 4, 2026Committee Senate Labor & Gaming

Plain-English Summary

This legislation mandates that beginning January 1, 2027, the State of Rhode Island must participate in the state's Temporary Disability Insurance (TDI) program. Consequently, the definition of "employment" is expanded to include all service performed by individuals employed by the state, regardless of whether they are full-time, part-time, seasonal, or temporary. State employees will become eligible for TDI benefits, and the state will be required to manage payroll deductions and remit contributions to the TDI fund, overriding any existing collective bargaining agreements that might currently exclude this coverage.

For younger readers

This new law changes the rules for people who work for the State of Rhode Island. Starting in the year 2027, these workers will be part of a program called Temporary Disability Insurance, or TDI. TDI is a safety net that pays people some money if they get sick or hurt and cannot go to work for a while. Before this law, state workers were not automatically part of this program. Now, money will be taken out of their paychecks to pay for this insurance, just like it is for many other workers in the state.

Who & Where It Applies

Impacted groups
State Employees (Full-time, Part-time, Seasonal, Temporary)Rhode Island Department of Labor and TrainingPublic Sector Labor UnionsRhode Island Department of AdministrationOffice of the General Treasurer
Impacted communities
All

Constitutional & Fiscal Check

There is a potential constitutional risk regarding the Contracts Clause (Article I, Section 10). Section 2(f) of the bill explicitly states that the provisions apply "notwithstanding the provisions of any collective bargaining agreement entered into prior to the effective date." While states have police powers, legislation that substantially impairs existing contractual obligations—particularly those to which the state is a party—can be subject to heightened judicial scrutiny to determine if the impairment is reasonable and necessary.

Estimated cost
Amount unknown
Estimated revenue
Amount unknown

Bill Analysis

Both viewpoints
For Progressives
  • Expands the social safety net by ensuring that all public sector employees, including vulnerable seasonal and temporary workers, have access to disability insurance.
  • Eliminates disparities between private and public sector workers regarding access to state-managed disability benefits, promoting equity in the workforce.
  • Strengthens the solvency of the Temporary Disability Insurance fund by adding a large, stable pool of contributors to the system.
  • Overrides existing collective bargaining agreements, potentially undermining the power and autonomy of labor unions to negotiate their own benefit packages.
  • Imposes a mandatory payroll tax (deduction) on workers who may already have adequate sick leave protections, effectively reducing their take-home pay without adding perceived value.
  • Creates a "one-size-fits-all" approach that removes the flexibility for workers to choose benefit structures that might better suit their specific economic needs.
For Conservatives
  • potentially reduces the burden on the state budget by shifting the cost of long-term sick leave from direct state payroll (sick time) to the employee-funded TDI pool.
  • Standardizes employment rules by treating public sector employees the same as private sector employees, removing special exemptions for government workers.
  • Ensures the long-term financial stability of the TDI fund by expanding the base of contributors without raising tax rates on private businesses.
  • Expands government bureaucracy by requiring new administrative procedures and payroll systems within state departments to manage these deductions.
  • Disregards the sanctity of contracts by explicitly nullifying provisions in existing collective bargaining agreements entered into prior to the law's effective date.
  • Mandates participation in a government program, removing the freedom of the employer (the state) and employees to determine their own compensation arrangements.

Votes

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Full Bill Text

Changes to existing Rhode Island law · 29 additions

SECTION 1. Section 28-39-2 of the General Laws in Chapter 28-39 entitled "Temporary Disability Insurance — General Provisions" is hereby amended to read as follows: 28-39-2. Definitions. The following words and phrases, as used in chapters 39 — 41 of this title, have the following meanings unless the context clearly requires otherwise:

(1) “Average weekly wage” means the amount determined by dividing the individual’s total wages earned for services performed in employment within his or her base period by the number of that individual’s credit weeks within the base period.

(2) “Base period” with respect to an individual’s benefit year when the benefit year begins on or after October 7, 1990, means the first four (4) of the most recently completed five (5) calendar quarters immediately preceding the first day of an individual’s benefit year; provided, that for any individual’s benefit year when the benefit year begins on or after October 4, 1992, and for any individual deemed monetarily ineligible for benefits under the “base period” as defined in this subdivision, the department shall make a re-determination of entitlement based upon an alternate base period that consists of the last four (4) completed calendar quarters immediately preceding the first day of the claimant’s benefit year. Notwithstanding anything contained to the contrary in this subdivision, the base period shall not include any calendar quarter previously used to establish a valid claim for benefits; provided, however, that the “base period” with respect to members of the United States military service, the Rhode Island National Guard, or a United States military reserve force, and who served in a United States declared combat operation during their military service, who file a claim for benefits following their release from their state or federal active military service and who are deemed to be monetarily ineligible for benefits under this section, shall mean the first four (4) of the most recently completed five (5) calendar quarters immediately preceding the first day the individual was called into that state or federal active military service; provided, that for any individual deemed monetarily ineligible for benefits under the “base period” as defined in this section, the department shall make a re-determination of entitlement based upon an alternative base period that consists of the last four (4) completed calendar quarters immediately preceding the first day the claimant was called into that state or federal active military service. Notwithstanding any provision of this section of the general or public laws to the contrary, the base period shall not include any calendar quarter previously used to establish a valid claim for benefits.

(3) “Benefit” means the money payable, as provided in chapters 39 — 41 of this title, to an individual as compensation for his or her unemployment caused by sickness.

(4) “Benefit credits” means the total amount of money payable to an individual as benefits, as provided in § 28-41-7.

(5) “Benefit rate” means the money payable to an individual as compensation, as provided in chapters 39 — 41 of this title, for his or her wage losses with respect to any week during which his or her unemployment is caused by sickness.

(6) “Benefit year” with respect to any individual who does not already have a benefit year in effect, and who files a valid claim for benefits as of November 16, 1958, or any later date, means fifty-two (52) consecutive calendar weeks, the first of which shall be the week containing the day as of which he or she first files that valid claim in accordance with regulations adopted as subsequently prescribed; provided, that for any benefit year beginning on or after October 7, 1990, the benefit year shall be fifty-three (53) consecutive calendar weeks if the subsequent filing of a new valid claim immediately following the end of a previous benefit year would result in the overlapping of any quarter of the base period of the prior new claim. In no event shall a new benefit year begin prior to the Sunday next following the end of the old benefit year.

(i) For benefit years that begin on or after July 1, 2012, an individual’s benefit year will begin on the Sunday of the calendar week in which an individual first became unemployed due to sickness and for which the individual has filed a valid claim for benefits.

(7) “Board” means the board of review as created under chapter 16.1 of title 42.

(8) “Calendar quarter” has the same definition as contained in chapter 42 of this title.

(9) “Credit week” means any week within an individual’s base period in which that individual earns wages amounting to at least twenty (20) times the minimum hourly wage as defined in chapter 12 of this title, for performing services in employment for one or more employers subject to chapters 39 — 41 of this title.

(10) “Director” means the director of the department of labor and training.

(11) “Employee” means any person who is or has been employed by an employer subject to chapters 39 — 41 of this title and in employment subject to those chapters.

(12) “Employer” means any employing unit that is an employer under chapters 42 — 44 of this title.

(13) “Employing unit” has the same definition as contained in chapter 42 of this title and includes any governmental entity that elects to become subject to the provisions of chapters 39 — 41 of this title, in accordance with the provisions of §§ 28-39-3.1 and 28-39-3.2.

(14) “Employment” has the same definition as contained in chapter 42 of this title and notwithstanding any provision of the general laws to the contrary, for purposes of this chapter the term “employment” shall include service performed by any individual in the employ of the State of Rhode Island, including all departments, agencies, boards, commissions, and instrumentalities thereof, whether such service is performed on a full-time, part-time, seasonal, or temporary basis, unless specifically excluded under this chapter..

(15) “Employment office” has the same definition as contained in chapter 42 of this title.

(16) “Fund” means the Rhode Island temporary disability insurance fund established by this chapter.

(17) “Partial unemployment due to sickness.” For weeks beginning on or after January 1, 2006, an individual shall be deemed partially unemployed due to sickness in any week of less than full-time work if he or she fails to earn in wages for services for that week an amount equal to the weekly benefit rate for total unemployment due to sickness to which he or she would be entitled if totally unemployed due to sickness and eligible.

(i) For the purposes of this subdivision and subdivision (22) of this section, “Wages” includes only that part of remuneration for any work, which is in excess of one-fifth (1/5) of the weekly benefit rate for total unemployment, rounded to the next lower multiple of one dollar ($1.00), to which the individual would be entitled if totally unemployed and eligible in any one week, and “services” includes only that part of any work for which remuneration in excess of one- fifth (1/5) of the weekly benefit rate for total unemployment, rounded to the next lower multiple of one dollar ($1.00), to which the individual would be entitled if totally unemployed and eligible in any one week is payable; provided, that nothing contained in this paragraph shall permit any individual to whom remuneration is payable for any work performed in any week in an amount equal to, or greater than, his or her weekly benefit rate to receive benefits under this subdivision for that week.

(18) “Reserve fund” means the temporary disability insurance reserve fund established by § 28-39-7.

(19) “Services” means all endeavors undertaken by an individual that are paid for by another or with respect to which the individual performing the services expects to receive wages or profits.

(20) “Sickness.” An individual shall be deemed to be sick in any week in which, because of his or her physical or mental condition, including pregnancy, he or she is unemployed and unable to perform his or her regular or customary work or services. (21)(i) “Taxes” means the money payments required by chapters 39 — 41 of this title, to be made to the temporary disability insurance fund or to the temporary disability insurance reserve fund.

(ii) Wherever and whenever in chapters 39 — 41 of this title, the words “contribution” and/or “contributions” appear, those words shall be construed to mean the “taxes,” as defined in this subdivision, that are the money payments required by those chapters to be made to the temporary disability insurance fund or to the temporary disability insurance reserve fund.

(22) “Wages” has the same definition as contained in chapter 42 of this title; provided, that no individual shall be denied benefits under chapters 39 — 41 of this title because his or her employer continues to pay to that individual his or her regular wages, or parts of them, while he or she is unemployed due to sickness and unable to perform his or her regular or customary work or services. The amount of any payments, whether or not under a plan or system, made to or on behalf of an employee by his or her employer after the expiration of six (6) calendar months following the last calendar month in which the employee performed actual bona fide personal services for his or her employer, shall not be deemed to be wages either for the purpose of paying contributions thereon under chapter 40 of this title, or for the purpose of being used as a basis for paying benefits under chapter 41 of this title.

(23) “Week” has the same definition as contained in chapter 42 of this title.

SECTION 2. Chapter 28-41 of the General Laws entitled "Temporary Disability Insurance — Benefits" is hereby amended by adding thereto the following section: 28-41-43. Mandatory coverage of state employees.

(a) Notwithstanding the provisions of § 28-39-3 to the contrary, effective January 1, 2027, the State of Rhode Island shall be deemed an employer for purposes of this chapter and shall participate in the temporary disability insurance program administered by the department of labor and training.

(b) All employees of the State of Rhode Island shall be covered under the temporary disability insurance program and shall be eligible for benefits in the same manner and subject to the same conditions as other covered employees under this chapter.

(c) The state shall remit employer and employee contributions to the temporary disability insurance fund in accordance with any applicable provision of this chapter or title 28.

(d) Payroll deductions for employee contributions shall be made in the same manner as required of other employers subject to this chapter.

(e) The director of the department of labor and training is authorized to promulgate rules and regulations necessary to implement the provisions of this section.

(f) The provisions of this section shall apply notwithstanding the provisions of any collective bargaining agreement entered into prior to the effective date of this section; provided, however, that nothing herein shall prohibit the negotiation of supplemental disability benefits through collective bargaining.

(g) The general treasurer, in coordination with the department of administration and the department of labor and training, shall take all administrative steps necessary to ensure implementation of this section, including modification of payroll systems and contribution reporting mechanisms.

SECTION 3. This act shall take effect on January 1, 2027, and shall apply to wages earned on or after that date.