Authority recommends pursuing litigation for older unpaid contributions and using TSI’s network on contingency

Staff for the CT Paid Leave Authority proposed expanding fund-recovery tactics to include litigation for older unpaid employer and self-employed liabilities and recommended a sole-source path using the authority’s current collections vendor, TSI Transworld Systems Corporate, to pursue cases through law firms on a contingency basis.

Walter, who led the fund-recovery briefing, said the program’s outreach and collection efforts over the past three years have yielded just over $10 million in recoveries, but many accounts remain delinquent. "We're looking to take the next step on the outstanding balances due and look to make recommendations to pursue the debts through governmental litigation services," he said. Staff described the standard workflow: quarterly notices, a one-month grace period, repeated installment notices, internal outreach, and escalation to a third-party collection agent (TSI) before litigation is considered.

Staff presented portfolio counts and dollar ranges: 4,751 accounts rolled up to 9,574 debt notices; many notices are small (single-digit to low thousands), with dozens of accounts owing larger sums and 27 accounts showing amounts of $30,000 or greater; staff estimated roughly $6.291 million in rolled-up debts (not including penalty placeholders). An aging snapshot showed thousands of notices at various stages from current (1–6 months) through the oldest (24–30 months).

Staff recounted consultations with retained counsel and the attorney general's office and said the latter would not handle routine collections for the program; state marshals were not a practical collection route without a prior court judgment. TSI, staff said, has an established public-sector recovery practice and can place litigation through its network of law firms on contingency, meaning there would be no upfront legal fee to the authority.

Staff proposed bringing a sole-source procurement for litigation services to the full board in March to authorize litigation activity, with an anticipated contract term under consideration of up to three years to allow ramp-up and value realization. Staff emphasized that litigation placements would be authorized by the authority on a case-by-case basis and that the vendor has already produced recoveries: staff reported TSI-collected amounts of about $1.75 million from prior activity on the inventory.

Board members asked about contract length and governance; staff confirmed they would seek board transparency even where bylaws might not require a vote. No procurement decision was made during this meeting; staff will present a formal recommendation to the board.