In June of 2019, Connecticut passed the State’s Paid Family Medical Leave Act (CT PFMLA), which introduced employers in the state to an upcoming Connecticut Paid Leave (CTPL) insurance program to be funded by employees by way of a mandatory payroll deduction. While paid leave accrued under the act won’t be available to employees until January of 2022, categorizing the program as “upcoming” is no longer as accurate in terms of the implementation timeline.
State registration opened to employers on November 1st of this year, and payroll deductions must start on January 1, 2021. It’s important for employers in Connecticut to be prepared for their legal obligations under the CT PFMLA and to stay ahead of compliance issues.
“No one should have to choose between caring for their family when they need it most, and paying their bills,” said Governor Lamont in a September press release. “This program was put together thoughtfully to ensure that working families in our state don’t have to make that tough choice.”
Employer’s Legal Obligations
CTPL program participation is mandatory for all CT employers with 1 or more employees; however, private plans may be offered in the CTPL’s stead as long as the plan meets the approval standards and is granted following a submission of an application for a program exemption through the CT Paid Leave Authority. Self-employed individuals and sole proprietorships may also voluntarily elect to participate in the program.
Private Plan Requirements for Exemption – Private plans are subject to additional requirements as set forth by the CT Paid Leave Authority, may not ask employees to meet additional requirements or conditions above those asked by the CTPL program, nor may they take out employee deductions that are higher than those designated by the CTPL program. Private plans be approved by a majority of your employees, must apply to all current and future employees, and must cover all employees through the duration of their employment. Private plans must offer benefit time that is at least equal to the number of weeks, and wage benefits at least equal to the level the wage replacement, provided through the CTPL program.
State Registration – In order to properly remit your quarterly contributions through the program, employers must register with the CT Paid Leave Authority by December 31, 2020, before payroll deductions begin on January 1, 2021. Registration opened on November 1st of this year.
It’s important to note that this is required even if your business plans to offer a private plan. Additionally, the CT Paid Leave Authority will notify you upon set-up that, while you may log in to your account at any time, full functionality will not be available until December 1, 2021, due to the overall timeline of the program’s implementation.
Notification – Employers must provide program notification to employees at the time of hiring and on an annual basis beginning July 1, 2022. The notice should include information about their entitlement to family and medical leave and family violence leave; their right to file a benefits claim; a statement to inform them that retaliation against an employee for requesting or using family medical leave is prohibited; and their right to file a violation complaint with the Labor Commissioner.
Employee Contributions – Employers are required to withhold employee contributions of 0.5% of the employee’s wages, up to the Social Security contribution base (which is $142,800 in 2021), beginning January 1, 2021. The program does not require an employer match.
Filing Obligations – Employers must file collected contributions with the CT Paid Leave Authority on a quarterly basis. The CT Paid Leave Authority and Office of the Treasurer will subsequently apply and manage your contribution as an investment in the authority trust fund. The first quarter contribution will be due to the CT Paid Leave Authority on March 31, 2021, with the following 2021 contributions due on June 30, September 30, and December 31.
Leave Requests – Employees will be responsible for applying for time away from work with their employer and for applying for paid leave benefits through the CT Paid Leave Authority. Employers may be required to certify the employee’s current compensation level and confirm their need for leave.
Payment of Leave to Employees – If approved, payment will go to the employee directly from the CT Paid Leave Authority. Compensation will be provided on a sliding scale, with lower-paid workers receiving the highest benefit. The maximum benefit available is 95% of regular weekly wages, which may include salary or hourly pay, vacation pay, holiday pay, tips, commissions, severance pay, and the cash value of any “in-kind” payments, capped at a sum not in excess of 60 times CT’s minimum wage.
Employee Coverage & Eligibility
Under the unpaid leave law in place prior to the CT PFMLA, the Connecticut Family Medical Leave Act (CT FMLA), employees had to be employed for at least 12 months (even if nonconsecutive) and earn at least $1,000 during that time to be granted up to 16 weeks of unpaid leave in a 24-month period.
Under the new law, employees are considered eligible if they have been employed within the last 12 weeks, or they are currently employed, and they have earned wages of $2,325 in the base period, which is their highest-earning quarter of the first four of the five most recently completed quarters. The new law also takes away the minimum hour requirement.
With some exceptions, employees who are unionized in Connecticut or who are employed by the federal government, a municipality, a local or regional board of education, or a non-public elementary or secondary school are not eligible for CT PFMLA benefits.
Beginning January 1, 2022, eligible employees will be able to take up to 12 weeks of paid leave for reasons generally the same as those allowed for unpaid leave under current CT FMLA law, which include:
- the birth, adoption, or foster placement of a child (and now, an additional two weeks in the event of a pregnancy-related health condition that results in incapacitation);
- to care for a family member with a serious health condition (the definition of “family member” has been expanded from spouse, son, daughter, or parent to include siblings, parents-in-law, grandparents and grandchildren, as well as any other “individual related to the employee by blood or affinity whose close association the employee shows to be the equivalent of those family relationships”);
- for their own serious health condition;
- to provide service as an organ or bone marrow donor;
- when notified of an impending call or order to active duty in the armed forces;
- for a qualifying need related to a spouse, son, daughter, or parent being on active duty in the armed forces; or
- for reasons related to family violence (for which leave is limited to 12 days).
Steps for Getting Ready
If you haven’t already, we recommend providing written notice to your employees immediately that explains the program and the deductions from their pay that will take effect on January 1st. The statute itself does not require this particular notification; however, providing notice may be beneficial to you and your employees.
Training for your HR personnel is also key. They need a comprehensive understanding of CT PFMLA regulations and compliance measures, as well as how these regulations interact with existing federal and state laws and regulations. And it’s prudent to stay alert for regulatory guidance and legislative updates. We expect more program guidance to be issued throughout 2021.
Employers should also ensure employee handbooks, policies, and procedures have been updated appropriately and that legal, notification, and filing requirements are being met. There’s a lot to digest here, and failure to meet compliance and make appropriate contributions may result in penalties. Employers should consider obtaining experienced employment counsel.
Contact Commonwealth Payroll & HR
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*The information provided in this article does not, and is not intended to, constitute legal advice; instead, all information is for general informational purposes only. Information in this article may not constitute the most up-to-date legal or other information. This article contains links to other third-party websites provided only for the convenience of the reader.