Compliance Snapshot:
- Employers with at least one employee in Connecticut should register their business with the state before December 31, 2020, even if they plan to apply for an exemption to the program;
- Employers must begin payroll deductions by January 1, 2021, and remit contributions quarterly;
- Employers should confirm internally, or with their payroll providers, that they are prepared for compliance;
- Employers should provide advanced notice to Connecticut employees about payroll deductions beginning January 1, 2021.
On June 25, 2019, Connecticut (“CT”) passed the Paid Family and Medical Leave Act (“PFML”) creating a program that allows eligible employees to receive up to 12 weeks of paid leave to care for a new child, to care for one’s own, or a family member’s serious health condition (including up to 14 weeks for a pregnancy-related illness), to deal with an exigency arising out of active duty, or to donate an organ. The PFML program will be fully funded through a mandatory payroll tax deduction that employers must begin withholding from employees’ paychecks on January 1, 2021. Eligible employees will not be able to apply for benefits until late 2021 and will receive benefits after January 1, 2022.
Who is a Covered Employer?
CT PFML covers all employers with at least one employee in Connecticut.
Which Employees are Eligible for CT PFML?
An employee becomes eligible if they have earned wages of at least $2,325 in the highest-earning quarter of the first four of the five most recently completed quarters (the “base period”) and they are currently employed with a covered Connecticut employer. Those who are not currently employed, but were employed by a covered employer within the last 12 weeks preceding their application, or those in CT who are self-employed/sole proprietors and who have enrolled in the CT PFML program, are also eligible to receive benefits.
Who Administers the CT PFML Program?
The CT PFML program will be administered by a newly created quasi-public agency, the Connecticut Paid Leave Authority (“Authority”). The Authority will be responsible for accepting employee applications for leave and distributing benefits.
What is the Contribution Rate?
The CT PFML program will be fully funded by a mandatory payroll deduction that is initially capped at one half of one percent (0.5%) of the employee’s wages up to the Social Security contribution base ($142,800 in 2021). Employers must begin paycheck withholdings on January 1, 2021. Employers should provide advanced notice to employees about payroll deductions beginning January 1, 2021.
How will an Employer Remit Contributions?
Beginning November 1, 2020, employers may begin to register with the state to enroll in the CT PFML program. Employers should be sure to register before January 1, 2021, when deductions begin. Collected contributions must be remitted to the Authority on a quarterly basis. The first payment will be due March 31, 2021. The Authority has advised that Automated Clearing House (“ACH”) files will be accepted, but the methods by which contributions may be delivered to the Authority have not been formally established. Late payments may be subject to penalties and interest.
Can an Employer Apply for an Exemption to the CT PFML Program?
Yes, employers have the option to purchase their own private insurance plan to provide paid leave benefits to their employees as an alternative to the state program. If an employer intends to apply for an exemption, they will need to register their business with the CT Paid Leave Authority. After registration, the CT Paid Leave Authority will send an email notification prompting the employer to submit a private plan application. To assist employers in this process, the Authority has made available an exemption checklist and an overview of the requirements. Once a private plan application is submitted for approval, the CT Paid Leave Authority will review the documentation, make a determination, and send a response. All private plans are subject to review and approval by the CT Paid Leave Authority.
Do Employers need to notify Employees about the CT PFML Program?
Yes, effective July 1, 2022, employers must provide written notice to employees upon hire and annually thereafter. The notice must inform employees of their:
- Entitlement to CT PFML;
- Opportunity to file a claim of compensation under the CT PFML;
- Protection from retaliation from requesting or taking CT PFML; and
- Right to file a complaint with the Labor Commissioner.
It is anticipated that a model notice will be released by the Connecticut Paid Leave Authority at a later date.
Employer Considerations
Employers are encouraged to register their business with the state before December 31, 2020, and work with their payroll providers to ensure processes are in place for payroll deductions beginning January 1, 2021. Employers are encouraged to provide advanced notice to employees about payroll deductions.
Additional Resources
- Connecticut Paid Leave Webpage
- Employer Toolkit
- Employee Paycheck Insert Sample
- Frequently Asked Questions
- Employer Fact-Sheet
- Exemption Checklist
- Private Plan Exemption Requirements
- Guide to Applying for a Private Plan Exemption
- Connecticut Paid Family and Medical Leave Act
- Sequoia Blog: Connecticut Passes Paid Family and Medical Leave Law
Disclaimer: This content is intended for informational purposes only and should not be construed as legal, medical or tax advice. It provides general information and is not intended to encompass all compliance and legal obligations that may be applicable. This information and any questions as to your specific circumstances should be reviewed with your respective legal counsel and/or tax advisor as we do not provide legal or tax advice. Please note that this information may be subject to change based on legislative changes. © 2020 Sequoia Benefits & Insurance Services, LLC. All Rights Reserved
