Connecticut passed a new Paid Family Medical Leave Act that will be entirely funded with employee contributions starting January 1, 2021. In an effort to keep our clients updated, we have provided an overview of the new Act and what the expectation is of the employer.
Connecticut’s Paid Family and Medical Leave allows employers to provide employees with paid, job-protected leave for health or family-related reasons. Employees will be eligible for compensation after they have completed 12 weeks (3 months) of service proceeding the leave request. CT PFML is a program that will be entirely funded by employees through a payroll tax deduction beginning in January 2021, with benefits available to eligible employees beginning in January 2022.
Employers with more than 50 employees are currently required to comply with The Family and Medical Leave Act (FMLA) which entitles eligible employees to take unpaid, job-protected leave for specified family and medical reason.
The FMLA ONLY applies to employers that meet certain criteria. A covered employer is a:
While the reasoning behind the leave is very similar to PFMLA, the eligibility criteria outlined in the chart below has changed significantly.
|Leave includes 16 unpaid weeks in 24-month period||Up to 12 paid weeks in a 12-month period or 14 for pregnancy depending on qualifying condition|
|Covers employers with 50+ employees||Covers employers with one or more employees|
|Must have worked 12 months with employer to be eligible||Must have completed 12 weeks of service with no minimum requirement for hours worked|
|Restrictive qualifications for leave||Significantly broadens what qualifies for paid leave|
|Definition of family members that qualify for leave: Spouse, Parent, and Child||Expanded definition of family members to include: Parent-in-law, sibling, Sibling-in-law, Domestic Partner, Grandparent|
Below is a list of qualifying events for PFML:
CT employers who have one or more employees MUST participate. Self-employed individuals can opt-in, but they must remain in the program for a minimum of three years if they do so.
If employers offer a private Paid Family and Medical plan, they can apply to the CT Paid Leave Authority for an exception from the program if:
If an employer would like to use the private plan, they would include that information when they register with the CT Paid Leave Authority.
Employees must have at least $2,325 in wages in the first four of the past five quarters and fit into the following categories:
Employees do not need to be a resident of CT; they must work for a CT based company.
The employee must request PFML from their employer 30 days in advance whenever foreseeable (birth, medical treatment, donation of marrow) If the leave is not foreseeable, the employee must give written notice as soon as possible. An employer may require a doctor’s note for any employee’s leave related to a serious health condition.
It is the employer’s decision if the employee can take the leave, not if they will get paid. If the employer approves the leave, the employee must complete and submit an application for paid leave benefits to the CT Paid Leave Authority. If approved, the CT Paid Leave Authority will administer paid leave benefits directly to the employee. The request process is still pending details.
The paid leave will be funded through employee payroll contributions. Employers will not make contributions to the program, but they will be required to deduct and withhold a mandatory tax of 0.5% up to the Social Security tax base of $142,800 starting January 1, 2021. This is a post-tax deduction and includes vacation, holiday, commission, bonuses and severance. This applies to part-time, seasonal and temporary workers.
The CT Paid Leave Authority will pay up to 12 weeks of benefits for an approved PFM leave of absence. A two-week extension may be granted if a healthcare provider determines they may need more time for recovery.
The base period used to determine eligibility and pay will be the highest-earning quarter of the first four of the five most recently completed quarters.
The base weekly earnings used to determine compensation during leave are equivalent to 1/26th of an employee’s covered unemployment insurance wages during the two highest-earning quarters in the base period.
The CT Paid Leave Authority determines the amount any employee receives, but the amount is calculated using a multi-step process.
Step 1: Calculate 95% of the base weekly earnings, capped at 40 times the state minimum wage.
Step 2: Calculate 60% of the base weekly earnings above 40 times the state minimum wage.
Step 3: Add the two amounts together to determine the weekly benefit. However, the weekly benefit cannot exceed 60 times the minimum wage
Example: A full-time worker earning $20/hour and working 40 hours/week would have base weekly earnings of $800.00.
In June of 2023, once the minimum wage is fully phased in, they would be eligible to receive 95% of their first $600.00 in earnings ($570.00), plus 60% of the next $200.00 in earnings ($120.00), for a total of $690.00 in weekly compensation
Contributions will be submitted quarterly to the CT Paid Leave Authority by the employer’s payroll provider. Funds are held in the CT Family Medical Leave Insurance Trust Fund.
|November 23, 2020||Employers can start registering with the CT Paid Leave Authority by taking the following steps:
|January 1, 2021||Withholding begins|
|March 31, 2021||1st quarter contributions due to CT Paid Leave Authority|
|June 30, 2021||2nd quarter contributions due to CT Paid Leave Authority|
|September 30, 2021||3rd quarter contributions due to CT Paid Leave Authority|
|December 31, 2021||4th quarter contributions due to CT Paid Leave Authority|
|Fall/Winter 2021||Employees can begin submitting applications for paid leave|
|January 1, 2022||Paid Leave benefits become available|
This Act will have many additions and changes in the weeks and months to come. As always, we will update you as things progress and are happy to help you navigate through this process.
For more information on CT PFMLA go to https://ctpaidleave.org/.
Please feel free to contact us with any questions.