On June 25, 2019, legislation was passed creating the “Paid Family and Medical Leave Act”. The Act will expand upon the current Connecticut’s Family and Medical Leave Act (CT FMLA). Effective, January 1, 2022, CT FMLA will apply to employers with one or more employees working in CT reduced from the previous threshold of 75+ employees.
The CT Paid Leave Act expands coverage to employers with at least one employee and expands the definition of a close family member. There is no employer contribution. Funding for this will begin January 1, 2021, as a 0.5% employee payroll tax deduction.
Recently, The Paid Leave Authority launched a new website www.ctpaidleave.org.
Role as an Employer
- Beginning in late November 2020, the website will open registration for employers. Employers will be required to register with business.ct.gov prior to registering at www.ctpaidleave.org,
- Beginning January 1, 2021, employers will be required to withhold .5% of employee FICA based wages.
- The contributions are “after-tax” and do not reduce the employee’s taxable wages.
- The maximum annual employee contribution for 2021 would be $714 based on FICA wages = $142,800 x 0.5% = $714.
- Submit employee contributions to the CT Paid Leave Authority. This withholding must be remitted no later than the last business day of the month after the close of the quarter. (i.e. April 30 for the quarter ended March 31st)
- Communicate with the paid leave authority and employees about leave requests. Individuals can apply for Income replacement benefits starting January 1, 2022 to the CT Paid Leave Authority.
Employers may also apply for approval of a private plan if it provides the same rights and benefits as the state plan and at no greater cost. As part of this application, there are requirements to complete. An employee vote will need to be submitted.
Sole proprietors and self-employed individuals may opt-in to the program, however, they will be required to enroll for a minimum of three years.
In 2022, Employees will be Eligible to Apply for Benefit
Benefit rates will be equal to 95% of the employee’s average weekly wages if the wages are less than or equal to the Connecticut minimum wage multiplied by 40. If wages exceed the Connecticut minimum wage multiplied by 40, the employee’s benefit rate will be 95% of the employee’s average weekly wage up to the Connecticut minimum wage multiplied by 40 plus 60% of the amount the average weekly wage exceeds the Connecticut minimum wage multiplied by 40. The benefit rate is capped at 60 times the Connecticut minimum wage.
The scheduled minimum wage effective August 1, 2021 is $13 per hour times 60 = maximum benefits of $780. If employee base weekly earnings were $950 as of January 2022. The calculation would be:
- 95% of $950 = $902.50
- 40 x $13 = $520
- $902.50 – $520 = $382.50 x 60% = $229.50
- $520 plus $229.50 = $749.50 is below the maximum benefit. Therefore, employee would receive full benefit $749.50.
For more information regarding the program visit the Connecticut Paid Leave website.