On January 1, 2021, the state of Connecticut launched their Paid Family and Medical Leave insurance program. The program is fully funded by employee payroll contributions, and is intended to provide wage replacement and job protection to employees who need time away from their jobs to tend to family or medical needs.
Below are some frequently asked questions that employers have asked about the program.
Do I need to register my business?
Yes, you are required to register your business for Connecticut Paid Family Medical Leave by going to ctpaidleave.org, clicking Get Started under “Register Your Business”, and following the steps to register. Once you’ve registered, OnPay will automatically set up the payroll deductions of all mandatory contributions to the program so that we can collect and remit the withholdings to CT starting 1/1/21.
Who is eligible for the program?
The Connecticut Paid Leave (CTPL) program covers all employers with one or more employees and is accessible to all employees who have met certain earned-wage thresholds. Those who are self-employed or are sole proprietors are also eligible to opt-in to the program.
Unionized employees of the State of Connecticut and employees of the federal government, a municipality, a local or regional board of education, or a non-public elementary or secondary school, generally are not covered under the PFMLA, with some exceptions.
Who is eligible for the benefits?
Covered employees in Connecticut are eligible for benefits under PFMLA 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 are currently employed, or have been employed within the last 12 weeks, or are self-employed, a sole proprietor and a Connecticut resident enrolled in the program.
Who administers the program?
The Connecticut Paid Leave (CTPL) program is administered by the CT Paid Leave Authority. The Paid Leave Authority accepts applications for paid leave benefits, reviews those applications and if approved, administers benefits to eligible employees, those who are self-employed and sole proprietors. The CT Paid Leave Authority collects employee contributions and works with the Office of the Treasurer to properly invest and manage the contributions so that funds are available to pay benefits.
How is it funded?
The funding to support the CTPL program will come in the form of employee payroll deductions beginning January 1, 2021. These payroll deductions are capped at 0.5% and there is no employer match.
Note: Because contributions are only based on earnings up to the Social Security cap, this requires estimations in some instances.
Does my business qualify for an exemption?
In order to qualify for an exemption from making contributions to the CT Paid Leave Authority, you must offer to all employees a plan that provides all of the same rights, protections, and benefits as the Connecticut Paid Leave (CTPL) program. In order to be approved, a private plan must:
- Offer at least the same number of weeks of benefits
- Offer at least the same level of wage replacement for each week of benefits
- Include no additional requirements or conditions
- Deduct the same amount from employee paychecks as the state plan
- Cover all employees through the duration of their employment
- Apply to all current and future employees at your business
- Be approved by a majority of your employees who work in Connecticut (50% + 1)
- Remain compliant with any additional requirements established by the CT Paid Leave Authority
Note: Benefit rates may be adjusted to assure the solvency of the CT Paid Leave Authority trust fund. Please see the Private Plan Policy & Procedures.
Additionally, In order for a private plan to be approved, the plan must comply with the standards set by both the CT Paid Leave Authority and the Connecticut Insurance Department (CID). The CID issued a Notice to Insurers Concerning Paid Family and Medical Leave Insurance describing the process for insurers to submit Declarations of Insurance to the Department for approval pending the development of a Policy Filing Guidance Notice.
Why would a private plan be terminated?
Once a private plan is approved by the CT Paid Leave Authority, it must remain compliant with all rules and regulations. Failure to remain compliant may result in the termination of your private plan by the CT Paid Leave Authority. Causes for plan termination may include:
- Failure to pay benefits
- Failure to pay benefits timely and in a manner consistent with the public plan
- Failure to maintain an adequate security deposit
- Misuse of private plan funds
- Failure to submit reports as required
- Failure to comply with any other section of the Paid Family and Medical Leave Act
Can I apply for an exemption?
During the business registration process, businesses will be given the opportunity to apply for an exemption from the CT Paid Leave program.
Visit Connecticut Paid Leave for more information.