As an employer, providing conducive and comfortable working conditions for your employees is not just a voluntary action done out of your goodwill; it's a legal obligation. One way the State of Connecticut is ensuring that employees are duly cared for and compensated is through the Paid Leave Act.
If you're an employer or a business owner operating in the State of Connecticut, you play a vital role in helping your employees access paid time off to address their personal, family, and health needs, as provided for under Connecticut Paid Leave Act. It is, therefore, necessary for you to know all about the Act and how it benefits you, your employees, and your business.
What is the Connecticut Paid Leave Act?
The Connecticut Paid Leave Act (CTPL) is a statute created by the Connecticut Paid Leave Authority which went into effect on January 1, 2022. Under the CTPL, employers began withholding 0.5% from their employees’ paychecks. Employers remit these contributions quarterly to the Connecticut Paid Leave Authority.
The purpose of the CTPL is to provide income replacement benefits for eligible employees. The program offers members of the Connecticut workforce the opportunity to access paid time-off for qualifying life events including childbirth (including placement of a child in foster care and adoption) and seeking treatment for serious health conditions (for self or family members).
The Connecticut Paid Leave program covers all employees who have reached specific earned-wage benchmarks and is available to any firm with one or more employees. Sole proprietors or self-employed individuals, who are also residents of Connecticut can opt-in to the program, and if they do opt in, they are required to remain in the program for a minimum of three years.
If employers offer a private Paid Leave Plan, they may apply to Connecticut Paid Leave Authority for an exemption from participating in the state's program. If the private program is found to be comparable to that of the state, and a majority of the employer's workers have agreed to the plan, the employer may receive an exemption from participating in the state's program.
The Connecticut Paid Leave Authority only offers payments for qualifying events but does not offer job protection to employees taking leave. Only employers can determine, in communication with their employees, whether the leave taken is subject to job protection.
Is The Connecticut Paid Leave Act (CTPL) The Same As The Family and Medical Leave Act (FMLA)?
While there may be some similarities between the two acts with respect to some of the eligibility criteria, the CTPL is not the same as the FMLA. The Connecticut Family and Medical Leave Act (CTFMLA) has been in effect since 1993. It had initially applied to employers of 75 or more employees, but from January 2022, businesses with one or more employees are mandated to participate. It aims to provide job-protected, unpaid leave for eligible employees who meet certain conditions.
A major difference between the CTPL and the FMLA is that the CTPL offers income replacements without the guarantee of job protection, whereas the FMLA provides job protection but the leave is unpaid, although the company may develop procedures to provide income replacement while the employee is on leave.
In other words, under the CTPL, eligible employees who apply for leave to address certain medical or family situations are entitled to payment even though they're not working, but they may resume to find that their position at work has been taken. But under the FMLA, eligible employees who apply for leave are assured that their job will be retained but they won't receive any payments for the periods they were on leave.
Who Administers the CTPL Program?
The Connecticut Paid Leave Authority administers the CT Paid Leave Program. The 15-member board comprises appointed individuals representing a variety of community interests and subject matter experts. 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.
They develop policies and procedures, establish contribution rates and receive contributions. They are also responsible for reviewing and determining claims for paid leave benefits and approving and auditing voluntary plans. They are available to answer employers' questions and also support them by offering an enrollment and payment process that is easy to use.
What Are The Qualifying Events?
Employees can apply to be a beneficiary of the CTPL Act based on any of the following qualifying events
For child care or preparation for the arrival of a child, either by birth, adoption, or foster care. Or, If they are pregnant or have given birth and their healthcare provider determines they need more time for recovery, they can apply for an additional 2 weeks of leave.
To take time off from work for the employee's own serious medical or psychological health conditions including injuries
To care for a family member suffering from a serious medical or psychological condition
To serve as a bone marrow or organ donor
To care for a military family member if injured during active duty and for various other reasons relating to when a family member is called to active service
If experiencing family violence, approved employees can apply for up to 12 days of paid leave.
Who Is Eligible to Benefit From CTPL?
To be eligible to benefit from the Paid Leave program, employees must have earned a minimum of $2,325 in wages in at least one of the first four of the five most recently completed quarters (wages may be combined from more than one covered employer), and fit into one of the following categories:
Currently employed and working in Connecticut
Currently unemployed but had been employed and working in Connecticut in the 12 weeks immediately preceding the leave
A sole proprietor or self-employed individual (must also be a resident of CT) who has opted into the program
Employees (as opposed to sole proprietors and self-employed individuals) do not need to be residents of Connecticut.
Will The Connecticut Paid Leave Program Replace My Salary Dollar For Dollar Over The Period Of MY Leave?
No, the Connecticut Paid Leave (CTPL) program is not a dollar-for-dollar wage replacement. The benefit rate is capped at 60 times the Connecticut minimum wage.
If an employee's wages are less than or equal to the Connecticut minimum wage multiplied by 40, the weekly benefit rate under CTPL will be 95% of the employee's average weekly wage. If an employees wages exceed the Connecticut minimum wage multiplied by 40, your weekly benefit rate will be 95% of the Connecticut minimum wage multiplied by 40 plus 60% of the amount the employee's average weekly wage exceeds the Connecticut minimum wage multiplied by 40.
Note: 40 times the minimum wage will be equal to $520 weekly in January 2022, increasing to $560 on July 1, 2022, and $600 on June 1, 2023. 60 times the minimum wage will be equal to $780 weekly in January 2022, increasing to $840 on July 1, 2022, and $900 on June 1, 2023.
What is The Cost Implication?
On The Connecticut Paid Leave Act, employees have contributions of 1/2 of 1% (0.5%) of their wages deducted from each paycheck.
However, moving the benefit to Principal will lower the employee contribution rate by 25%. Note that your benefit will not change if a Principal handles the administration for you. Since the program is a state-mandated benefit, all rules, amounts, and components relating to the benefit must be followed to match exactly as offered by the State of Connecticut.
Conclusion
Although the Act may, on the surface, seem to favor employees, your business also benefits from enrolling. When your employees are assured that their pay will keep coming even while they're on leave attending to pressing family or medical issues, it gives them peace of mind and reassures them of your interest in them and concern for their well-being. This ultimately promotes a happy, healthy, vibrant, and inclusive workplace for you and your employees.
Whether you want to register with the state's paid leave program or create your own private paid leave plan for your employees, Quantum Benefits can help you navigate the procedures and successfully set up a paid leave plan that is compliant with current state and federal employment and benefits laws. Give us a call today at (203) 856-6363 or fill out our contact form to speak with a representative.
