- Approximately 44,000 businesses in Connecticut have missed a registration deadline for payroll deductions to support the state’s family and medical leave program
- The first contributions from the 0.5 percent deductions are due on April 1
- Businesses are limited in how much they can deduct from employee paychecks, and could be on the hook for any additional funds due
Summary by Dirk Langeveld
The Connecticut Paid Leave Authority is again urging businesses to register for the state’s new family and medical leave program to ensure compliance after tens of thousands of eligible companies missed a Monday deadline.
Only about 60 percent of businesses that are required to make payroll deductions to support the program had registered with the Connecticut Paid Leave Authority by the deadline, leaving approximately 44,000 that are not in compliance. The deadline was originally set for Feb. 1, but extended in response to business owners’ pleas for more time to prepare.
About 20,000 businesses registered during this extended window. The Connecticut Paid Leave Authority says it is working with large payroll providers who can ensure that about 20,000 more will be compliant before the end of March.
Under the Paid Family Medical Leave Act passed in Connecticut in 2019, all businesses with at least one employee must withhold 0.5 percent of employee payrolls and contribute this money to the program on a quarterly basis. Starting on Jan. 1, 2022, employees may begin drawing benefits under the program, receiving up to 12 weeks of leave with weekly benefits capped at 60 times the minimum wage – $780 in 2022 and $900 once Connecticut’s minimum wage reaches $15 an hour in 2023.
Businesses could begin registering in November and making payroll deductions at the start of 2021. Businesses can still register even if they have missed the deadline and begin making the deductions ahead of an April 1 deadline, when first quarter payments are due. There is also a 30-day grace period allowing companies to make the necessary payment by the end of April.
The Connecticut Paid Leave Authority has warned that the state can hold employers responsible for making up any shortfall in money remitted to the program, since companies can withhold no more than 1 percent of employee payrolls through June to catch up on missed deductions. Companies are exempt from the program if they can demonstrate that they offer a private paid family and medical leave program with comparable benefits.
Few states offer paid family and medical leave, and proponents say it helps guarantee economic security to workers who suffer a serious illness or injury, or need to provide care to a family member for an extended period. However, some business groups have criticized the program as creating additional burdens for small businesses. Connecticut’s previous leave program was limited to companies with at least 50 employees.
Republican lawmakers have launched several efforts to weaken or eliminate the program during the current legislative session. These include proposals to allow individuals to opt out of the program or to repeal the Paid Family Medical Leave Act and dissolve the Connecticut Paid Leave Authority. Another proposed bill would suspend payroll deductions during any public health or civil preparedness emergency related to COVID-19; Governor Ned Lamont rejected a similar call by Republican leaders before payroll deductions began on Jan. 1.
