- Only about 40 percent of eligible Connecticut businesses have registered for payroll deductions for the state’s Paid Family and Medical Leave program
- Connecticut Paid Leave Authority warns that employers face greater financial challenges and paperwork headaches if they do not register by Feb. 1
- Any business with at least one employee is required to withhold 0.5 percent of employee wages and make quarterly contributions to the program’s benefits pool
The Connecticut Paid Leave Authority is warning that businesses that fail to register to make payroll deductions for the state’s new family and medical leave program by Feb. 1 will face significant financial and administrative hurdles.
Registration for the program opened in November, but only about 40,000 of the approximately 100,000 qualifying businesses have registered. All companies with at least one employee are required to withhold 0.5 percent of employee payrolls to be contributed on a quarterly basis to the Connecticut Paid Leave Authority.
This agency is warning that businesses that don’t register by Feb. 1 will face additional paperwork and financial challenges. In particular, it will be more difficult for employers to catch up on what is owed, since it falls to the employer rather than the employees to make up any outstanding balance if the company is late to register or begin deductions.
On its Facebook page, the Connecticut Paid Leave Authority says the Department of Labor allows employers no more than the first two quarters of 2021 to catch up on deductions. Employers can increase how much they withhold from employees, but may not deduct more than 1 percent per paycheck. The Connecticut Paid Leave Authority is also empowered to pursue the funds it is owed if an employer fails to contribute enough to the program.
Registered businesses began deductions on Jan. 1, and the program will begin offering qualified employees up to 12 weeks of paid family and medical leave beginning in 2022. Approximately 1.7 million Connecticut workers are subject to payroll deductions and will be able to draw on the benefits once they become available. The weekly benefit will be capped at 60 times the minimum wage, which will be amount to $780 in 2022 and $900 once Connecticut’s minimum wage reaches $15 an hour in 2023.
The benefit must be reduced if the Connecticut Paid Leave Authority determines that there are insufficient funds to remain solvent. A financial analysis conducted by the authority concluded that the program can maintain solvency for at least its first five years.
Employers who register with the Connecticut Paid Leave Authority are responsible for making payroll deductions, submitting these deductions to the agency each quarter, and communicating with employees about the program and its benefits. Companies may opt out if they can demonstrate that they offer a private family and medical leave program with comparable benefits.
Proponents have hailed the program as a crucial way to provide assistance to workers and guarantee economic security if they develop a serious illness, need to care for a family member, or otherwise have to spend a prolonged period away from their job. Governor Ned Lamont has said the COVID-19 pandemic has provided a stark example of the importance of providing paid leave.
However, paid family and medical leave has also faced significant pushback. The Connecticut Business & Industry Association says the program places new burdens on the state’s smallest businesses, as the state’s leave program was previously limited to companies with at least 50 employees.
Lamont rejected calls from some Republican lawmakers to postpone the program’s payroll deductions due to the COVID-19 pandemic and its resulting impact on the economy. Two Republican lawmakers, Reps. Christie M. Carpino and Tami Zawistowski, are proposing a bill that would allow individuals to opt out of the program on an annual basis.
