Monday, November 11, 2019

All


Connecticut Enacts Paid Family & Medical Leave


This article was originally published by USI Insurance Services and is reprinted here with their expressed permission.

On June 25, 2019, Connecticut Governor Ned Lamont signed into law “An Act Concerning Paid Family and Medical Leave” that provides for paid family and medical leave. The Act creates the Family and Medical Leave Insurance (“FMLI”) program to provide wage replacement benefits to certain employees taking leave for reasons allowed under Connecticut’s Family and Medical Leave Act (“CTFMLA”), which the Act also amends, or the family violence leave law. Contribution withholdings under the state program begin January 1, 2021, and FMLI generally provides 12 weeks of benefits beginning January 1, 2022. Employers can opt out of the state program and into a private plan, as long as certain conditions are met.

Employer Coverage

The Act distinguishes private sector employers from public sector employers.

The Act requires all private employers (except nonpublic elementary or secondary schools) that employ one or more employees in Connecticut to provide paid family and medical leave benefits. The Act also requires the state, municipal employers, or local or regional boards of education to provide paid family and medical leave benefits to “covered public employees.”

A “covered employee” is an individual who has earned at least $2,325 during the employee’s highest earning quarter within the five most recently completed quarters and: is employed by a private-sector employer or is a “covered public employee”; has been employed by an employer for the previous 12 weeks; or is a self-employed individual or sole proprietor who is a Connecticut resident and voluntarily enrolls in the FMLI program. The Act does not apply to federal employees.

Types of Leave

A covered employee is entitled up to 12 weeks of FMLI benefits during a 12-month period. An additional two weeks of FMLI benefits are available for a serious health condition that occurs during a pregnancy that results in incapacitation. The types of leave available for FMLI benefits are: Birth of a son or daughter of the employee; Adoption or foster care placement of a son or daughter with the employee; Caring for a family member of the employee, if such family member has a serious health condition; Serious health condition of the employee; Serving as an organ or bone marrow donor; To care for an ill or injured service member or any qualifying military exigency in which a family member is on active duty or called to active duty; To care for a family member who is a covered service member; and Victim of family violence.


The Act defines, in detail, the definitions of who is a family member, including: spouse, parents, in-laws, children, siblings, grandparents, grandchildren, and “an individual related to the employee by blood or affinity whose close association the employee shows to be the equivalent of those family relationships.” Employers should review and understand the expanded definitions of these family members as they are more inclusive than many of the other states that offer paid family and medical leave.

The Act allows for intermittent leave or a reduced leave schedule (with certain conditions) for all reasons covered under the Act. The leave cannot be less than four hours in any work week. If the leave is four hours or more, but for less than one full week, hourly compensation will be determined on a pro rata basis at the discretion of the Connecticut Department of Labor.

The FMLI Program

The Act establishes a Paid Family and Medical Leave Authority as a quasi-public agency to develop and administer the FMLI program.

Funding the Benefit: The Act creates the Family and Medical Leave Trust Fund (the “Fund”) which will receive all contributions under the Act. Contributions are funded through a mandatory payroll tax of 0.5% of earnings and caps the amount of an employee’s earnings subject to the contributions at the same amount of earnings subject to Social Security taxes (currently $132,900). Beginning November 1, 2022 and every November thereafter, the Authority may announce a new contribution withholding amount, not to exceed 0.5%, effective January 1 of the following year. Any increase will be made to ensure that the Fund remains available to pay covered benefits.

Amount of Benefit: The weekly benefit amount for covered employees through the FMLI program is equal to 95% of the covered employee’s base weekly earnings up to an amount equal to 40 times the state minimum wage, plus 60% of base weekly earnings that exceeds 40 times the minimum wage. Total compensation cannot exceed 60 times the state minimum wage. When the state minimum wage becomes $15 per hour in 2023, the maximum amount will be capped at $900.00 per week.

A covered employee may receive benefits from the FMLI program concurrently with any other employer provided employment benefits, provided the total compensation does not exceed the covered employee’s regular rate of compensation. A covered employee will not be eligible for benefits through the FMLI program if the employee is collecting unemployment or workers’ compensation.

Approved Private Plan

Employers may apply to the Authority for approval to offer a private plan. To obtain approval, an employer must provide its employees with at least the same level of benefits, under the same conditions and employee costs, as the FMLI program. A private plan may be provided through an insurance policy or through self-insurance. If an employer’s plan provides for insurance, the forms of the policy must be approved by the Connecticut Insurance Commissioner and be issued by an approved insurer. If an employer’s plan is in the form of self-insurance, the employer must furnish a bond running to the state, with a surety company authorized to transact business in the state as a surety.

Employer Notification

Beginning July 1, 2022, employers are required to provide written notice to each of their employees: of the entitlement to family and medical leave and the terms under which leave may be used; of the opportunity to file a claim for compensation under the program; that retaliation by the employer against the employee for requesting, applying for or using family and medical leave for which the employee is eligible is prohibited; and that the employee has a right to file a complaint with the Labor Commissioner for any violation of the Act.

Other Changes to CTFMLA

Beginning January 1, 2022, the Act will amend the existing CTFMLA law. Some of the more notable changes include: extending CTFMLA to cover private-sector employers with at least one, rather than 75, employees; and changing the maximum CTFMLA leave allowed from 16 weeks over a 24-month period to 12 weeks over a 12-month period and allows an additional two weeks of leave due to a serious health condition that results in incapacitation during pregnancy.

Applicability Dates

January 1, 2020: The Authority must begin to conduct a public education campaign to inform individuals and employers regarding the FMLI program.

January 1, 2021: Contribution withholding for the FMLI program begins.

January 1, 2022: All leave types are available for compensation.

July 1, 2022: Employer notification to new hires and annually.

Employer Next Steps

Employers should work with labor counsel and payroll processors to review their leave policies and procedures to ensure they are compliant with the Act by January 1, 2021. In addition, employers should monitor the state’s website for additional guidance and regulations.

Massachusetts Delays PFML

Exactly two weeks before Connecticut passed the FMLI, on June 11, 2019, Massachusetts Governor Charlie Baker, Senate President Karen Spilka, and House Speaker Robert DeLeo issued a joint statement announcing a three-month delay in the Paid Family and Medical Leave (PFML) law. Contribution withholdings will begin October 1, 2019 (they were scheduled to begin on July 1, 2019), and there will be other changes to the law as well.

This summary is intended to convey general information and is not an exhaustive analysis. This information is subject to change as guidance develops. USI does not provide legal or tax advice. For advice specific to your situation, please consult an attorney or other professional.

These materials are produced by USI Insurance Services for educational purposes only. Certain information contained in these materials is considered proprietary information created by USI. Such information shall not be used in any way, directly or indirectly, detrimental to USI and/or their affiliates. Neither USI nor any of its respective representatives or advisors has made or makes any representation or warranty, expressed or implied, as to the accuracy or completeness of these materials.

Neither USI nor their respective representatives or advisors shall have any liability resulting from the use of these materials or any errors or omission therein. These materials provide general information for the use of our clients, potential clients, or that of our clients’ legal and tax advisors.

IRS Circular 230 Disclosure: USI Insurance Services and its affiliates do not provide tax advice. Accordingly, any discussion of U.S. tax matters contained herein (including any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone unaffiliated with USI of any of the matters addressed herein or for the purpose of avoiding U.S. tax-related penalties.

Editor’s Note: Other States Already Mandate Paid Leave
Note: Several other states in the Northeast region already have laws requiring employers to provide paid family and medical leave. These states include New Jersey, New York and Rhode Island. Again, employers in these states should work with labor counsel and payroll processors to ensure compliance.


Share with...

Twitter | Facebook | Email


Related Posts

... Why Now is the Best Time to Buy Equipment

Posted on October 22, 2019

... The Future Is Now

Posted on October 22, 2019

Join Our Email List For Updates!

Enter your email to receive important news and article updates.