October 29, 2020

Connecticut Paid Leave Program

By Michele Spence, Partner, Tax & Business Services

Connecticut Paid Leave Program Compensation & Benefits Consulting

On June 25, 2019, the Connecticut legislators passed the Paid Family and Medical Leave Act, which include provisions offering Connecticut workers the opportunity to take time off from work to attend to personal and family health needs, without worrying about lost income. The Act will take effect on January 1, 2021.

The Connecticut (CT) Paid Leave Authority administers the Connecticut Paid Leave (CTPL) program. The CT 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 contributions so that the funds are available to pay benefits.

Employee Paycheck Withholdings

The funding to support the CTPL program will come in the form of employee payroll deductions. These payroll deductions are capped at 0.5%, and there is no employer match. Employers will be responsible for withholding and submitting payroll deductions. These deductions must be submitted to the CT Paid Leave Authority quarterly.

The CTPL program is not a dollar-for-dollar wage replacement. 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 employee’s wages exceed the Connecticut minimum wage multiplied by 40, the 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. The benefit rate is capped at 60 times the Connecticut minimum wage. (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.)

Employer Action Needed

Beginning November 1, 2020, employers, self-employed individuals and sole proprietors must register with the CT Paid Leave Authority.

Marcum suggests all Connecticut employers (and those who are self-employed) check with their payroll service providers to verify if the payroll service will address enrolling or action is required by the business.

Beginning January 1, 2021, employers must begin to withhold employee contributions (1/2 of 1% of each paycheck) to the CT Paid Leave Authority trust fund. The same date applies to self-employed individuals and sole proprietors.

Please visit the following new website that provides an excellent comprehensive guide to the program, key dates and frequently asked questions: www.ctpaidleave.org

Contact your Marcum Tax Advisor should you have any questions regarding this program.