Connecticut readies its paid family and medical leave program 

December 02, 2021
Connecticut’s paid family and medical leave (PFML) benefits become available in January 2022. The PFML program applies, with the limited exceptions, to any employer with one or more employees working in Connecticut. Eligible employees will be able to take up to 12 weeks (or more in some cases) of partially paid leave for many of the same reasons allowed for unpaid leave under the federal Family and Medical Leave Act (FMLA). Employers don’t have to contribute, but must collect and remit employee contributions, which began at the start of 2021.

Connecticut PFML recap

The PFML law (Conn. Gen. Stat. §§ 31-49e to 30-49t), enacted in 2019, expands the existing Connecticut Family and Medical Leave Act (CT FMLA) (Conn. Gen. Stat. §§ 31-51kk to 31-51rr), which provides many of the same job protections as the federal FMLA. Coinciding with the start of benefit availability in 2022, the PFML law broadens existing CT FMLA definitions for eligible employees and family members, among other amendments.

Covered employers

The PFML program covers all employers with one or more Connecticut employees. Self-employed individuals or sole proprietors may opt into the program. Private elementary and secondary schools are exempt, along with public employers subject to a collective bargaining agreement.

Eligible employees

Anyone who works in Connecticut for a covered employer and has earned wages of at least $2,325 in the highest-earning quarter of the first four of the five most recently completed quarters (the base period) may qualify for benefits if at the time leave begins, the individual meets one of the following conditions:

  • Is currently employed in Connecticut
  • Has been employed in Connecticut within the last 12 weeks
  • Is self-employed or a sole proprietor and a Connecticut resident enrolled in the program

Duration and reason for paid leave

Qualified employees may take up to 12 weeks of PFML for any combination of the following reasons:

  • Employee’s serious health condition, with two additional weeks for employee’s pregnancy-related serious health condition
  • Organ or bone marrow donation
  • Care for a family member with a serious health condition
  • Bonding with a new child born to or placed with the employee for foster care or adoption
  • Qualified military exigencies
  • Care for a family member who is a covered service member with a serious illness or injury

In addition, employees can take 12 days of PFML to address matters related to family violence.

Family member

Under the current CT FMLA, a family member is limited to spouse, son, daughter or parent. Beginning in January 2022, this definition expands significantly to include a sibling, grandparent, grandchild, or “an individual related to the employee by blood or affinity whose close association the employee shows to be the equivalent of those family relationships.” These terms — except spouse — are broadly defined to encompass family members by blood, marriage, adoption, foster care or in loco parentis relationships.

Additional unpaid leave

CT FMLA provides military caregivers a one-time benefit of 26 weeks of job-protected leave in a 12-month period. If PFML is exhausted before the protected military caregiver leave is over, covered employees can take the remainder of the leave unpaid. Employers also must allow employees who have exhausted PFML and other paid leave to take at least 12 days of unpaid leave to handle matters related to family violence.

Funding

Employee contributions fully fund the program. Employers don’t have to contribute but must collect and remit covered employees’ contribution of 0.5% of wages up to the annually adjusted Social Security taxable maximum ($147,000 in 2022).

Benefit amount

The benefit amount is calculated using a multistep process:

  • Calculate 95% of base weekly earnings, capped at 40 times the state’s hourly minimum wage ($13 through June 2022, increasing to $14 on July 1, 2022, then to $15 on June 1, 2023)
  • Calculate 60% of any base weekly earnings above 40 times the state’s minimum wage
  • Add together the two amounts to determine the weekly benefit

Base weekly earnings are calculated as the employee’s two quarters of highest earnings in the base period — the first four of the five most recently completed quarters — divided by 26.

The weekly benefit can’t exceed 60 times the minimum wage. Here are some key figures for calculating PFML benefits:

  • 40 x minimum wage = $520 (increasing to $560 on July 1, 2022 and to $600 on June 1, 2023)
  • 60 x minimum wage = the maximum benefit of $780 in January 2022 (increasing to $840 on July 1, 2022, and to $900 on June 1, 2023)

Example. In 2022, Astrid qualifies for leave with a $1,500 average weekly wage based on her two highest quarters of earnings in the first four of the last five completed calendar quarters. Using this amount, 95% of her weekly wage exceeds the lower $520 threshold ($1,500 x 95% = $1,425). The amount in excess of that lower threshold ($1,425 – $520= $905) is then multiplied by 60% ($905 x 60% = $543). The sum of the two amounts ($520 + $543 = $1,063) exceeds the maximum weekly benefit ($780). Astrid’s weekly benefit amount is $780.

Applying for benefits

The state’s PFML Insurance Authority (or Paid Leave Authority (PLA)) collects employee contributions from employers; accepts paid leave benefit applications; and reviews, approves, and administers benefits for eligible employees.

Employees seeking job-protected leave under the CT and/or federal FMLA must apply to their employer and provide all required documentation, including medical certification, if applicable. An individual applying for PFML wage replacement benefits must apply to the PLA and provide all required documentation. Employees who know in advance that they will need income replacement during leaves that occur in 2022 will be able to apply for those benefits beginning in Dec. 1, 2021.

As part of the claims process, employees will receive an Employment Verification Form (EVF) to submit to their employer, which must then complete with date of hire and schedule/hour information. The employer must sign this form as part of the verification process and submit the completed EVF to Aflac as soon as possible after employee files the claim. The submission must occur no later than 10 calendar days from the new claim request or the first date of absence, whichever is later.

Eligibility issues for the first benefit year

Recent regulatory guidance provides some clarity on how eligibility for protected leave in the first year will work in practice. CT FMLA will change from an entitlement of 16 weeks of leave in a 24-month period to 12 weeks of leave in a 12-month period. Regulators have sought to clarify how that would affect employees currently covered and using CT FMLA.

If an employee has started a CT FMLA leave in 2021, the leave will be capped at 12 weeks in a 12-month period, even if the employee is approved for up to 16 weeks of leave as of Jan. 1, 2022. In 2022, the employer can look back over the applicable 12-month period — whichever method the employer has adopted for tracking CT FMLA use — to determine an employee’s leave use and any remaining time available, up to the new 12-week maximum. Employers may use any of four methods to calculate the 12-month period:

  • Rolling back. This method measures the 12-month period backward from the date an employee uses any CT FMLA leave. Under the rolling 12-month period, each time an employee takes CT FMLA leave, the remaining leave entitlement would be the balance of the 12 weeks that has not been used during the immediately preceding 12 months.
  • First day of leave going forward. This method measures the 12-month period forward from the first date an employee takes CT FMLA leave. The next 12-month period would begin the first time CT FMLA leave is taken after completion of the prior 12-month period.
  • Calendar year. This method uses 12-month period that runs from Jan. 1 through Dec. 31.
  • Any fixed 12-month period. This method uses a fixed 12-month period, such as a fiscal year (for example, Oct. 1 through Sept. 30) or a year starting on an employee’s anniversary date of hire.

Coordination with other paid leave

The employer may permit or require an employee to use any sick or other accrued paid leave or paid time off (PTO) while on approved leave. However, an employee who is taking job-protected CT FMLA leave must be able to retain at least two weeks of PTO. PFML coordination with employer-provided PTO will apply as follows:

  • A PFML-eligible employee who does not receive any employer-provided PTO (through accruals, an employer-provided short-term disability policy or otherwise) will start receiving PFML benefits with no offsets as of the first day of leave.
  • Employees who receive employer-provided PTO equal to the employee’s regular pay for the full leave won’t receive any PFML benefits during that leave. However, the PTO used won’t count against the employee’s maximum allotment of PFML benefits in a 12-month period.
  • PFML-eligible employees who receive employer-provided PTO equal to their regular pay for only a portion of the leave remain eligible for PFML benefits for the remainder of the leave.
  • Employees who receive employer-provided PTO at less than regular pay will have PFML benefits reduced to ensure the combined total doesn’t exceed 100% of the employee’s regular pay. This PTO will count against the employee’s 12-month period allotment.

Employers that offer short-term disability (STD) and long-term disability (LTD) insurance coverage to employees should review the policy language to determine whether it requires an employee to exhaust employer- and state-provided paid leave benefits before qualifying for STD or LTD benefits.

Taxation

Connecticut FAQs confirm that PFML benefits will be subject to federal and state taxes. Taxes are not automatically withheld from benefits paid, but payees can request voluntary tax withholding. Beginning in the first quarter of 2023, the PLA will issue an annual Form 1099-G for payees to report benefits paid under the program and any withholding.

For IRS Form W-2 reporting, employers should use Box 14 to reflect the employee contributions and include CTPL as the reference code. The first W-2 reporting to include this code will be for the 2021 calendar year.

IRS has categorized employee contributions to PFML programs in other jurisdictions as state income taxes. As such, the contributions may be deductible on the employee’s federal income tax returns. Connecticut tax law doesn’t permit a deduction for state income taxes.

Employer private plan option

Connecticut allows employers to obtain an exemption from participating in the state PFML by gaining approval for a private plan. To qualify, an employer must offer the private plan to all Connecticut employees and provide all of the same rights, protections, and benefits as the state program. In addition, the plan must:

  • Offer at least the same number of weeks of benefits
  • Offer at least the same level of wage replacement for each week of benefits
  • Include no additional requirements or conditions
  • Deduct the same amount from employee paychecks as the state plan
  • Cover all Connecticut employees through the duration of their employment
  • Apply to all current and future employees
  • Obtain approval by a majority of employees
  • Remain compliant with any additional requirements established by the PLA
  • Register with the state
  • Complete a surety bond if self-insuring
  • Offer one plan that covers both types of leave

Applying for a private plan

Once registered and logged in, plan sponsors should go to their account, complete the business name and choose “Private Plan” tab to upload initial documentation. The PLA will later email plans sponsors prompting them to upload final policy documentation. Employers may self-fund or purchase coverage from an approved insurer.

Employer considerations

Connecticut employers may want to look at their options for coordinating their own paid family and medical leave with the CT PFML program. Self-insured plan sponsors may offer a single point of contact for employees. However, the plan would need to satisfy the state’s requirements, limiting eligibility and design options. Relying on the state program would free employers to establish their own leave programs, but employees would need to work with multiple access points.

An employer’s paid leave administrator — if approved by the state to offer a CT PFML plan — may offer a single point of entry for employees by coordinating an approved insured plan with the employer’s own paid leave programs. Employers with insured plans should review policies to determine the correct coordination of benefits with the state.

In addition, employers must conspicuously display the state’s poster at each Connecticut work location and provide a notice of PFML benefits and rights to employees who give notice of a covered absence.

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