On June 25, 2019, Governor Lamont signed into law “An Act Concerning Paid Family and Medical Leave,” (“PFMLA”) enacting what is reported to be the most generous family leave law in the country. The law provides employees with up to 12 weeks of paid leave (14 weeks for those incapacitated by pregnancy) in a 12-month period to care for themselves or loved ones, with such benefits to be available beginning January 1, 2022. However, employers will need to begin preparing for the PFMLA sooner than that, as they are required to begin making deductions from employee paychecks to fund the law in January 2021.
The PFMLA provides that, starting on January 1, 2021, employees must contribute a percentage of their income through a mandatory payroll tax, to be withheld by employers and contributed to a Family and Medical Leave Insurance Trust Fund, which will then be used to pay PFMLA benefits. (Government unionized employees are exempt.) Employee wages up to the Social Security contribution and benefit base (currently $132,500) are subject to the payroll tax. The percentage to be contributed is to be set by the Paid Family and Medical Leave Insurance Authority, although it may not exceed 0.5%. There are no employer contributions to the PFMLA, although, in addition to the withholding requirement, there are certain notice requirements imposed on employers by the law.
Among the many aspects of PFMLA compliance that Connecticut employers will need to prepare for, they should consider evaluating their payroll processes to add another deduction for family medical leave benefits.