Beginning on January 1, 2021, employers are required to take deductions from employees’ paychecks for Connecticut’s new Paid Family and Medical Leave (PFML). The deductions will fund PFML, which will be administered by a new state agency, the CT Paid Leave Authority. The state has created a useful website for the program, an employer toolkit, and an FAQ.
PFML applies to all employers that have at least one employee in Connecticut. Covered employers are required to register with the CT Paid Leave Authority or apply for an exemption if they have an equivalent private plan before December 31, 2020. Employers may do so on the Prepare for Registration webpage.
Employers are responsible for withholding PFML contributions from Connecticut employees’ wages. The contribution rate is 0.5 percent of the employee’s gross earnings, up to a specified cap (the Social Security wage contribution rate). In 2021, the cap is $142,800, meaning the portion of an employee’s income above that level isn’t subject to this withholding. Gross earnings include, for example, vacation pay, holiday pay, tips, commissions, and severance pay. Employers do not contribute to PFML from their own funds; the program is entirely employee funded.
Employers can pay PFML contributions to the CT Paid Leave Authority either throughout the quarter or pay them in installments at the end of each quarter. The first deadline to remit Q1 contributions is March 31, 2021.
Although paycheck deductions begin next month, employees can’t use PFML benefits until January 2022.
If you haven’t already, register with the CT Paid Leave Authority before December 31, 2020, and begin to withhold PFML contributions from employees’ paychecks on January 1, 2021.