The first major milestone for implementing the state's paid family and medical leave mandate is now less than six months away.

The new mandate, which applies to all Connecticut businesses, begins Jan. 1, 2021 when the state begins withholding a 0.5% tax from employee paychecks to fund the program.

The tax goes into a state-run fund that allows workers to take up to 12 weeks of paid medical leave to care for themselves or a sick family member beginning Jan. 1. 2022.

More than 175 Connecticut employers joined a June 29 webinar moderated by Eric Gjede, CBIA's vice president for government affairs.

Employer Concerns

Among employer concerns are tax collection, whether the coronavirus pandemic could postpone the mandate, preventing abuse of the program, and maintaining the fund's solvency.

The panel included three members of the state's new Paid Family Medical Leave Insurance Authority—executive director Andrea Barton Reeves and retired attorneys Mike Soltis, and Henry Zaccardi—CBIA HR Counsel Mark Soycher, and Robin Imbrogno of Human Resource Consulting Group.

The authority plans to launch its website Aug. 1, including resources and compliance information for employers.

Reeves said the authority plans to launch its website Aug. 1, including resources and compliance information for employers.

The authority also plans instructional videos and webinars for employers, she said.

Panel members were unsure if the pandemic will delay the mandate's implementation, but said the authority is meeting its deadlines, and is intent on protecting the fund and preventing abuse.

Coronavirus Impact?

What's not known is whether the pandemic will prevent the state Department of Labor, which will provide some administrative functions, from meeting its deadlines.

Zaccardi said the authority has been meeting since September, establishing committees, and hiring its executive director.

Soltis assured employers the authority's goal was protecting the fund's integrity.

"We are a fiduciary for employee money and we need to make sure we spend that money wisely."

PFMLIA board member Mike Soltis

"This is 100% funded by employee contributions so we are a fiduciary for employee money and we need to make sure we spend that money wisely," Soltis said.

"This fund is employees' money," Zaccardi added.

"We want to make sure it is only used for the purposes the legislature intended."

Employer Outreach

With employers preoccupied with the pandemic, Soycher said the authority must do a good job publicizing the FMLA program and explaining the new tax to workers.

"We need to awaken employers and let them know this is coming," Soycher said.

Employers must also have "information to explain to employees why their paychecks are being dinged and where all the money is going," he added.

Small businesses have the biggest concerns over the new mandate.

Imbrogno said small businesses have the biggest concerns over the new mandate.

"How do they manage their workforce with people out for long periods?" she asked.

"What about micro-employers with five people or less? How will they operate?"

Small Businesses 'Targeted'

Gjede said while CBIA has highlighted how the mandate disproportionately targets small businesses, the chairs of the legislature's Labor and Public Employees Committee this year ignored bipartisan calls for reforms.

Imbrogno added there are concerns about the fund's financial stability, with fears that employers will be forced to pay into the fund to keep it solvent.

"The last conversation I want to be involved in is one in which claims exceed the contributions," Soltis said.

Despite small business concerns, the chairs of legislature's Labor Committee ignored bipartisan calls for reforms.

He said the authority has four immediate goals:

  • Get up and running as a $300-$400 million business
  • Have the technology in place for tax collections
  • Do significant public outreach to employers and employees
  • Develop working relationships with other state agencies

Tax Collection

Reeves said the authority is researching how other states with FMLA collect those taxes.

"Those details are being worked on as we speak," she said.

Reeves also said the authority is aware of abuse concerns.

"There will always be someone who tries to take advantage of the program."

PFMLIA executive director Andrea Reeves

"There will always be someone who tries to take advantage of the program," she said. "Our goal is to reduce that."

Reeves said their process will monitor claims.

"We don't want people to have 18 grandmothers and 67 cousins," she said.

"It's everyone's paycheck and we take that seriously."

Paperwork

Reeves said she doesn't envision a large amount of paperwork for small businesses.

The 0.5% payroll tax applies to all private sector workers, even if they don't use the program or their employer already offers leave.

Most public sector employees are exempt from the tax.

The 0.5% payroll tax applies to all private sector workers, even if they don't use the program or their employer already offers leave.

The program gives employees up to 95% of pay, capped at 60 times the minimum wage—$900 a week when the hourly minimum wage reaches $15 in 2023.

Employers must still pay for benefits for employees on leave.

Reeves said the authority sought input from companies of all sizes and encourages any employer with concerns or questions to email her.


For more information, contact CBIA's Mark Soycher (860.244.1900) | @HRHotline