Seyfarth Synopsis: Earlier this week, Connecticut became the seventh state with a paid family leave program when Governor Ned Lamont signed the Paid Family and Medical Leave (“CPFML”) Act. CPFML premium withholdings begin on January 1, 2021 and covered employees can start receiving CPFML benefits on January 1, 2022.
On June 25, 2019, Connecticut Governor Edward “Ned” Lamont signed Public Act. No. 19-25, known as the Connecticut Paid Family and Medical Leave (“CPFML”) Act, into law. This comes after months of disagreement between Connecticut lawmakers and Governor Lamont on how best to setup a CPFML program. Signs pointed towards a resolution when the Connecticut Legislature passed the current version of the CPFML on May 31, 2019. Now, following Governor Lamont’s approval, Connecticut is the seventh state in the country to have enacted a comprehensive paid family leave program.[1]
Most notably, the CPFML Act creates a new paid leave program. In addition, the CPFML amends the Connecticut Family and Medical Leave Act (“CFMLA”), expanding the reasons employees may take leave and the amount of leave available to employees. Like certain other state paid family leave laws,[2] the CPFML appears to be fully employee-funded. The employee contribution amount will be established by the Connecticut Paid Family and Medical Leave Insurance Authority (the “Authority”) in the coming months. Employers must begin to collect contributions as of January 1, 2021. Employees will be able to start receiving CPFML benefits, as discussed below, starting January 1, 2022.
Interplay Between CPFML and CFMLA
The CPFML, in part, is an amendment to the CFMLA. Based on the drafting, it appears that the Connecticut Legislature envisioned that the two leaves would work together. The CPFML Act will provide wage replacement benefits up to a maximum of 14 weeks depending on the nature of the absence. The CFMLA has been revised to allow a similar 14-week maximum potential leave in a 12-month period – a more generous allotment than the 16 weeks in a 24-month period that the CFMLA currently permits. This and other amendments to the CFMLA go into effect on January 1, 2022.
CPFML and CFMLA are designed to run concurrently when used for reasons covered by both laws and the employee has time available under both laws. However, based on certain considerations, including different employee eligibility standards, this may not always be the case. In such situations, the employee may be entitled to benefits under and subject to the conditions of one law but not the other.
Regulations and administrative guidance on the CPFML, the amended CFMLA, and their interaction are expected in the coming months and years. While employers await clarification on certain aspects of CPFML, here is a summary of the CPFML’s key provisions.
Summary of CPFML’s Key Provisions
Covered Employers
“Employer” is defined broadly as any entity that employs one or more employees. Thus, CPFML will affect virtually all private employers in Connecticut. As of January 1, 2022, “employer” under the CFMLA will also be expanded to entities with one or more employees – a significant change from the law’s current 75-employee threshold.
Covered Employees
To be considered a covered employee for CPFML purposes, an employee must have earned at least $2,325 during the employee’s highest earning quarter within the base period[3] and meet any of the following conditions: (1) is presently employed; (2) was employed by the employer within the previous 12 weeks; or (3) is self-employed or a sole proprietor and Connecticut resident enrolled in CPFML.
To be eligible for leave under the amended CFMLA, effective January 1, 2022, an employee must have been employed for at least three months by the employer from whom leave is requested. To be eligible under the current CFMLA, an employee must be employed for 12 months and have completed 1,000 hours of service before the first day of leave. Thus, as of January 1, 2022, the CFMLA will apply to a much larger number of employees than it does today.
Amount and Reasons for Leave
The CPFML Act will provide 12 weeks of CPFML benefits in a 12-month period for eligible employees who are absent for one of the below covered reasons. Importantly, where an employee is absent due to a serious health condition resulting in incapacitation that occurs during a pregnancy, she may be entitled to two additional weeks of CPFML benefits (i.e., for a total of 14 weeks in a 12-month period).
Employees can receive CPFML benefits for the following reasons:
- to care for a family member of the employee with a serious health condition;[4]
- for the employee’s own serious health condition;
- to bond with a newly born, adopted, or fostered child;
- to serve as an organ or bone marrow donor;
- in connection with a qualifying military exigency of the spouse, son, daughter, or parent of the employee, in accordance with the federal Family and Medical Leave Act (“FMLA”);
- military caregiver leave;[5] or
- certain absences related to the employee’s status as a victim of family violence.[6]
The first six bullet points above also are covered reasons under the CFMLA. However, the final bullet point dealing with absences related to family violence incidents is only covered under the CPFML.
Covered Family Members
Effective January 1, 2022, the definition of “family member” under both the CPFML and CFMLA will include a (1) spouse, (2) son or daughter, (3) parent, (4) parent-in-law, (5) sibling, (6) grandchild, (7) grandparent, or (8) an individual related to the employee by blood or whose close association to the employee is the equivalent of those family relationships.[7] Newly covered family members, in contrast to covered family members under the current CMFLA, are in bold. These relatives may be related by blood, marriage, adoption, and foster relationships. In addition, step-parents and legal guardians who stood in loco parentis to the employee when the employee was a child are considered “family members” under the CPFML Act.
Benefits
CPFML will serve as a wage-replacement, with caps tied to the state minimum wage. Governor Lamont recently signed House Bill No. 5004, which will gradually increase Connecticut’s minimum wage to $15 an hour by June 2023.
Beginning January 1, 2022, covered employees may be entitled to CPFML benefits as follows:[8]
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Employee’s Base Weekly Earnings (“BWE”)[9]
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CPFML Weekly Benefit
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Less than or equal to 40 times the minimum wage
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95% of BWE, up to 60 times the minimum wage
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Greater than 40 times the minimum wage
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60% of BWE, up to 60 times the minimum wage
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Based on the recently signed Connecticut minimum wage increases, in 2022, CPFML benefits will be capped at approximately $780-$840 per week. As of June 1, 2023, when the minimum wage will reach $15 per hour, CPFML benefits will top off at approximately $900 per week.
Funding of CPFML
The CPFML program will be funded through employee payroll deductions. The CPFML Act imposes an obligation on employers to “deduct and withhold” the necessary amounts from employee wages, so at this time, it appears that employers do not contribute to the PFML program. The amount of deductions cannot exceed 0.5 percent of an employee’s earnings that are subject to Social Security taxes.
Substitution of Employer-Provided Paid Leave
Generally, when an employee is absent for a covered reason (as set forth above), an employer may require, or the employee may choose, to substitute certain forms of accrued paid time off (depending on the nature of the absence) for any part of the 12-week (or, in the case of military caregiver leave, 26-week) period. However, this right is not unlimited, as the amendment allows employees to retain at least two weeks of paid time off in their banks. We expect forthcoming regulations and administrative guidance will address and clarify these provisions. We will keep you posted on developments.
Intermittent Leave
When an employee is absent for bonding, CPFML benefits are only available on an intermittent basis or on a reduced leave schedule if the employer agrees to such an arrangement. When an employee is absent for a serious health condition (self or family member) or for military caregiver leave, CPFML benefits are available on an intermittent basis only when it is medically necessary.
In addition, if (a) an employee requires intermittent leave for a planned medical treatment and (b) the employee is absent for a serious health condition (self or family member), military caregiver leave, or organ or bone marrow donation, the employer can temporarily transfer the employee to an available alternative position for which the employee is qualified, as long as it offers equivalent pay and benefits and better accommodates the intermittent leave.
Private Plan Exemption
The CPFML Act provides that employers will be able to satisfy their CPFML obligations through a private plan as long as the plan meets the following criteria:
- confers all of the same rights, protections and benefits provided by CPFML including at least the same number of weeks of benefits, at the same wage replacement, and coverage for the same reasons;
- imposes no additional conditions or restrictions on the use of the leave beyond those explicitly authorized under the CPFML Act;
- does not cost employees more than CPFML through the state;
- provides coverage for all employees throughout employment;
- provides for inclusion of future employees;
- does not adversely select members and does not threaten the state fund or endanger the solvency of the fund;
- was approved by a majority of employees (subject to other requirements of the bill); and
- meets any additional requirements established by the Authority.
Employers seeking to use such a private plan must apply to the Authority for approval of the private plan.
Notice to Employees
As of July 1, 2022, the CPFML will require employers to distribute written notice, at the time of hire, and each year thereafter, to employees concerning certain rights under the CPFML. As of now, the CPFML does not impose any specific corresponding posting obligation on employers.
Job Protection
While the CPFML Act on its own likely does not provide job protection to employees who are absent for a covered reason and receive CPFML benefits, this is a gray area under the new law. We expect the Authority will clarify this point before employees begin receiving CPFML benefits in 2022.
Employer Takeaways
In the coming months, Connecticut employers should consider whether to apply for the CPFML private plan exemption, and keep an eye on the various effective dates for collecting the employee contribution, when paid leave benefits begin, and when additional rights are afforded to employees. Seyfarth will continue to track developments concerning this and other paid leave laws.
[1] Paid family leave laws currently exist in California, New York, New Jersey, Massachusetts, Rhode Island, Washington, Washington, DC, and San Francisco (CA). Certain aspects of several of these laws are not yet in effect, although they are scheduled to go into effect in the coming months and years.
[2] This includes the paid family leave laws in California, New Jersey and Rhode Island.
[3] "Base period" means the first four of the five most recently completed quarters.
[4] Under the CFMLA and CPFML, a “serious health condition” is defined as an illness, injury, impairment, or physical or mental condition that involves (a) inpatient care in a hospital, hospice, nursing home or residential medical care facility; or (b) continuing treatment, including outpatient treatment, by a health care provider.
[5] Entitles the employee to a one-time benefit of 26 workweeks of leave during any 12-month period for each appropriate armed forces member per serious injury or illness incurred in the line of duty.
[6] Specifically, employees are entitled to use CPFML if they are victims of family violence and the absence is reasonably necessary (1) to seek medical care or psychological or other counseling for physical or psychological injury or disability for the victim, (2) to obtain services from a victim services organization on behalf of the victim, (3) to relocate due to such family violence, or (4) to participate in any civil or criminal proceeding related to or resulting from such family violence.
[7] The state is expected to release guidelines regarding factors to consider when determining whether an individual’s close association with an employee is the equivalent of a family relationship.
[8] An employee cannot receive unemployment or workers’ compensation benefits at the same time as CPFML benefits.
[9] “Base weekly earnings” are defined as an amount equal to one-twenty-sixth, rounded to the next lower dollar, of the covered employee’s total wages or self-employed income earned during the two quarters of the covered employee’s Base Period (as defined above) in which the earnings were highest.
