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February 11, 2021

HR consulting firm warns of new paid leave program pitfalls

Photo | HBJ File Andrea Barton Reeves, CEO of the Connecticut Paid Family and Medical Leave Insurance Authority.
By Liese Klein

Employers need to educate their workers and stay up-to-date on changes in Connecticut’s new Paid Family Medical Leave Act to avoid pitfalls that could result in expensive penalties, HR consulting firm Mercer warned at an event on Wednesday.

More than 300 registered for a Mercer webcast on the new leave program, which required employers to start withholding employee contributions on Jan. 1. The deduction was set at 0.5% of the first $142,800 of wages, with most employees eligible, including part-time and seasonal workers. 

Despite pandemic disruptions to outreach efforts, the state estimates that employee deductions for the new program could top $400 million over the next 12 months, according to Andrea Barton Reeves, CEO of the Connecticut Paid Family and Medical Leave Insurance Authority. Workers can claim the benefits starting Jan. 1, 2022.

Although employees pay for the new program through their contributions, employers are responsible for administering it and should consider third-party vendors as the task becomes more complex, said Rich Fuerstenberg, a senior partner at Mercer.

“There’s a lot of movement and flux,”  Fuerstenberg said. “It’s a good time to look at what is out there and how vendors can help.”

Among the complexities are provisions under the new program that expand the definition of “family member” to include anyone related by blood or “affinity equivalent to a family relationship,” said Jill Birmingham, a Mercer senior associate based in Hartford. 

Connecticut has expanded “family” farther than any other state with a similar program, meaning that employees could claim leave to care for a sibling, best friend or even close neighbor. Under current interpretations of the law, after taking 12 weeks’ leave for caring for a sibling, an employee could then take another 12 weeks in the same year under federal leave provisions to care for a spouse. 

The state has also made it easier for workers to qualify for both medical and family leave, expanding the definition of qualifying conditions beyond disabling illness and including domestic violence, intermittent and caregiver leave. Job protections have also been strengthened for workers claiming leaves.

Final guidelines on these provisions have yet to be provided, Birmingham added, so employers need to stay up to date with state rules to ensure they are complying with the law. 

If employers decide to set up their own private plan to cover family and medical leave, they also need to take note of rules that require employees to vote on approving the plan. A majority of all Connecticut-based employees must OK the plan to move forward, not just employees responding to a request to vote, Fuerstenberg said.

Private plans in Connecticut must cover both family and medical leave, unlike rules in neighboring states like Massachusetts that allow plans to take on only one type of leave, Birmingham said. 

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