The state of Connecticut has joined about 87,000 other employers in collecting a payroll deduction to support its own paid family medical leave law, the Connecticut Paid Leave Authority and state comptroller reported Tuesday.
The program anticipated the .5% deduction from paychecks as of Jan. 1. During a press conference, State Comptroller Kevin Lembo said about 18,500 non-union state workers were required to pay into the fund but had not been making their contributions due to complications with the state’s Peoplesoft payroll system. Lembo said those workers would pay a 1.5% deduction until June 30 to catch up.
“It’s been complicated. It’s not a surprise. It’s been difficult. We’re a large employer as the state of Connecticut and we have lots of employment rules but I’m happy to live in a state that is willing to do hard things to help people,” Lembo said.
The problem with the payroll system stemmed from the state’s employment of both unionized and nonunionized workers, he said. Union workers are not required to pay into the program because their negotiated benefits already include family leave provisions.
However, some of those workers fall occasionally in both categories depending on which job they are operating in. That means applying a blanket deduction would fail to catch the right swath of the workforce, he said.
“There was a subset of that group that had both unionized and nonunionized income and we could only apply the deduction to the nonunionized part of their compensation. We were sort of alone on that,” Lembo said.
The program, which was adopted by the legislature in 2019, will allow workers to take up to 12 weeks of paid leave for medical and family emergencies when its benefits become active in 2022. The leave authority has reached out to state employers and held periodic events to encourage them to register and begin deducting the fee from workers’ paychecks. So far, Connecticut employers have remitted $2.93 million to fund the program.
However, it has had some difficulty gaining full compliance. The authority’s CEO, Andrea Barton Reeves, estimated Tuesday there were between 104,000 and 108,000 employers impacted by the law. Around 87,000 had so far registered with her organization. The number is a significant increase over March, when only 66,000 had registered, but still leaves some workers not making their required contributions.
Barton Reeves said she was optimistic that more businesses would get into compliance soon. She said many of the remaining hold-outs were very small employers who are likely unaware of the requirements.
“Now we’re really down to the small employers, the ones who are one or more . . . They may have two people. Many of them are still not aware because they’re not a part of a large trade association. They don’t belong to a local chamber of commerce. We are literally seeking them out business by business,” she said.
Although Barton Reeves was reluctant to discuss imposing penalties on businesses who do not register to make the deductions, she acknowledges the state could look to businesses rather than their workers to make the required contributions – if they do not respond to “good faith” efforts by her organization to engage them.
“Penalizing them, from our perspective, is not the way to encourage them right now. So after we’ve done all of this work and we still have some we believe will not be compliant, that’s when penalties seem appropriate,” she said.