New Payroll Tax May Surprise Connecticut Residents

Signed into law by Gov. Ned Lamont in 2019, the Paid Family and Medical Leave program will begin collecting money from workers on Jan. 1, 2021.

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Beginning on January 1 an estimated 1.7 million workers in the state of Connecticut will see a half of a percent of every paycheck go to the CT Paid Leave Authority trust fund. However, they won’t be able to access any paid leave for one year. 

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“I didn’t know this. I don’t think a lot of people know this. So a lot of people are going to be shocked,” Deja Reid of Hartford said.

“We’re really taking the opportunity to talk to as many people as we can to let them know that paid leave is coming,” Andrea Barton Reeves, CEO of the Connecticut Paid Family and Medical Leave Authority, said.

Barton Reeves said she’s trying to get the message out about the program. 

“The idea is to fund the plan in year one so that when benefits become available in 2022 there are resources to pay for those paid leave benefits,” Barton Reeves said. 

Signed into law by Gov. Ned Lamont in 2019, the Paid Family and Medical Leave program will begin collecting money from workers on Jan. 1, 2021. Under the law businesses will be required to manage payroll withholdings starting in January and employees can start accessing benefits in 2022. 

Benefits for those who qualify include up to 12 weeks of paid leave to care for their own health, a newborn child, or a sick family member.

“We will be collecting one half of one percent of wages from employees,” Barton Reeves said.

“Although I am a little bit worried about the tax as I grow older and I start to get more and more jobs and eventually get a life of my own it might be a struggle, especially since I come from a low-income family too. But the paid leave would work out as well so I’m more 50-50 when it comes to that,” Jalissa Sanchez of West Hartford said.

“We’re sensitive to the fact that this is a difficult time for a lot of people across the country and in the world. We’re in the middle of a pandemic. We know that,” Barton Reeves said.

Some organizations are calling on the state to delay implementation of the program. 

“It’s really unfortunate because there are so many people in this state who are struggling, who have either lost work or did not receive the raises that they might normally have received this year,” Eric Gjede, vice president of government affairs for the Connecticut Business and Industry Association, said. 

Gjede said according to Pew Charitable Trusts, Connecticut is dead last in personal income growth and according to the Connecticut Labor Department, it was dead last in job growth in 2019. 

Gjede said his organization will ask the governor and the legislature to delay implementation of the program for a year. 

“We really think the recovery here should be at the top of every lawmakers mind going into the next session,” Gjede said.

Barton Reeves said there’s no reason to delay implementation of the program.

“We know that there is an enormous need for people to take time off to take care of themselves, to take care of their families especially during times like these,” Barton Reeves said.

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