Employment Law Articles

     Although Connecticut is already one of the most highly regulated states when it comes to employment law, government officials are currently considering a number of changes that would impose greater employer requirements in the areas of non-compete agreements, disclosure of salary ranges, and paid sick leave.

       Non-Compete Agreements

      Aside from current attempts by the federal government to possibly outlaw or severely restrict non-compete agreements, a bill introduced in Connecticut would significantly limit them. HB 6594. In particular, non-compete agreements signed on or after 7/1/23 would be enforceable only if they were limited to one year in duration following termination, and tailored to protect a legitimate business interest that could not be reasonably protected by some other means like a non-disclosure or non-solicitation agreement. Further, the law would impose limits on geographic scope, type of work prohibited, and the type of employee restricted.

      The 1 year restriction period could be enlarged to 2 years if the employee was paid their base salary and benefits, minus interim earnings, during that 2 year period. Geographic restrictions beyond locations where the employee provided services or had a material presence during their final 2 years of employment, or banning work the employee did not perform during their final 2 years would be presumptively unenforceable.

      In addition, only exempt employees earning 3 times the minimum wage, or independent contractors earning 5 times the minimum wage could be required to sign such an agreement.

      Employees would be given a 10 day review period, and the non-compete agreement would have to include a statement that informs them that not all non-competes are enforceable, that employees earning less than the statutory minimum (3x or 5x the minimum wage) cannot be made to sign a non-compete, that they may contact the Attorney General if they believe they are being asked to sign an illegal non-compete, and that they have the right to seek legal counsel before signing a non-compete. Any non-compete would have to be stipulated in an agreement separate from any other agreement or writing.

      The law would also clarify that continuing employment alone is insufficient consideration for a non-compete. Also, an employee quitting for good cause attributable to the employer would not be subject to the non-compete agreement, and Connecticut would become the sole forum for any non-compete related disputes.

     It would also ban agreements restricting the right to solicit customers and employees for periods greater than one year, by bringing them into coverage under the new law.

      Further, exclusivity agreements banning an employee from working for others or as an independent contractor while still employed by the employer would be outlawed, unless the person is an exempt employee earning the statutory amounts (3x and 5x the minimum rate), or the employee’s engagement in other work would imperil the worker’s safety, the safety of co-workers, or the public, or would substantially interfere with reasonable and normal scheduling expectations.

      Aside from the right of the Attorney General to file in the Superior Court, employees could file directly. Relief includes actual damages, or a $5,000 penalty, whichever is greater, plus attorneys’ fees and costs.

       Salary Range Disclosure

      Connecticut already requires employers to provide the salary range to applicants for the job applied for, and to employees for their job. 31-40z. The legislature is now considering expanding the scope of disclosure by requiring employers to disclose salary ranges in all public and internal job postings. HB 6273. These steps are being pursued in order to decrease the gender wage gap.

       Paid Sick Leave

     Under current Connecticut law, certain non-exempt service workers are covered by a paid sick leave law, if they work for an employer with 50 or more employees. Recently proposed legislation would greatly expand such coverage requiring all employers with 11 or more employees to provide 40 hours of paid sick leave each year to all employees. Employers with 10 or less employees would have to provide 40 hours of job protected, unpaid sick time. Gov Bill 6668.

      Full-time, part-time and temporary employees would accrue 1 hour of sick time for each 30 hours worked to a maximum of 40 hours per year. Employers with fewer than 11 employees who already provide paid sick leave could offset the 40 hours required under the law by the amount of paid sick leave provided. Employers with at least 11 employees could also offset the requirements of the law with any already provided paid leave, provided such leave policy permits accruals and usage as outlined in the law.

      If passed, the law will take effect January 1, 2024.

     Connecticut private sector employers with 5 or more employees who do not already offer a qualified retirement savings plan must register with the Connecticut Retirement Security Authority and begin enrolling employees in the state sponsored retirement program, MyCTSavings, by March 30, 2023. Employers who do offer a qualified plan must certify they do so with the Authority.  

      The program, first launched in 2022, is reaching its enrollment deadline. So far, some 900 employers have enrolled, and plan assets have reached $1.7 million dollars.

      Under the program, Connecticut based employees who have worked at least 120 days for a qualified employer, and are age 19 or older, are automatically enrolled by their employer. The employer must provide certain program documents to the employee upon enrollment.

      Once enrolled by the employer, the employee will receive a notification from the third party Program Administrator. The employee then has 30 days to establish an online account to manage their contribution levels and investment choices.

      During the 30 day period following notification from the Program Administrator, the employee may opt out of the program by changing their contribution level to 0%, or remain in the program and select their level of contribution and investment options.

      If the employee does nothing, the default contribution level is 3% of earnings. All contributions are placed in an individual Roth IRA and held in a Target Retirement Date Portfolio based on the employee’s normal retirement age. Employer contributions are not permitted.

      Assuming the employee does not opt out, payroll deductions will begin once the 30 day period following notification from the Program Administrator ends.

      Employees may thereafter change their contribution level, investment options, opt out or back in, at any time. The funds in the Roth IRA are portable so that if an employee changes jobs their account follows them.

      Employees who are not properly enrolled in the program by their employer may contact the Connecticut Department of Labor or directly bring a civil action in the Superior Court to force enrollment and recover costs and attorney’s fees.

      Employers and employees can access the Authority’s website here. More detailed information about the Program is provided here.  

     In the past, employers generally had the right to require employees to sign pre-dispute arbitration agreements, which prohibited them from filing workplace related claims in court. Also, such agreements could restrict their right to bring joint or collective actions. In essence, employees could be required to arbitrate their claims individually, even if the employer’s actions affected multiple claimants. In addition, any settlement, whether in a court or arbitration proceeding often included a non-disclosure, non-disparagement provision preventing the plaintiff from speaking out about their claims, or the terms of the settlement.

      This framework changed significantly for victims of sexual harassment and sexual assault in 2017 through the #MeToo Movement following revelations of Harvey Weinstein’s long history of misconduct toward women dependent on him for career advancement.

      Initially, the federal government made it more costly for employers to hide the terms of any sexual harassment/sexual assault settlement by eliminating the right to a tax deduction for settlement payments and attorney’s fees where the settlement agreement contained a non-disclosure provision. More specifically, the IRS Code was amended so that “for amounts paid or incurred after December 22, 2017, new section 162(q) provides that no deduction is allowed under section 162 for any settlement or payment related to sexual harassment or sexual abuse if it is subject to a nondisclosure agreement. In addition, attorney’s fees related to such a settlement or payment are not allowed as a deduction.”

      Then in March 2022, President Biden signed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act that outlawed pre-dispute mandatory arbitration agreements for sexual harassment and/or sexual assault claims. This gave victims the right to file in court as opposed to being required to have their claims heard in arbitration. Employees retained the right to go to arbitration, if agreed to by the employer. Court proceedings offer greater public access to the claims and outcomes than private arbitration.

      The Act also banned any pre-dispute agreement that prohibited an employee from participating in a joint, class, or collective action in a judicial, arbitration, administrative or other forum in cases alleging sexual harassment or assault brought under any Federal or State law

      Further, any issue arising over the interpretation of the rights granted by the Act are determined under Federal Law by a court, and not an arbitrator, regardless of what the underlying agreement between the parties may say.

      More recently, President Biden signed the Speak Out Act on December 7, 2022. It bans pre-dispute non-disclosure and non-disparagement agreements that prevent claimants from speaking out about alleged sexual harassment and assault in the workplace.

      In the Findings supporting the Speak Out Act, Congress articulated its reasons for passing the new law. It found that 81% of women and 43% of men experience some form of sexual harassment or assault during their lifetime. Among women facing sexual harassment, 87%-94% never file a formal complaint. In order to combat harassment, the ability to speak out offers a powerful tool to encourage survivors to come forward, hold perpetrators accountable, and make the workplace safer.

      Taken together, these three laws prevent pre-dispute non-disclosure agreements, pre-dispute mandatory arbitration agreements, and pre-dispute joint/collective action restrictions in matters related to sexual harassment and sexual assault. They also remove the tax deductibility of any costs and legal fees incurred where a settlement agreement involving sexual harassment/assault contains a non-disclosure provision.

      Given the high cost and negative publicity associated with sex related misconduct, it is incumbent on employers to have strict policies in place, provide on-going training, take complaints seriously, and deal with violators quickly and severely.

     The Connecticut Appellate Court recently found that continued employment of at will employees, without more, can constitute sufficient consideration for post-hire restrictive covenant agreements . Schimenti Construction Company v. Joseph Schimenti. The case law in this area has historically been murky, with some lower courts holding continued at will employment, without some added compensation or improvement in terms and conditions of employment, is inadequate consideration as a matter of law to support a post-hire restrictive covenant agreement. Other courts have found it is sufficient under some circumstances. Restrictive covenant agreements normally include non-compete, non-solicitation, and/or non-disclosure provisions.

      In the instant case, the employee, a project manager for a construction management firm, was first employed as an at-will employee. Several years later the employee sought greater responsibilities and the owner agreed to promote him to managing director. In return the employee was asked to sign a restrictive covenant agreement containing non-compete, non-solicitation and non-disclosure provisions. The new job was conditioned on the employee signing the agreement. The employee received no increase in base pay or benefits at the time of signing, but would be eligible in the future for greater compensation if he met certain performance targets.

      Four years later, the employee quit his job and took a job with a competitor in violation of the restrictive covenant agreement. The company sued and the employee claimed the agreement was invalid for lack of consideration. The company argued that continued employment as an at-will employee, the promotion offering greater responsibility, and the potential for higher compensation was sufficient consideration.

      The trial court sided with the employee and found that the only actual consideration offered was continued at will employment, which in its interpretation of Thoma v Oxford Performance Materials, Inc., 153 Conn. App. 50 (2014) , was insufficient as a matter of law. In Thoma, the Appellate Court stated that a party giving nothing more than the status quo of continuing employment, and offering no additional benefit, had failed to provide sufficient consideration for a restrictive covenant agreement. The trial court read Thoma to mean that continuing at will employment, without more, can never be adequate consideration as a matter of law.

      The Appellate Court disagreed with the Schimenti trial judge and clarified that continuing at will employment can be sufficient consideration, but did not go so far as to say that it will always be sufficient consideration.

      In describing the contours of when continuing at will employment may be sufficient, the Appellate Court first cites Roessler v. Burwell , 119 Conn. 289 (1934). In that case, the employee signed a non-solicitation agreement several years after first working for the company with the only consideration taking the form of continued at-will employment. Five years later the employee quit and engaged in conduct prohibited by the agreement. The employer sued and the trial court and Supreme Court ruled in the employer’s favor. In citing Roessler , the Appellate Court found that continued employment can be sufficient consideration in some circumstances, including when the facts show that signing the agreement was a condition of continued employment, and that the employee continued to work for a period of time after executing the agreement, and then quit voluntarily.

      In sum, while continued employment may not always be sufficient consideration for a restrictive covenant agreement, it is now clear it is not insufficient per se as a matter of law. When an employee is required to sign a restrictive covenant agreement to remain employed, and continues to work for a period of time, and then quits, the agreement will likely be enforced as the employee received the benefit of his bargain by continuing to work for the employer. Unanswered by the decision is how long an employer must wait to involuntarily discharge an employee after the agreement is signed for the court to conclude the employee received adequate consideration in return for signing the restrictive covenant agreement.

      While the courts have now provided some clarification on sufficient consideration for post hire restrictive covenant agreements, President Biden has recently signed an Executive Order encouraging the Federal Trade Commission to ban or limit non-compete agreements nationwide. It is unclear what steps the FTC will take, and any action will likely draw litigation. In the meantime, employers in Connecticut may continue to use restrictive covenants, but must insure adequate consideration is provided in return for the restrictions imposed on employees.

     In order to make it easier for individuals with prior criminal records to find work and avoid discrimination, Connecticut’s Clean Slate Act expands current protections and widens avenues of relief.   Public Act 21-32

     More specifically, effective 1/1/23, the new law streamlined the process for erasing some criminal records, made certain employer actions a violation of the Connecticut Fair Employment Practices Act (CFEPA), and permitted applicants and employees to bring certain alleged violations directly to the Connecticut Commission on Human Rights and Opportunities (CHRO) or the Superior Court, instead of the Connecticut Department of Labor.

     Generally, misdemeanors will be erased 7 years after the date of conviction, while many  Class D and E felonies carrying a term of imprisonment of not more than 5 years will be erased after 10 years. Various youthful offenses will continue to be erased as they have in the past. More serious crimes, and motor vehicle related criminal histories, will not be subject to erasure.

     Under the new provisions of Conn. Gen. Stat. §31-51i , employers with one or more employees cannot inquire about a prospective employee's prior arrests, criminal charges or convictions on an initial employment application, unless (1) the employer is required to do so by an applicable state or federal law, or (2) a security or fidelity bond or an equivalent bond is required for the position for which the prospective employee is seeking employment. Further such employers may not require an employee or prospective employee to disclose the existence of any “erased criminal history record information.”  

     “Erased criminal history record information” is defined as (A) criminal history record information that has been erased pursuant to section 54-142a of the general statutes, as amended by this act, or section 54-76o of the general statutes, or any other provision of the general statutes or other operation of law; (B) information relating to persons granted youthful offender status pursuant to section 46b-146 of the general statutes; and (C) continuances of a criminal case that are more than thirteen months old.

     Although initial employment applications may not contain questions regarding arrests, charges or convictions, except as permitted above, if an application or other document is completed later in the employment process, the employer can ask about criminal history, but any such document must contain a notice, in clear and conspicuous language, as follows:

     (1) The applicant is not required to disclose the existence of any erased criminal history record information (2) that erased criminal history record information are records pertaining to a finding of delinquency or that a child was a member of a family with service needs, an adjudication as a youthful offender, a criminal charge that has been dismissed or nolled, a criminal charge for which the person has been found not guilty or a conviction for which the person received an absolute pardon, or criminal records that are erased pursuant to statute or by other operation of law, and (3) that any person with erased criminal history record information shall be deemed to have never been arrested within the meaning of the general statutes with respect to the proceedings so erased and may so swear under oath.

     The law also prevents an employer from denying employment to a prospective employee solely on the basis that the prospective employee has erased criminal history record information or that the prospective employee had a prior conviction for which the prospective employee has received a provisional pardon or certificate of rehabilitation pursuant to section 54-130a, or a certificate of rehabilitation pursuant to section 54-108f.

     In addition, no employer can discharge, or discriminate against any employee solely on the basis that the employee has erased criminal history record information or that the employee had, prior to being employed by such employer, a prior conviction for which the employee has received a provisional pardon or certificate of rehabilitation pursuant to section 54-130a, or a certificate of rehabilitation pursuant to section 54-108f.

     All employment records containing criminal history information may only be made available to members of the HR department, or the persons in charge of employment, including those involved in the interview process.

     Further, consumer reporting agencies who do background checks for employers must make sure the data they supply reflects the erasure requirements by updating its records and deleting any erased records not later than 30 days after receipt of information that a record has been erased.

     The new law now permits certain violations of 31-51i to be covered as a discriminatory employment practice under the CFEPA, and those complaints must now be brought to the CHRO or the Superior Court instead of to the Connecticut Department of Labor.

     Employer actions such as unlawfully asking about criminal arrests, charges, or convictions on an initial employment application; failing to include the required non-disclosure statement on an employment application; failing to hire an applicant, or discharging or discriminating against an employee based on erased criminal history record information, a pardoned crime, or a crime in which a certificate of rehabilitation was issued will now violate the CFEPA.

     The CT DOL shall continue to investigate unlawful employer actions such as a disclosure of erased criminal history record information, disclosures of criminal records outside of HR or managers with a right to know, and consumer reporting agency violations.

     To comply with the new law employers should review their employment applications and make sure they do not include criminal history questions if used as the initial fact gathering document. If used later in the process, the application must include the required non-disclosure statement. EEO policies should also include the new protected class of “individuals with erased criminal history records, pardons, or certificates of rehabilitation.”

Effective October 1, 2021, breastfeeding employees will be eligible for some expanded comforts. Current law requires an employer with one or more employees to provide a room, or other location, in close proximity to the work area, other than a toilet stall, for an employee to express milk in private. The new law provides that unless doing so creates an undue hardship on the employer, the room provided to the employee shall be free from intrusion and shielded from the pubic while the employee expresses breast milk, and include, or be situated near, a refrigerator, or employee provided portable cold storage device in which the employee can store her breast milk, and include access to an electrical outlet.

To claim undue hardship, an employer will need to show significant difficulty or expense when considered in relation to the size of the business, its financial resources, and the nature and structure of its operation.

Effective October 1, 2021, Connecticut employers will be required to inform applicants of the wage range of the job applied for upon the applicant’s request, or prior to, or at the time the applicant is made an offer of compensation, whichever is earlier. In addition, employers must provide similar information to current employees regarding the employee’s position upon hire, a change in position within the company, or the employee’s first request for the information. A copy of the law can be found here.

“Wage” is defined as compensation for labor or services rendered by an employee, whether the amount is determined on a time, task, piece, commission, or other basis. “Wage range” means the range of wages an employer anticipates relying on when setting wages for a position, and may include reference to any applicable pay scale, previously determined range of wages for the position, actual range of wages for those employees currently holding comparable positions, or the employer’s budgeted amount for the position.

The current law banning employers from prohibiting employees from disclosing their wages, or inquiring about the wages of another employee, remains in place. Also, the current law that prevents an employer from inquiring about a prospective employee’s wage and salary history, or the value of the applicant’s compensation structure, continues in effect.    

Job applicants and employees may bring a civil action within 2 years of any alleged violation. Damages include compensatory and punitive damages, along with attorney’s fees.           

Aside from the disclosure of wage ranges, the new law widens the test for gender based pay discrimination by substituting the standard of “equal pay for equal work,” with “equal pay for comparable work.”  

Under the new rule, if an employee can show gender based unequal pay for comparable work, when considering the skill, effort, responsibility, and working conditions of the two jobs, the burden shifts to the employer who must show the difference is based on a seniority system, merit system, a system that measures earnings by quantity or quality of production, or a differential system based on a bona fide factor other than sex, including but not limited to education, training, credentials, skill, geographic location, or experience. Any factor relied on by the employer cannot be based on or derived from a sex-based differential in compensation, and must be job related and consistent with business necessity. The employer’s defense shall not prevail where the employee demonstrates that an alternative employment practice exists that would serve the same business purpose, without producing the pay differential, and that the employer refused to adopt the alternative practice.

Employees may file a complaint with the labor commissioner, and barring investigation, can then file a court action.

While recreational use of marijuana became legal in Connecticut on July 1, 2021, employment related provisions of the new law will not be effective until October 1, 2021, and more dramatically on October 1, 2022. Here is the text of the new law , as well as a summary .

Overview

The new law does not impact the rights of medical marijuana users. Such individuals cannot be denied employment for off-duty use of medical cannabis, unless such use would make them ineligible for employment under federal regulations issued by agencies including the DOT and FAA. Medical marijuana users are not permitted to be under the influence while at work.

Effective October 1, 2021, all employers must prohibit smoking and vaping of tobacco and cannabis “in any area of any business facility under its control.”  This includes all interior spaces, as well as within 25 feet of doors, operable windows, and air intakes. Employers can also prohibit smoking anywhere on its real property.

Previously, employers with 5 or more employees were permitted to establish smoking rooms/areas within the building, or outside. Employers with less than 5 employees were able to permit smoking anywhere, except in designated non-smoking areas.

Given the change to the law, all employers should review their smoking policy and update it by October 1, 2021.

Effective October 1, 2022, most employers with one or more employees must comply with several key aspects of the new law. The most effective way of doing so is to have a comprehensive written policy outlining the company’s position on specific issues, including applicant testing, workplace prohibitions and employee testing, and off-duty use.

Until October 21, 2022, any rules or policies impacting recreational cannabis use need not change, and employers retain the right to screen applicants, deny employment to those testing positive, and terminate employees possessing, using, or testing positive for cannabis, regardless of whether the use was on or off-duty. Employers must continue to follow state drug testing laws , and must not discriminate against employees using tobacco off-duty.

Applicant Testing

Under the new law, an employer must decide whether it will test applicants for cannabis use. If so, it can withdraw a conditional offer following a positive test, provided it has a written policy permitting the testing, and clearly articulates that an offer will be withdrawn based on a positive test result. For the policy to be enforceable, the candidate must be given a copy of the employer’s policy at the time of any offer.

While the law states in one section that employers may not penalize pre-employment use of cannabis, except where doing so would put the employer in violation of a federal contract or cause it to lose federal funding, §97(2)(B), it goes on to say that nothing in §§97-101 shall limit an employer from subjecting an employee or applicant to drug testing, or from taking adverse action, including rescinding a conditional job offer, provided it has a policy spelling out the consequences for failing a pre-hire drug screen. Therefore, while the law’s text is somewhat contradictory, the general overriding language should prevail and permit the recission of a job offer based solely on a positive test, provided a copy of the policy was given to the candidate in a timely fashion.

Workplace Prohibitions and Testing

The new law permits employers to prohibit cannabis use during work hours, and during on-call periods. To be considered “on-call,” the employee must be given at least 24 hours’ notice, and be paid for the duration of the on-call period. For purposes of the Act, the term “employee” includes independent contractors.

As part of its right to maintain a drug and alcohol free workplace, employers may also continue to ban workplace possession, and test those it reasonably suspects of on the job, or on-call, cannabis use. The “workplace” includes any building, real property, parking area, area used by an employee while performing work, as well as employer vehicles. This would include remote work sites.

As opposed to tests for unlawful drugs, a confirmed positive test for cannabis will normally not be enough to take adverse action against current employees. Even if the new positive test standard of “11-nor-9-carboxy-delta-9-tetrahydrocannabinol” is met, any such positive test must be accompanied by a reasonable suspicion that the employee was using cannabis while working or on call. Reasonable suspicion will be supported when the employee manifests specific symptoms like changes in speech, dexterity, agility, coordination, demeanor, behavior or carelessness. In addition, safety violations, disruptions in production, and other similar conduct would support reasonable suspicion.

Reasonable suspicion need not be proven if the positive test alone places the employer in a position where it could lose a federal contract, or funding, or the positive test result stemmed from a random testing program, or a fitness for duty evaluation, outlined in the employer’s written policy, provided such testing complies with federal and Connecticut drug testing rules.

  Off-Duty Use

 Employers will also have the option to ban off-duty possession, use, or consumption of recreational cannabis, provided it is contained in its written policy. By doing so an employer could rely on a lawfully obtained positive test result, regardless of where the use took place. Current employees, however, cannot be penalized for any off-duty use prior to their employment with the employer, or before the issuance of the employer’s policy, whichever is later, unless failing to do so would put the employer in violation of a federal contract, or cause it to lose federal funding. An applicant’s pre-hire positive drug test, however, can result in adverse action, provided such scenario is prohibited by the employer’s policy.

Exemptions

Certain employers are exempt from the new Act, and can operate as they do currently, without following the new law’s requirements. Exempt employers include those primarily engaged in mining, utilities, construction, manufacturing, transportation or delivery, education, health or social services, justice, public order or safety activities, and national security or international affairs.  

In addition, any employee working for an exempt employer, and firefighters; EMTs; police officers; CDL drivers; certain construction workers; security clearance holders; supervisors of children, medical patients, or vulnerable persons; workers in jobs where recreational cannabis use violates obligations under federal law or contracts; or employees whose individual employment contact or collective bargaining agreement bans the use of cannabis; are also exempt from the law’s protections.

Violations

Employees who believe they have been treated in violation of the law may bring a civil action within 90 days of the violation. Relief is limited to reinstatement, back-pay, and attorneys’ fees and costs.

While the new law permits recreational use, under specific conditions, it clearly does not offer applicants and employees unfettered freedom to use cannabis off-duty. Time will tell how employers decide which rights to exercise regarding the off-duty use of cannabis, and whether they will treat marijuana like they do alcohol, or continue to treat it more restrictively, like illegal drugs.

Key Points

-Update workplace smoking policies by 10/1/21

-Develop a comprehensive drug policy by 10/1/22

     -Include treatment of applicants, and employees, both on the job and off-duty

-New law does not apply to exempt employers, and exempt positions, as defined in the law.

The recently passed American Rescue Plan Act of 2021 (ARPA) extends previously available tax credits through 9/30/21 for employers who voluntarily offer Covid related paid leave, provides involuntarily terminated employees 6 months of COBRA at no cost, and expands certain unemployment compensation programs.

When the Families First Coronavirus Response Act (FFCRA) was passed in March 2020 it required employers with less than 500 employees to provide Emergency Paid Sick Leave (EPSL), and Emergency Family and Medical Leave (EFMLA), through 12/31/20. Employers received a tax credit for any monies paid for EPSL or EFMLA. Under the Consolidated Appropriations Act of 2020 (CAP), such employers were no longer required to provide EPSL or EFMLA beyond 12/31/20, but those who voluntarily did so were permitted to continue taking tax credits through 3/31/21.

Under the ARPA, such employers may voluntarily extend EPSL and EFMLA leave rights through 9/30/21, and continue receiving tax credits through such date for doing so. The ARPA also makes some substantive changes to both the EPSL and EFMLA provisions, however, providing these benefits are completely at the discretion of the employer.

In addition to the 6 initial reasons for EPSL, the ARPA extends the categories of paid leave (up to 10 days) to periods when the employee is getting a Covid-19 vaccine, recovering from any complications due to the vaccine, or the employee is seeking or awaiting the results of a diagnostic test for, or a medical diagnosis of COVID–19, after such employee has been exposed to COVID–19, or the employer has requested such test or diagnosis.

Further, the EFMLA now permits paid time off of up to 12 weeks, instead of the prior 10 weeks, not only for the prior reasons of a school closing or loss of childcare services, but for all reasons covered by the EPSL. Any pay under the EFMLA is limited to 2/3 of earnings up to $200/day, or $12,000 for 12 weeks.

These changes effectively provide up to 14 weeks of pay, with the first 2 weeks (EPSL) paid at either 2/3 to $200/day, or 100% to $511/day, depending on the reason, and the final 12 weeks (EFMLA) paid at 2/3 to $200/day, regardless of the reason.

In addition, under the ARPA, employees who may have exhausted some or all of their 80 hours of leave under the EPSL will, effective 4/1/21, be eligible for a new 80 hours of EPSL entitlement. Employees who have only used a portion of their 80 hours prior to 4/1/21 cannot carry over the unused hours, and will only be eligible for a total of 80 hours effective 4/1/21.

To receive the tax credits, employers may not discriminate in the way employees qualify for EPSL or EFMLA. As such, employers may not discriminate in favor of highly compensated employees, full-time vs. part-time employees, or based on length of service.

Separately, employees involuntarily terminated, or suffering a voluntary or involuntary reduction in hours making them eligible for COBRA, are now entitled to fully paid COBRA from 4/1/21 through 9/30/21. This paid COBRA right is not discretionary and must be provided to any employee meeting the involuntary separation, or reduction of hours criteria. Employees who were COBRA eligible before 4/1/21, but who declined coverage or dropped coverage, must be sent a new enrollment notice to cover the period from 4/1/21 through 9/30/21. The U.S. Department of Labor has developed model notices for employer use. Employers may recover the costs they pay for COBRA through a tax credit. The COBRA subsidy is non-taxable to the employee. The COBRA benefits also apply to smaller employers, with less than 20 employees, who are subject to Connecticut’s benefit continuation statute (Mini-Cobra).

Finally, the ARPA extends the 3 unemployment compensation programs springing from the Covid pandemic. These include the Pandemic Unemployment Assistance Act (PUA) that covers individuals typically not eligible for unemployment compensation like self-employed workers, or those unable to work due to a Covid related reason, which has been expanded from 50 to 79 weeks of benefits; the Federal Pandemic Unemployment Compensation Act (FPUC), which currently provides a $300 weekly supplement through 9/6/21; and the Pandemic Emergency Unemployment Compensation Act (PEUC), which provides 53 weeks of additional unemployment compensation to those whose 26 weeks of state benefits have expired, for a total of 79 weeks of unemployment compensation. The ARPA also makes the first $10,200 of unemployment compensation federally tax free to employees (single or married) with a 2020 adjusted gross income of under $150,000. Each spouse can take a $10,200 exemption.