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CT Paid Leave Authority refunds about $2.2M after employers with private plans remitted contributions; penalties set for repeat errors
Summary
Staff reported that employers mistakenly remitted roughly $2.2 million in October to the CT Paid Leave Authority despite having private plans; the Authority is issuing refunds and will enforce escalating penalties for repeat senders to curb repeated overpayments.
Dave, a staff presenter, told the finance committee that some employers with private leave plans have continued to remit contributions to the public program by mistake and that staff are returning those payments after confirming private coverage is in force. “So in October, we refunded about $2,200,000 to 35 employers,” Dave said. He said those refunds represented roughly seven quarters of contributions on average for the employers involved and that staff had no evidence employees paid both plans.
The Authority has processed additional tranches: a $292,000 refund to 27 employers and an estimated $189,000 to 135 employers to be completed by the end of January. Dave said staff verify a private plan is active with legal counsel before issuing refunds; he said refunds are recorded as reductions of contribution revenue rather than operating expenses.
Michael Caesar, legal counsel, described a stepped penalty policy meant to deter repeat overpayments. “The first 2 times that this occurs, no penalties at all. The third time, there’s a $50 penalty. The fourth time, there’s a $100 penalty. The fifth time… it’s the greater of 1% of the amount we refund or a $100,” Michael said. Committee members asked how the Authority confirms recipients received prior communications; staff said they reach out to employers and often contact private carriers when employer contacts have changed.
Committee members pressed for data about whether the issue is concentrated among smaller employers. Dave said the problem is “across the board,” with both smaller and larger employers sending payments in error; the October tranche reflected the largest-dollar errors first. Staff said they will monitor private-plan remittances quarterly, return erroneous contributions within one quarter after identification, and begin assessing penalties for repeat senders.
The committee did not take a formal vote on the refunds themselves; the presentation and discussion concluded with committee agreement to continue monitoring and to enforce penalties as outlined.
