CT Paid Leave: An Option for the Self-Employed

Connecticut’s paid family and medical leave program, or CT Paid Leave, as it’s more commonly known, provides income replacement benefits for workers when they need time off to seek treatment for their own serious health condition, care for a family member, welcome a new child, or for other qualifying reasons, including domestic violence leave and military family leave

By Jessica Vargas

But what about the self-employed population? As any self-employed individual or sole proprietor knows, if you don’t work, you don’t get paid. Luckily, CT Paid Leave can help.

While most employers with one or more people working in Connecticut are automatically covered by CT Paid Leave and their employees must contribute to the program through a small payroll deduction of one half of one percent, self-employed individuals and sole proprietors are not required by the law to participate or contribute. However, these individuals may opt in and become covered under CT Paid Leave if they choose to do so.

There are a few things for a self-employed individual to consider before deciding whether to participate. First, and foremost, for a sole proprietor or self-employed person to opt in to CT Paid Leave, they must be a resident of Connecticut and their business must be based in Connecticut. If their business is based in Connecticut but they reside in New York, for example, they are not eligible to participate.

The second thing to know is that the self-employed contribute to the program at the same rate as all other employees – one-half of one percent (0.5 percent). Their contributions are based on their self-employment earnings as identified by the Internal Revenue Service.  If a person receives a 1099 or a K-1, they may be the sole proprietor. However, if they receive a W2 from their organization, they are an employee of that organization (even if they are an owner or officer of the company).

If a sole proprietor or self-employed individual chooses to opt-in to CT Paid Leave, they must remain in the program for a minimum of three years. After the three years, they would be automatically re-enrolled in one-year increments unless they choose to withdraw. Once they opt in and begin making contributions, they would be able to apply for CT Paid Leave benefits after three full calendar months. For example, someone who registered in June could apply for benefits on or after October 1.

A sole proprietor or self-employed individual may not be able to completely step away from their work if they’re facing a serious health condition, need to care for a family member, or are bonding with a new child, and CT Paid Leave understands this. That’s why self-employed people can apply for partial benefits if they’ll still be performing some work during their leave.

CT Paid Leave gives sole proprietors and self-employed individuals peace of mind that if something happens, they will still be able to receive some income while dealing with their own or their family’s serious health concerns. For more information about how CT Paid Leave works for sole proprietors and self-employed individuals, visit ctpaidleave.org.

This article was written by Jessica Vargas, CT Paid Leave Authority’s Chief Marketing and Communications Officer.