MA Paid Family Medical Leave Update
The long-anticipated updated draft regulations for the Massachusetts Paid Family and Medical Leave (PFML) law were released the last week of March. Although this release was originally slated to include the final regulations, MA has stated that there will be one additional update prior to the regulation going live on July 1.
As part of the Massachusetts “Grand Bargain,” PFML will provide paid family and employee medical leave benefits to Massachusetts workers beginning 2021. In addition to establishing a Department of Family and Medical Leave, the law also provides a process for paid family leave of up to 12 weeks to care for a family member, and up to 20 weeks for an individual employee’s own ailment or disability.
Effective July 1, 2019, all Massachusetts employers are subject to paid family and medical leave requirements and must begin deducting premiums from their workers.
That premium is 0.63 percent of the maximum taxable earnings as established by the Social Security Administration (currently at $132,900). Prior to the July 1 start, the rate will be allocated between the family leave and the employee medical leave contribution. Employers will deduct the following amounts from their workers:
- Up to 40% of the total medical leave contribution required for an individual
- Up to 100% of the total family leave contribution required for an individual
Employers with fewer than 25 workers in Massachusetts must remit contributions to the department on behalf of their workers. However, they are not required to pay the employer share of the contribution for family and medical leave.
Employers with 25 or more workers in Massachusetts will be required to pay at least 60% of the premium for medical leave, while the balance of the medical leave and 100% of the family leave may be deducted from their workers. Both shares will be submitted by the employer.
Contributions will be paid quarterly, with the department calculating the amount of contribution based on the employer’s quarterly reports. The quarterly reports and contributions will be submitted through the Department of Revenue’s MassTaxConnect application.
Employers must notify their workforce about this program, including the benefits and protections that apply to them. The notification includes:
- Paid Family and Medical Leave mandatory workplace poster, which can be found here >
- Provide written notice of contributions, benefits, and workforce protections to W2 employees and 1099-MISC contractors.
- Collect signed acknowledgments of receipt of such notice from W2 employees and 1099-MISC contractors.
Employers can apply for an exemption from PFML if they have a “private plan.” The current release clarifies this process:
- Organizations already providing a paid leave benefit to their employees may be eligible to receive an exemption from collecting, remitting, and paying contributions for PFML.
- The Department of Family and Medical Leave has announced that exemption applications will be available through MassTaxConnect beginning April 29.
- In order to be eligible for, or receive, an exemption, the benefits offered to employees must be better or equal to the benefits provided by PFML.
- The department website identifies the minimum requirements with respect to plan design and cost for a private plan to be compliant, which can be found here >
- Employers applying for an exemption will receive an immediate approval or denial of exemption, and:
- If approved, employers must upload a copy of their private plan.
- If denied, it is anticipated that employers will be provided with the reason as well as an appeal process.
The Department of Family and Medical Leave has provided employers with helpful online tools:
The following is an updated timeline of PFML and what employers can expect:
CheckWriters will continue to monitor events as they unfold with respect to this new Massachusetts law. In particular:
- Our Benefits Team is working diligently with insurance carriers to provide private plan options. Please do not hesitate to contact us for additional information or for price proposals on plans that would replace Massachusetts PFML.
- Our Tax and Payroll teams are finalizing concrete plans to provide for a smooth transition in July.