Massachusetts Issues Proposed Regulations and Toolkit for Paid Family and Medical Leave Act

On March 29, 2019, the Massachusetts Department of Family and Medical Leave (“DFML”) re-issued draft regulations on the Massachusetts Paid Family and Medical Leave Act (“PFML”). DFML will hold at least two public hearings, beginning in May. There will also be a period for written comments. Final regulations should be published before July 1, 2019.

PFML will require Massachusetts employers to provide a maximum of 12 weeks of paid family leave and 20 weeks of paid medical leave for the employee’s own health condition to eligible employees effective as of January 1, 2021. Total family and medical leave will be capped at 26 weeks per year, and will run concurrently with the federal Family and Medical Leave Act (“FMLA”) leave.

The family and medical leave programs will be financed through employer and employee contributions remitted to the Family and Employment Security Trust Fund. The program will be funded by premiums paid by employees, employers, and the self-employed. The proposed regulations state that the medical leave contribution is 0.52% of payroll. The employee share of the medical leave contribution cannot exceed 40% of the cost. The family leave contribution is 0.11% of payroll, all of which can be deducted from the employee’s salary. Small businesses of fewer than 25 employees will not be required to pay the employer share of the contribution.

NOTE: If the employer pays a greater share of the contribution than required, the full contribution must still be remitted to the Department of Revenue through MassTax Connect.

Beginning on July 1, 2019, each employer is responsible for:

 

  • Making deductions to cover worker contributions from wages or other payments for services (e.g., for 1099-MISC contractors).
  • Reporting wages paid, payments for contract services rendered, and other information about its workforce.
  • Determining contribution amounts for its workforce and for any employer contributions. The first contribution will be due no later than October 31, 2019 for the period from July 1 through September 30, 2019.
  • Providing notification of PFML to employees through a required poster. The poster can be found by clicking here.
  • Providing individual written notices of contributions, benefits, and workforce protections to W-2 employees and 1099-MISC contractors and collecting signed acknowledgments of receipt of such notice. 

Employers will be automatically enrolled in the state plan unless they apply to DFML for an exemption to provide their paid family and/or medical leave through a private plan. Employers can apply for an exemption from either the medical leave contribution, the family leave contribution, or both beginning on April 29, 2019. Exemption requests must be filed annually.

To qualify for an exemption from family leave contributions, a private plan must meet the following requirements:

  • All employees (e.g., full-time, part-time, permanent, or seasonal) must be eligible for family leave benefits.
  • During the plan year, the plan must provide:
    • A weekly paid benefit amount that is greater than or equal to the benefit provided by PFML.
    • A minimum of 26 weeks of paid leave to provide care to a family member with a serious health condition suffered while on active duty in the armed forces.
    • A minimum of 12 weeks of paid leave if the employee’s spouse, child, or parent is a current member of the Armed Forces (including the National Guard and reserves) and is on covered active duty or notified of an impending call or order to covered active duty.
    • A minimum of 12 weeks of paid leave to provide care to a family member, as defined by PFML, with a serious health condition.
    • A minimum of 12 weeks of paid leave to bond with a child during the first 12 months after a child’s birth, or the first 12 months after adoption or foster placement of a child under the age of 18.
  • The employer must provide job protection while the employee is on qualified leave.
  • The employer must continue to pay its share of the health premium for employees on leave, as if the employees were actively at work.
  • Employees must be allowed to take family leave intermittently or on a reduced leave schedule, with the weekly benefit amount being prorated.
  • The plan must clearly state that all presumptions shall be made in favor of the availability of leave and the payment of leave benefits.

To qualify for an exemption from medical leave contributions, a private plan must meet the following requirements:

  • All employees (full-time, part-time, permanent, or seasonal) must be eligible for medical leave benefits.
  • The plan must pay a minimum of 20 weeks of paid medical leave in a year if an employee is unable to work due to a serious health condition.
  • The plan must pay a weekly benefit that is greater than or equal to the benefit provided under PFML.
  • The employer must provide job protection while the employee is on qualified leave.
  • The employer must continue to pay its share of the health premium for employees on leave, as if the employees were actively at work.
  • Employees must be allowed to take leave intermittently or on a reduced leave schedule, with the weekly benefit amount being prorated.
  • The plan must clearly state that all presumptions shall be made in favor of the availability of leave and the payment of leave benefits.

RECOMMENDATION: Employers who want to file for an exemption should review their private plans to determine if they meet the requirements described above, and if desired, make any necessary adjustments to the plans. Private plans should be carefully documented. Employers who are not approved for an exemption will need to start taking deductions from employees’ wages for their share of the family and or medical leave contributions beginning on July 1, 2019.

In addition to the required poster, the PFML toolkit (available by clicking here) includes:

  1. An employer/employee contribution calculator.
  2. A registration link to MassTax Connect if the employer will utilize the state contribution program option and do not have an active account with MassTax Connect.
  3. A private plan (self funded or fully insured) exemptions link. Employers that plan to request an exemption from contributing to family leave, medical leave, or both, will need to submit an approved plan application. The application will be available through MassTax Connect beginning April 29, 2019.

RECOMMENDATION: Employers should consider providing notice to employees before July 1, 2019 so that they will understand and be prepared for the additional deductions in their paychecks. In some cases, employees may want to change their withholdings prior to July 1.

RECOMMENDATION: Employers should also review their systems to ensure that they capture the information required to be submitted to MassTax Connect at the end of each quarter.