In 2018, the Massachusetts Legislature enacted the Massachusetts Family and Medical Leave Law (“PFML”) (G.L. c. 175M). PFML will soon impose significant responsibilities on certain employers across the Commonwealth to ensure that employees receive paid family and medical leave.
PFML creates a statewide program that provides eligible employees with up to 12 weeks of paid family leave and up to 20 weeks of paid medical leave, with a maximum of 26 total weeks of paid family and medical leave in a single benefit year. An employee’s weekly benefit amount will be based on the employee’s earnings, with a maximum benefit of $850 per week. The state will fund the program through a payroll tax of 00.63% that is split between employers and employees, depending on the size of the employer and the type of leave that is taken. Of the 0.63% total contribution amount 17.5% will go to the family leave contribution and 82.5% will go to the medical leave contribution.
What Type of Businesses does PFML Apply to?
All businesses with more than one employee must comply with PFML, however there are different requirements depending on the number of employees a business has. Self-employed individuals are not required to comply with PFML, but they may opt in. Independent contractors who contract with businesses that issues 1099s for more than 50% of their workforce are treated as “covered individuals” under the PFML, and must remit contributions for their 1099 workers. Businesses with fewer than 25 employees must still remit contributions to the Department of Family and Medical Leave (“Department”) on behalf of their employees, but are not required to pay the employer share of the contribution for family and medical leave.
PFML creates a statewide program that provides eligible employees with up to 12 weeks of paid family leave...
How is the Contribution Rate Allocated?
The contribution rate of 0.63% is on the first $128,400 of an employee’s individual earnings. The apportionment between the family and medical leave contribution rates will be determined based on projected cost benefits for each benefit year. The first year’s allocation of the 0.63% breaks down with 0.52% of the payroll deductions being allocated towards medical leave and the remaining 0.11% going towards family leave contributions. Up to 100% of the family leave contributions can be deducted from employee wages. Regarding medical leave contributions, employers with more than 25 employees will be required to cover 60% of the employer’s share of medical leave, whereas employers with less than 25 employees will not.
Reporting Duties of Employers
Beginning on July 1, 2019 employers (and self-employed individuals opting in) on each calendar quarter must file an earnings report and remit contributions through the Department of Revenue’s MassTax Connect System. The report must include the name, social security number, wages, or any other earnings of all employees and independent contractors. The federal employer identification number of the employer and the identification number that any employer or self-employed individual is required to include on a withholding tax return filed with the state must also be included in the report.
Protections Given to Employees
PFML grants employees certain legal protections once they go on family or medical leave. First, an employee who has taken family or medical leave under the law must be restored to the employee’s previous position or to an equivalent position, with the same status, pay, employment benefits, length-of-service credit, and seniority as of the date of leave. Next, the employer must continue to provide for and contribute to the employee’s employment-related health insurance benefits at the level and under the conditions coverage would have been provided if the employee had worked continuously for the duration of the leave. Finally, it is unlawful for any employer to discriminate or retaliate against an employee for exercising any right to which such employee is entitled under PFML.
Exemptions from PFML
An employer that offers paid leave with benefits that are at least as generous as those provided under the law may apply for an exemption from paying the PFML’s contribution. An employer must provide the details of any private plan to employees at the same time as this notice.
Important Dates for Affected Employers and Employees
May 31, 2019:
Notice to employees deadline. The Massachusetts Department of Family and Medical Leave has released template notices employers may use to fulfill the notice requirement to employees under the PFML. To see the sample template notices, click on this link: https://www.mass.gov/lists/paid-family-and-medical-leave-downloads-for-massachusetts-employers. Employers should be sure to receive acknowledgments of receipt of the notice to their employees, and should place the acknowledgments in the employees’ personnel file.
Beginning July 1st, 2019:
a. Employers will be subject to the PFML’s posting, noting, reporting, and contribution requirements:
i. Self-employed individuals may opt-in and begin paying contributions.
ii. Employers must conspicuously post in its workplace a notice regarding the law that was prepared or approved by the Department.
iii. Employers must also provide new employees written information regarding the law that was prepared or approved by the Department within 30 days of their hire.
Beginning January 1st, 2021:
Most benefits become available to employees:
i. Employees may be entitled to up to 12 weeks of paid family leave in a benefit year for the birth, adoption, or foster care placement of a child, or because of a qualifying exigency arising out of the fact that a family member is on active duty or has been notified of an impending call to active duty in the armed forces.
ii. Employees may be entitled to up to 20 weeks of paid medical leave in a benefit year if they have a serious health condition that incapacitates them from work.
iii. Employees may be entitled to up to 26 weeks of paid family leave in a benefit year to care for a family member who is a covered service member undergoing medical treatment or otherwise addressing consequences of a serious health condition relating to the family member’s military service.
Beginning July 1st, 2021:
All benefits become available:
i. Employees may be entitled to up to 12 weeks of paid family leave in a benefit year to care for a family member with a serious health condition.
ii. Employees may be eligible for up to 26 weeks, in the aggregate, of paid family and medical leave in a single benefit year.
iii. An employee’s weekly benefit amount will be based on the employee’s earning with a maximum benefit of $850 per week.