This summer, Massachusetts joined the growing list of states requiring paid family and medical leave (see New Paid Family Leave Law in Massachusetts, Benefit Beat, 7/5/18).  Starting July 1, 2019, employers may begin payroll deductions to fund the paid family and medical leave (PFML) program. Employees are eligible for PFML benefits beginning January 2021.

The law called for the establishment of a new state agency to administer and enforce the provisions of the PFML program.  The newly established Massachusetts Department of Family and Medical Leave (DFML) recently launched its website, and issued two sets of FAQs - one set for employers, and one set for employees.

For the most part, these FAQs reiterate the provisions of the law; following are highlights of the guidance.

Highlights of Employer FAQs

• Affected Employers.  Employers employing one or more employees, including the Commonwealth, are subject to the paid family leave law, and are required to submit contributions on behalf of employees. Local governments do not have to comply with the law, but may opt in to participate in the PFML program.
• Funding of Contribution Rates. The family and medical leave contribution rate is 0.63% on the first $128,400 of an employee’s annual earnings. The apportionment between family and medical leave contribution rates will be determined each year, based on projected benefit costs for each benefit year. The employer must deduct the appropriate amount from the employee’s wages, and then remit these monies to DFML. The first year’s contribution breakdown will be determined in the coming months, and published sometime before July 1, 2019.

Contributions can be funded strictly by the employer, or shared between employer and employee as follows:

• An employer employing 25 or more employees is obligated to pay 60% of the total family and medical leave contribution amount. The employee can be required to pay the balance of the medical leave portion of the contribution amount, plus all of the family leave contribution amount.  
• An employer employing fewer than 25 employees is not obligated to pay any part of the medical or family leave contribution amounts; thus, the required medical and family leave contribution amount is funded solely by the individual.

While independent contractors can opt in to participate in the PFML program, if more than 50% of the employer’s workforce qualifies as independent contractors, the employer would submit contributions for the independent contractors as if they were employees.

• Coordination with Existing Leave Plans.  Employers with existing PFML programs that are more generous than the law requires can apply for an annual exemption from the law.

Highlights of Employee FAQs

• Eligible Employee. An individual who works for a business employing one or more employees in the Commonwealth, has accumulated 15 or more weeks of earnings, and earned at least $4,700 in the 12-month period prior to leave, is eligible for PFML benefits.

With regard to certain workforce populations:

• Self-employed individuals may opt in to participate in the PFML program.
• Individuals employed by local governments may be covered if the local government opts into the PFML program.
• Unemployed individuals may be covered if he/she has been unemployed up to 26 weeks, and had accumulated 15 weeks or more of earnings as an employee in the year prior to the year when he/she applies for benefits.

• Reasons for Leave

Up to 12 weeks of designated family leave can be taken for the following events:

• Baby bonding;
• To care for a family member’s serious health condition; or
• A qualifying exigency relating to a family member’s military service; or, to care for a family member who is a covered service member with a serious injury or illness incurred or aggravated in the line of duty.

An individual is entitled to up to 20 weeks of designated medical leave to attend to his/her own serious health condition, not to exceed a combined total of 26 weeks of family and medical leave in a benefit year.

• Benefit Amount.  The weekly benefit amount is calculated as a percentage of an individual’s earnings and will vary for each individual. The maximum benefit is $850 per week.

Future Rulemaking

By law, the DFML is required to issue implementation regulations by March 31, 2019.  Affected employers will want to monitor the DFML’s website for further developments.

The information contained in this article is provided as general guidance and may be affected by changes in law or regulation. This article is not intended to replace or substitute for accounting or other professional advice. Please consult a CBIZ professional. This information is provided as-is with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein.