Massachusetts passed a Paid Family and Medical Leave law which requires Massachusetts employers to provide paid family and medical leave to their employees.   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 for baby bonding, military exigency, and for an employee’s own serious health condition beginning January 2021.  PFML benefits for a family member’s serious health condition begins July 1, 2021. 

On March 29, 2019, the Massachusetts Department of Family and Medical Leave (DFML) issued updated draft regulations for public comment.  The Department plans to issue final regulations prior to the July 1, 2019 implementation date.

The Department has also posted on its website an employer guide, a toolkit for employers, and the mandatory workplace poster. This new information can be found on DMFL’s website.

Contributions

Starting July 1, 2019, employers must begin making contributions to the Trust Fund at an initial contribution rate of 0.63% on the first $132,900 (indexed for 2019) of an individual’s annual earnings. The 0.63% contribution rate is split between a 0.52% medical leave contribution and a 0.11% family leave contribution.

Employers with 25 or more employees must remit the entire 0.63% contribution to the Trust Fund. Such employers may deduct 100% of the family leave contribution and 40% of the medical leave contribution from employees. The employer must pay the remaining 60% of the medical leave contribution.

Employers with 24 or fewer employees are not obligated to pay the 60% employer share of the medical leave contribution. Such employers need only remit to the Trust Fund the remaining 40% employee share of the medical leave contribution and 100% of the employee’s family leave contribution, all of which may be deducted from the wages of employees.

The Department offers employers two interactive tools. One tool is for calculating contributions and the other tool is for determining if the employer is responsible for the share of medical leave.

Workplace Poster

The law requires employers to notify employees of the law and its requirements. Employers must display the poster in a conspicuous place at its business by July 1, 2019. The poster must be displayed in English and each language which is the primary language of 5 or more individuals in the workforce.  The Department has created a workplace poster in English, Spanish and ten other languages for an employers’ use.

Beginning July 1, 2019, employers will also be required to notify their workforce about the State’s PFML program. Employers must provide W2 employees and 1099-MISC contractors written notice of contributions, benefits, and workforce protections. This notice must be issued to each new employee within 30 days of his/her first day of employment and in the employee’s primary language. Employers must obtain from each employee a written statement acknowledging receipt of the notice or a statement indicating the employee’s refusal to acknowledge the notice.

The notice must contain:

• An explanation of the availability of family and medical leave benefits;
• The employee’s contribution amount and obligations;
• The employer’s contribution amount and obligations;
• The employer’s name and mailing address;
• The employer identification number assigned by the Department;
• Instructions on how to file a claim for family and medical leave benefits; and
• The mailing address, email address, and telephone number of the Department.

Private plan exemption

Beginning April 29, 2019, an employer that provides a paid leave benefit through a private plan may apply to the Department for an exemption from the above referenced tax. The employer may apply for an exemption from medical leave, family leave, or both. Applications for exemptions will be accepted and reviewed by the Department on a rolling basis and will be effective for one year. The exemption may be renewed annually.

To be approved for an exemption, an employer’s private plan must confer all the same or better benefits as those required by law and may not cost employees more than they would be charged under the state plan administered by the Department. Additionally, the employer’s policies must provide equivalent or better rights and protections as those required by the law, including the job- and benefit-protection provision and the non-retaliation provision.

What should an employer do?

While these regulations are not final, yet.

• Employers should begin taking steps to prepare for the payroll changes that will take effect July 1, 2019;
• Employers should begin preparing to deliver the required notices and posting; and
• Employers intending to get their private plans certified should be prepared to submit documentation beginning April 29, 2019.

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.