The Massachusetts Paid Family and Medical Leave (PFML) law goes into effect on July 1, 2019, and creates a public insurance program to provide Massachusetts workers with paid leave in order to welcome and care for a new child; take time off for their own serious illness or injury; take care of an ill family member; or in connection with certain military circumstances. The leave will be funded through payroll deductions from covered Massachusetts workers and employers.
Although Massachusetts workers will not be eligible to take paid leave through this program until 2021, employers of Massachusetts workers (or those who provide “service localized in the Commonwealth”) will be required to provide notice of the benefits to covered workers in advance of the effective date, to begin making PFML contributions as of July 1, 2019, and to file their first mandatory quarterly reports in October 2019.
Notice Requirements
By June 30, 2019, employers must provide written notice to their current work force of PFML benefits, contribution rates, and other provisions. The department has posted form notices for employees and independent contractors, which are available for download here. Employers may also create their own notices as long as they meet the minimum requirements set out by the Department.
The notice can be provided electronically or in paper form and must give covered workers the option of acknowledging receipt or declining to acknowledge receipt of the information. Employers must collect and maintain these acknowledgements. New employees receive the written acknowledgment within 30 days of hire.
Before July 1, 2019, employers must also display the Massachusetts Paid Family and Medical Leave poster at each Massachusetts work location.
Employers that fail to provide the required notice can face a fine of $50 per individual for a first violation, and $300 per individual for a subsequent violation.
Tips for Employers:
- Prepare your notices ASAP. Confer with legal counsel as necessary to review notices if you choose not to use the Department’s forms.
- Create a system for receiving and tracking notice acknowledgment forms.
- Post the required PFML poster in every Massachusetts work location.
- Provide the poster electronically to employees who do not have a specified work location.
Payroll Deductions
Employers with Massachusetts covered workers will be required to start making contributions to the state paid leave fund on July 1, 2019. The contribution rate for 2019 is set at 0.63% of each covered worker’s wages on the first $132,900 of annual gross earnings. The contribution rate may be changed annually and will be determined by October 1 for the following calendar year.
The 0.63% payroll tax rate will be split between the two leave programs, with 0.52% going to medical leave and 0.11% to family leave. Employers can deduct the entire 0.11% family leave contribution and up to 40% of the 0.52% medical leave contribution from wages paid to covered workers. Employers with fewer than 25 covered workers in Massachusetts do not have to pay any employer share of the medical leave contribution, but larger employers will be required to pay the remaining 60% of the medical leave contribution rate.
Employers are responsible for remitting the full 0.63% contribution to the state paid leave fund. Contributions for July 1, 2019 through September 30, 2019 must be paid through the MassTaxConnect portal by October 31, 2019. Failure to make the required contributions will result in a penalty of 0.63 percent of an employer’s total annual payroll for each year of compliance failure (or fraction thereof), in addition to the total amount of the benefits paid to covered individuals for whom no contributions were made.
Tips for Employers:
- Work with your payroll department or provider to make sure you have set up payroll deductions to begin July 1, 2019.
- If you have not already done so, register with MassTaxConnect so you can make payments for the first quarter contributions (for July 1, 2019 through September 30, 2019) by no later than October 31, 2019.
First Mandatory Quarterly Report
Employers are required to submit the first mandatory quarterly report through the MassTaxConnect portal in October 2019. The Department will announce specific reporting and documentation guidelines by July 1, 2019, but employers should expect quarterly reports to include the following information: the name, Social Security number, and wages paid or other earnings for each covered employee.
The Department will use the quarterly report to determine the total quarterly contribution owed, which must be paid through MassTaxConnect within 30 days after the end of the quarter.
Exemption for Private Plans
If you already provide employees with a paid leave benefit, you can apply for an annual exemption through the MassTaxConnect portal beginning April 29, 2019, and no later than September 20, 2019. A private benefit plan, whether self-funded or through a third-party insurer, must be at least as generous as the benefits provided by the PFML law and cannot be more expensive for an employee than the contributions allowed under the PFML. Applications for exemptions will be reviewed and acceptances conveyed on a rolling basis, will be effective for one year, and may be renewed annually. In addition, those with self-funded plans will be required to post a surety bond.
As a reminder, when PFML benefits become available, covered workers will be eligible for the following annual benefits:
- Up to 20 weeks of paid medical leave related to a worker’s own serious health condition that prevents him or her from working;
- Up to 12 weeks of paid family leave related to the birth, adoption, or foster care placement of a child;
- Up to 12 weeks of paid family leave to care for a family member with a serious health condition;
- Up to 12 weeks of paid leave related to a qualifying exigency due to a family member being on or being called to active duty in the armed forces; and/or
- Up to 26 weeks of paid family leave to care for a family member who is a covered service member with a serious health condition.
Total annual benefits for all qualifying reasons will be capped at 26 weeks per year. All types of paid leave benefits will be available to covered workers on January 21, 2021, except leave related to care for a family member with a serious health condition, which will be available on July 1, 2021.
