The Massachusetts Paid Family and Medical Leave Act (PFML) will provide Massachusetts employees paid family and medical leave beginning January 1, 2021. Although the final regulations supporting the PFML are still being developed, employers should familiarize themselves with the PFML’s key provisions, including specific employer compliance obligations which will begin as early as July 1, 2019.
Under the guidance of the newly created Department of Family and Medical Leave within the Executive Office of Labor and Workforce Development (the Department), the PFML will provide nearly all Massachusetts employees with up to 12 weeks of paid family leave and up to 20 weeks of paid medical leave, with a maximum of 26 weeks of combined family and medical leave, in the aggregate, per benefit year. An exception to this involves family leave arising from a covered service member’s call to active duty, which extends the cap on leave to 26 weeks.
Reasons for Leave
Under the PFML, an employee is allowed paid medical leave to deal with his/her own serious health condition, and paid family leave for any of the following qualifying reasons:
- To care for a family member who has a serious health condition;
- To bond with a child during the first 12 months after the child’s birth, or the first 12 months after the placement of the child for adoption or foster care;
- To deal with any qualifying exigency arising out of the fact that a family member is on active duty or has been notified of an impending call or order to active duty in the Armed Forces; 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.
The PFML allows employees to take intermittent leave (leave taken in separate periods of time due to a single illness or injury rather than one continuous period of time) in all of the above situations except to bond with a new baby.
Unlike the federal FMLA, eligibility for paid leave under PFML is not tied to a minimum number of hours worked by the employee or a length of service. However, the PFML does require an employee to meet the earnings threshold relating to unemployment benefits.
Eligible individuals include (a) all employees of a business or a state or federal governmental agency in Massachusetts; (b) independent contractors who contract with a business that issues 1099s for more than 50% of its workforce, (c) self-employed individuals who opt-in to obtain coverage and report required earnings, and (d) employees of a city, a town, or other local governmental employer, only if the employer chooses to opt-in.
Former employees who have not been separated for more than 26 weeks from the time leave begins and meet the earnings threshold are also eligible for paid leave under the PFML.
Wage Replacement Benefits
After a 7-day waiting period (during which time workers can use any accrued paid sick time, vacation pay or other paid leave they may have), workers on paid leave may receive wage replacement benefits equal to 80% of their wages up to 50% of the state average weekly wage, and then 50% of their wages above that amount, up to an $850/week cap (which may be adjusted annually). This maximum weekly benefit amount may be adjusted annually by October 1 for the following calendar year. PFML benefits will be prorated for intermittent leave and will be reduced by wages or wage replacement under certain circumstances.
PFML leave may run concurrently with leave taken under the Massachusetts Parental Leave Act and the federal Family and Medical Leave Act (FMLA).
Continuation of Employee Benefits/No Retaliation
While on leave under PFML, an employee’s benefits will continue to accrue, including vacation time, sick time, length of service credits and other employment benefits. Likewise, employees will continue to receive health insurance benefits. When an employee returns from leave under PFML, their employer is required to reinstate them to their previous position or an equivalent position.
The PFML prohibits retaliation against employees who apply for benefits under the law, and provides employees with a right of action with a 3-year statute of limitations for violation of the restoration, benefits continuation and anti-retaliation provisions, including an award for triple damages and attorney’s fees if the action is successful.
Funding PFML Benefits through Payroll Deductions
Paid leave will be funded through a payroll tax on employers and employees paid to the state’s Family and Employment Security Trust Fund. Starting July 1, 2019, Massachusetts will begin collecting contributions at an initial rate of 0.63% on the first $128,400 of an eligible individual's annual earnings.
Depending on the type of leave and the size of the employer, the employee may be required to contribute to the cost of the Trust contribution. Employers with fewer than 25 employees will not be expected to pay any portion of this contribution, and may deduct up to 100% of the expected contribution from employee wages.
For employers with 25 or more employees, employers will be required to contribute to medical leave contributions, but not to those designated for family leave. For a visual breakdown of this requirement, the Department provides this chart.
Once the contribution rate is established as of July 1, 2019, it may be adjusted annually by October 1 for the following calendar year.
Employers will have the option to create a private plan that matches or exceeds the rights under the PFML, provided that an appropriate surety bond is paid to the state in a form approved by the Department and in an amount required by the Department. Denial of leave by the private plan is subject to appeal before the Department and then in district court. Other rules for exemption may apply.
Submitting a claim under PFML
Employees will be required to give employers at least 30 days’ notice of their intended leave under PFML, including the anticipated start date, length of leave, type of leave and expected return date.
Employees will also be required to file a benefits claim with the Department, on Department issued forms, within 90 calendar days after the start of leave; and the Department will notify the applicants of their eligibility within 14 days of receiving the claim. The Department also will notify employers within 5 business days that a claim has been received. Claims must include certification that the requested leave meets a covered reason under the PFML.
Employer Notice Obligations
Starting July 1, 2019, employers must (1) post a notice of benefits available under the PFML in a conspicuous place at each of their premises in English and any other language which is the primary language of 5 or more employees or self-employed individuals of that workplace (if such notice is available from the Department), and (2) provide written information about these benefits in the employee’s primary language within 30 days after each employee’s start date and at the time it makes a contract with a self-employed individual.
Both the notice and written information must be provided or approved by the Department. Failure to comply with these requirements may result in a penalty of $50 for each employee or self-employed individual with whom it contracts for a first offense and $300 for each subsequent violation.
Checklist: What Employers Need to Do Now
As previously mentioned, although the right to paid leave does not begin until 2021, there are certain steps that employers must take by July 1, 2019 as mandated by the PFML. To that end, employers are advised to take the following preparatory steps:
• Begin Contributions To Paid Family Leave Coverage
Employers must begin contributing to the Family and Employment Security Trust Fund at a rate of 0.63 percent.
• Post a Workforce Notice
Post a notice of benefits available under the PFML in a conspicuous place at all locations; and provide employees and self-employed individuals with whom it contracts with all required written notices in accordance with the law.
• Update your Policies
→ Employers should update their handbook or written leave of absence policies to provide employees with written guidance on PFML, including, but not limited to, their rights and obligations under PFML, and information on how to request leave.
→ Updated policies should also address how the PFML will interact with existing leave laws, such as the Family Medical Leave Act (FMLA), the Americans with Disabilities Act (ADA), the Uniformed Services Employment and Reemployment Rights Act (USERRA), and the Massachusetts Parent Leave Law.
→ Employers should update their forms to ensure that they properly notify employees going on leave of the concurrent designation of PFML and other leave.
→ In the absence of an employee handbook or other written policies, employers should prepare written guidance for employees concerning their rights under the PFML.
→ Update internal payroll process to prepare for the calculation and collection of the appropriate employee payroll withholdings, which initially will be 0.63% of each employee’s wages.
→ Notify your employees that payroll deductions for PFML benefits will begin on July 1, 2019.
→ As noted above, within 30 days of an employee’s hire, issue to the employee written information provided/approved by the Department in the employee’s primary language, explaining available benefits, the employee’s contribution amount and obligations, and instructions on how to file a claim
→ Put in place internal procedures for ensuring that any PFML-related forms are properly completed.
→ Ensure Human Resources personnel are appropriately informed on how to comply with the new law.
Determine what impact, if any, the PFML may have on contractual obligations, including collective bargaining agreements, and consider whether you must address the PFML in future contract negotiations.
The PFML is amongst the nation’s most generous paid leave programs. The above is a summary of what we know of the PFML to date, although some aspects of the law are still under consideration. PLEASE NOTE: The Department is expected to issue proposed regulations and procedures by March 31, 2019, and final regulations are expected by July 2, 2019. For specific questions about the PFML and how it will impact your business, please feel free to contact Gina Wodarski at email@example.com or Jackie Piscitello @ firstname.lastname@example.org.
¹ In addition to the family members included under the federal FMLA, Massachusetts’ law will include an employee’s domestic partner, grandchildren, grandparents, siblings, and the parents of a spouse or domestic partner.
² This waiting period may not apply to medical leave during pregnancy or recovery from pregnancy if approved and supported by medical documentation that is immediately followed by leave.
³ A breakdown of how the .63% contribution will be allocated between medical and family leave will be provided in the final regulations due by July 1, 2019.