Effective July 1, 2019, all private employers within the state of Massachusetts are required to collect contributions for paid family and medical leave. The Department of Family and Medical Leave has yet to release further details or final regulations. We are closely monitoring this law and will provide updates as they come.
Employers that employ one or more individuals are subject to the Paid Family and Medical Leave (PFML) law, must submit contributions on behalf of workers, and covered individuals.
Employers with fewer than 25 employees or covered individuals must submit contributions on behalf of their workers to cover the portion of PFML contribution due from employees and covered individuals. These businesses are not required to pay the employer portion of the contributions for family and medical leave.
Cities, towns, districts, and political subdivisions or their instrumentalities are exempt unless they opt in.
• A current employee of a Massachusetts employer;
• A self-employed individual who has elected coverage under the Act and reported self- employment earnings; and
• A former employee, assuming that the employee has not been separated from employment for more than 26 weeks at the start of the former employee’s family and medical leave
Approved Uses and Payment
• To provide care for a family member because of the family member’s serious health condition;
• To bond with their child during the first 12 months after the child’s birth, or during the first 12 months after placement of the child for adoption or foster care; or
• To attend to obligations arising because a family member is on active duty or has been notified of an impending call to active duty in the United States armed forces.
Payment is subject to a seven day waiting period during which no benefits are payable. Eligible employees may use other paid leave, such as sick leave or vacation, during this period. Intermittent leave may be available.
The Department of Family and Medical Leave, will administer the paid family and medical leave program. The program will be paid for by a mandatory 0.63% payroll tax contribution, or an adjusted amount set annually by the Department, and submitted to a state trust fund. Employers may require employees to pay a portion of those contributions, and employers with fewer than 25 employees are exempt from paying the employer share of the contributions.
The benefits of the program will replace a worker’s pay with a weekly benefit cap of $850 or a rate adjusted to equal 64% of the state average weekly wage (SAWW). Up to the first half of the SAWW (currently $669.03), the worker will be reimbursed at a rate of 80%. Then, the employee would be paid half of the difference between his or her weekly wage and the SAWW. Employees will be required to cover all of the family leave contribution and 40% of the medical leave contribution. Employers will cover at least 60% of the contribution to the medical leave trust fund.
Employers that issue 1099s for more than 50% of their workforce must remit contributions for their 1099 workers (“covered individuals”) as well as their employees.
The law requires the Department to craft proposed regulations by March 31, 2019.
The agency will notify applicants of their eligibility for benefits within 14 days of receiving a claim and shall pay the benefits not less than 14 days after the eligibility determination has been made. The agency will further notify the employer within 5 business days of a claim being filed. The Act also calls for the agency to establish an administrative appeals process that will adjudicate claims within 30 days of the notice of decision.
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This information is provided as a courtesy, may change and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney or Advisor.