What You Need to Know
In June of 2018, Massachusetts passed a paid family and medical leave policy, making it the fifth state to do so after California, New Jersey, Rhode Island, New York, and Washington, and almost in tandem with D.C. Since then, Massachusetts employers, employees and industry professionals like ourselves have been closely following the regulatory progress and stipulations of this new program.
The Law: A Brief Overview
The Massachusetts Paid Family and Medical Leave law provides employees working for a Massachusetts employer with up to 26 weeks of job protected, paid family and medical leave for qualifying reasons, which include but are not limited to:
- One’s own or a family member’s serious health condition
- Bonding with a newborn or adopted child
- Tending to a family member who is an injured servicemember
The law also offers job protection during and after a leave. The nuances of the policy and modifications have been slowly rolled out over the last year. More details about employee eligibility, employer requirements and readiness, and pay allocation can be found here. As with all state-wide legal overhauls, the policy is quite complex.
The program is meant to be funded through employer and employee contributions, with employers using MassTaxConnect to determine contributions and appropriate tax filing.
The Paid Family and Medical Leave benefits were set to be available to employees starting January 1st, 2021 for bonding, military exigency and one’s own serious health condition, with a second wave being rolled out on July 1st, 2021 for other available and applicable benefits. To ensure sufficient funding for the program, employers were to start paying paid leave taxes starting July 1st, 2019.
As the deadline approached, however, employers in the state became concerned over unanswered questions and lack of time to prepare. Members of the Associated Industries of Massachusetts sent more than 2,500 messages to Governor Charlie Baker explaining that they lacked the time and clarity to stay on track for the July 1st deadline. Massachusetts lawmakers heard the grievances and acted accordingly. On June 11th, 2019, the state agreed to a three-month delay on paid leave tax collection, which will now begin on October 1st, 2019.
What This Means For Employers
The extension allows us all to get more familiarized with the ins and outs of the law and plan accordingly. Employers will be focused on whether an exemption applies, how the breakdown of corporate tax vs. payroll deduction will work, and what portion(s) of their workforce are eligible for the different benefits outlined. The additional time will also enable employers to effectively communicate the changes. Updated key dates to be aware of include:
- Required Withholding Now Starts October 1, 2019
- Contribution Rate Has Been Adjusted from 0.63% to 0.75% of Employee Qualifying Earnings
- Remittance of Contributions for the October 1 to December 31 Quarter Will Be Due January 31, 2020
- Timeline Has Been Extended for Required Employee Notices to September 30, 2019
- Timeline Has Been Extended for Exemption Applications to December 20, 2019
- PFML Final Regulations Are Scheduled To Be Posted on June 17, 2019 and Become Effective on July 1, 2019
Please get in touch if you have questions about the Massachusetts Paid Family and Medical Leave law and how to prepare for the program’s rollout. We have experts in leave management and compliance that are happy to help you navigate this new policy.