As part of the "Grand Bargain" legislation passed last summer, Massachusetts has a new Paid Family and Medical Leave Act ("PFMLA"). The PFMLA establishes a statewide Department of Family and Medical Leave and the Family and Employment Security Trust Fund ("Trust Fund"). Here are five considerations you should be making ahead of date and rate changes.
1. Be Aware of Deadlines
Sept. 30, 2019: Notify all covered individuals about the PFMLA, benefits and withholding. Document that you provided this notification and post the PFMLA poster in a conspicuous location.
Oct. 1, 2019: Begin withholding.
Jan 31, 2020: complete quarterly filings and submit contributions, including withholdings and employer contributions, if required.
2. Review Existing Policies
Take a look at your existing policies on leaves to make sure that your policies are internally consistent and compliant with the new law. An employer must continue to pay their share of an employee's health insurance while they are out on leave, but an employee is not required to continue accumulating vacation time or seniority while out on leave.
3. Calculate Your Average Workforce
Add up your 2018 W-2 employees for each pay period and divide by the number of pay periods. Then do the same for any 1099-MISC contractors. If you had fewer or the same number of 1099-MISC contractors as you did employees, only your W-2 employees are covered individuals. If you had more 1099-MISC contractors than W-2 employees, your 1099-MISC contractors are also covered individuals.
4. Determine whether you are required to pay employer contributions.
Count your covered individuals. If you have 25 or more covered individuals, you are required to pay at least 60% of the medical leave contribution. You can estimate the required contributions at https://calculator.digital.mass.gov/pfml/contribution/?w2=25.
5. Consider Applying for an Exemption
If you are interested in self-insuring, or providing a private plan for the benefit of your employees, you may be eligible for an exemption from the PFMLA, however the provisions of this plan must be at least equal to the PFMLA provisions. Exemption applications must be submitted and approved by December 20, 2019 in order to avoid withholding for the first quarter. Exemption applications that are approved after that date will go into effect at the next quarter. To date, the state has received approximately 100 exemption applications, of which approximately 30 have been approved. Exemptions must be re-approved annually and the application information is available through mass.gov/pfml.
Associate, Janelle A. Tanenbaum
SederLaw 339 Main Street, Suite 300
Burnside BuildingWorcester, MA 01608
Ms. Tanenbaum is an Associate Attorney at Seder & Chandler practicing in the Banking & Finance, Family Law & Probate and Litigation areas. Ms. Tanenbaum's practice focuses on commercial, matrimonial and family disputes involving division of assets, business, trust and tax issues, joint ventures; and other corporate transactions arising out of the day-to-day operations of closey-held businesses, employment policies, procedures and legal compliance, and corporate governance. Ms. Tanenbaum also works on the estate litigation and administration.