On June 28, 2018, Governor Charlie Baker had signed into law the “Grand Bargain” bill that will include a statewide program that will provide paid leave for employees dealing with a serious medical condition, caring for a family member with a serious health condition, bonding with a child during the first 2 months after birth or placement after adoption/foster care, caring for a family member on active duty or ordered to active duty, or caring for a family member who is a covered servicemember with a serious injury or illness.
The new Massachusetts Paid Family Medical Leave (PFML) will begin having employers take out deductions from their employees for the paid leave. This state law will allow employees to take up to 12 weeks of paid parental leave and up to 20 weeks of paid medical leave; employees will be limited to only taking a maximum of 26 weeks per year for paid medical and family leave combined with the benefit amount being determined by an employee’s earnings and capped $850 per week.
Entitlements for the MA Paid Family and Medical Leave will not be available until 2021, however, contributions going toward the new law will begin to be taken out starting July 1, 2019. Employers will be responsible for submitting employee contributions through the Department of Revenue’s MassTaxConnect. The rate to be taken out for the PFML is 0.63 percent of an employee’s wages, with employers who have fewer than 25 employees not being required to contribute the employer portion of the MA PFML and the employee will be responsible for the total contribution to Medical leave (0.52 percent payroll deduction) and Family leave (0.11 percent payroll deduction) of the 0.63 percent total.
For employers with 25 or more employees, the total payroll deduction will still be 0.63 percent with 0.52 percent going to Medical leave, however, the employer will pay a 60 percent share of the 0.52 percent and the employee will pay 40 percent of the 0.52 percent. The family leave portion for employers with 25 or more employees will also be 0.11 percent of the total 0.63 percent payroll deduction, however, employees will be fully responsible for the contribution and the employer will not.
The PFML contribution will be limited to the Social Security wage base with the employee no longer having to pay into the 0.63 percent for anything over $132,900. Employees who are under the age of 18, who otherwise qualify will be also covered under the PFML; the law will also cover employees who are union-represented. Employees will be required to continue to pay their share of health insurance premiums. Employees will also not be required to work for a certain period of time for their employers in order to be eligible for the PFML, as long as they meet the law’s financial eligibility test.
Any employer or business that employs Massachusetts workers will be required to comply with the PFML law, which will include non-profit organizations, religious institutions, and colleges and universities employing students. If your business provides a private paid family and medical leave plan, you may be exempt from having to pay into the state program. The private plan you offer must be greater than or equal to the state plan and you can apply for an exemption from either the medical contribution, family contribution, or both through MassTaxConnect.
Due to problems arising with the Massachusetts Paid Family and Medical Leave, lawmakers in Massachusetts have decided to push back the start date for collecting contributions from July 1, 2019, for another three months to October 1, 2019. Please follow us on our social media channels to receive the latest tips, news, updates, and more for both Rhode Island and Massachusetts and other information that may affect your business.