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Paid Family and Medical Leave in Massachusetts – Compliance Deadlines

Beginning in 2021, paid family and medical leave will be available to covered workers in Massachusetts through the Paid Family and Medical Leave Act (PFML) and will provide an employee with up to 26 weeks of paid leave in a benefit year. While covered workers will not be able to collect benefits until January 1, 2021, employers’ obligations start as early as September 30, 2019.

If you employ Massachusetts workers, you’ll be required to comply with the law, with certain limited exceptions for religious institutions, and students employed by colleges and universities.  It also applies to employers that issue 1099-MISC tax forms for more than 50% of their workforce.

The law was originally scheduled to go into effect July 1, 2019, but that date was delayed. Here is an updated timeline of what employers need to know:

• September 30, 2019 – Deadline for Written Notice of Benefits Required

On or before September 30, 2019, employers must provide written notice to their employees of PFML benefits, contribution rates, and other provisions.

If you provided written notices to your workforce prior to the June 14th delay, you will need to provide them with a rate update sheet explaining new dates and contribution rates. 

View the notice template for 25 or fewer employees.

For 25 or more employees a notice template is here. 

• October 1, 2019 – Payroll Deductions Begin

Payments will be administered through a state-administered Family and Employment Security Trust Fund, with financing provided through a 0.75% payroll tax on covered individuals’ earnings. This is an increase from the previously announced payroll tax of 0.63%. Beginning on October 1st, employers must begin to make payroll deductions.

Employers with 25 or more employees must contribute at least 60% of the medical leave contribution. Employers with fewer than 25 employees must submit contributions on behalf of their workers but are not required to pay the employer share.

• December 20, 2019 – Deadline to File for a Private Plan Exemption

Employers who provide a private paid leave benefit that is greater than or equal to the benefits provided by PFML can apply for exemption from medical leave contribution, family leave contribution or both. The plan must not cost your covered individuals any more than they would be required to contribute to the state plan.

Notice of approval or denial will be sent within 1-2 business days. Exemptions are valid for one year. If the exemption is approved, self-insured plans will also need to provide a surety bond running to the Commonwealth of Massachusetts.

All requests for exemptions must be filed through MassTaxConnect by December 20th. More information on what is needed to file for an exemption can be found here.

• January 31, 2020 – Payroll Contributions Due

Employer collected payroll contributions will need to be submitted quarterly by filling with MassTaxConnect. October –December 2019 contributions need to be submitted by January 31st.

Conclusion

Employers not seeking an exemption (or for whom an exemption is not granted) should look at their current leave policies and how much of these benefits will now be covered by PFML and update their policies to reflect this new component of coverage.

For more information, please see the Massachusetts Department of Family and Medical Leave website or contact your Sherin and Lodgen attorney.