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Massachusetts Paid Family and Medical Leave Program

by Symmetry Tax Updates | Aug 22, 2019

Payroll deductions for the Massachusetts Paid Family and Medical Leave program (PFML) were initially required to begin on July 1, 2019. However, the Massachusetts Legislature and the Baker-Polio Administration signed a bill delaying the start of contributions. Payroll tax contributions from the employer, employees and the self-employed will begin on October 1, 2019, and the program will start in January 2021.

The delay of this plan will allow for everyone to better prepare. Massachusetts Legislative Leaders have more time to make any necessary changes to the program. To compensate for the shorter amount of time to collect contributions, the Department will be adjusting the contribution rate so that full funding may be reached before January 2021. The old contribution rate is 0.63% and will be modified to 0.75%. 

When the Massachusetts PFML program begins, it will provide eligible workers with a maximum of 12 weeks of paid family leave and a maximum of 20 weeks of paid medical leave. All of the family leave contribution can be deducted from the employee's paycheck while only a maximum of 40% can be deducted for medical leave. The employer will contribute to the remaining percentage of medical leave contributions. If a business has more than 25 employees, the employer is required to contribute 0.75% of eligible payroll to the Department of Family and Medical Leave. Contributions can come from employee payroll deductions or employer contributions. The contributions will support both paid family leave and paid medical leave. If a business has less than 25 employees, the employer is not responsible for paying the employer contribution.

Employers now have more time to review the duties and requirements of this plan. For the final quarter of the year, they must remit the necessary employee and employer contributions through MassTaxConnect by the end of January 2020. Employers have the option to apply for an exemption at any time before December 20, 2019, if they feel that their paid leave benefits are equal to or greater than the Massachusetts PFML program’s benefits. Once an exemption is approved, contributions can cease in the next quarter. If an exemption request is denied, then you can request a review at MassTaxConnect after October 1, 2019.

Employers will also need to notify all covered individuals before September 30, 2019. Employers should communicate all rights and obligations under PFML to their employees, and they should view the final regulations on the mass.gov/pfml page. Regulations are listed under the title "458 CMR 2.00 DEPARTMENT OF FAMILY AND MEDICAL LEAVE".

Massachusetts, as well as a few other states, is implementing the PFML without an existing temporary disability insurance infrastructure already established. Implementing and finalizing the program is a big task for any state. Go to mass.gov/pfml to stay informed on how your company could be affected.