This post was updated to reflect current PFML tax rates, notice dates, etc.
Massachusetts will soon offer Paid Family and Medical Leave benefits (PFML) to all employees. PFML leave is a new employee benefit, which is managed by the Department of Family and Medical Leave (DFML). The law impacts employers of any size. Beginning October 1, 2019, employers must collect payroll taxes to support PFML leave. The initial payroll tax will be 0.75%, but this rate is subject to change. Companies with 25+* workers must contribute a portion of payroll taxes for medical leave benefits (0.372% of wages). For smaller companies, there is no mandatory employer contribution. Employees also pay payroll taxes towards family leave (0.13%) and medical leave (0.248%). Employers can opt to contribute toward their employees’ share of the taxes, but this is atypical. Companies should consult legal counsel before paying a larger share of PFML taxes.
Beginning in January 2021, Massachusetts employees are eligible for up to 20 weeks of paid medical leave to care for oneself. Medical leave is only for “serious health conditions” that are incapacitating and prevent work. Employees may take up to 12 weeks of family leave due to a birth, adoption, foster placement, or exigencies due to a family member’s military service. Family leave of up to 26 weeks may be taken due to medical treatment for a family member serving in the military. In July 2021, family leave of up to 12 weeks can also be taken to care for a family member with a serious health condition. There is cap of 26 weeks of total family and medical leave in a benefit year. Benefits are calculated by a formula linked to the state’s average weekly wage, and maximum weekly benefits will be $850. Employees must provide notice to their employer (typically 30 days) before an anticipated leave. New employees become eligible for PFML leave once they qualify for unemployment benefits (after 8 weeks of service). PFML leave applications are submitted to DFML.
When employees take PFML leave, companies are required to keep their positions open and to maintain health insurance in most cases. The law strictly prohibits discrimination or retaliation for taking paid leave. Companies should ensure that their employee handbooks (and breakroom posters) describe PFML benefits and policies. By September 29, 2019, companies must distribute PFML notices to be signed by employees.
*NOTE: DFML recently determined that 1099 contractors must be counted toward the 25-worker threshold when more than half of a company’s workforce is contractors. In this case, companies must contribute taxes for both employee and contractors. Companies do not contribute to PFML for H-2A visa holders, but contributions are made for other temporary foreign workers.
Please contact us with any questions about PFML benefits and policies. Most companies can rely on their payroll service to collect taxes and to provide notices. However, companies should consult with legal counsel to formulate and implement PFML policies. Companies that discourage use of PFML leave or that discipline or terminate employees in connection with PFML leave could face litigation and damages.