This Client Alert updates our May 2019 communication regarding the requirements of the Massachusetts Paid Family & Medical Leave law (“PFML”). Information on the newly published regulations and notice forms is set forth below. The deadlines in the prior alert are no longer in effect.
The new law will provide eligible employee with up to 20 weeks of paid medical leave and up to 12 weeks of paid family leave per year beginning in 2021. Employers of 25 or more employees in Massachusetts are required to provide contributions to fund this employee benefit.
ACTION STEPS TIME LINE
September 30, 2019 - Provide Notice To Employees (Click here for Model notice)
October 1, 2019 - Begin Deductions from Wages and Post Notice (Click here for Model notice)
January 31, 2020 - Submit Reports and Deductions to MassTaxConnect
January 1, 2021 - Employees May Receive Payments for Covered Absences
1. Guide for Employers. The Massachusetts Department of Family & Medical Leave (“DFML”) is responsible for implementing the law. The DFML has published an online Guide on the actions employers must take. The Guide can be found here.
2. Registration & Reporting. Employers must register and file quarterly employment and wage detail reports with Department of Revenue’s MassTaxConnect system. First quarterly reports will be due via MassTaxConnect in January 2020.
3. Approval of Private Plans. Employers providing paid family and medical leave plans to their workforces with benefits greater than or equal to those provided by the PFML can seek exemption from the required contributions. Applications for exemptions should be filed with MassTaxConnect as soon as possible.
4. Deductions from Wages for Contributions. Starting on October 1, 2019, employers should begin making deductions from wages to fund the quarterly contributions. Contributions will be submitted through MassTaxConnect.
5. Assessment of Contributions & Covered Individuals. Employers must report total workforce numbers but will only need to submit contributions for employees who are W-2 employees AND 1099-Misc contractors if those contractors make up more than 50 percent of the employer’s total workforce. Each quarter, the employer must submit contributions for all covered individuals. Only employers of less than 25 covered individuals are not responsible for contributing a share of the costs.
The DFML guide provides an online calculator for a breakdown of contribution rate splits for employers with 25 or more employees. While total contributions will initially be .75% of maximum taxable earnings established by the Social Security Administration (currently $132,900) for each covered individual, this contribution will be divided into a .62 % payroll contribution attributable to individual employee medical leave and an .13% payroll contribution attributable to family leave. Up to 100% of the family leave contribution may be deducted from employee wages, and up to 40% of the medical leave contribution may be deducted from employee wages, with the employer responsible for the remaining 60%.
Employers with fewer than 25 covered individuals must deduct and remit contributions (paid entirely by employees) to the DFML but are not responsible for paying the employer share of the contributions.
6. Notices to Employees and 1099-Misc Independent Contractors. DFML template notices may be used to fulfill the notice requirement to employees and 1099-Misc independent contractors under the law. The notice covers the benefits, contribution rates, and entitlements under the new law. Employers must provide the notice to employees by September 30, 2019, and are also required to retain an acknowledgement signed by the employee/contract worker. Click for the Employer Notice to Employee (versions in multiple languages are available on the DFML website: Mass.gov/info-details/informing-your-workforce-about-paid-family-and-medical leave).
For employers who have already distributed the notices pursuant to the prior deadline of July 1, 2019, they need only update this notice with the new contribution rates and are not required to obtain a new acknowledgement from the employee.
7. Notice Posting. As of October 1, 2019, employers are required to post a notice of the benefits available under the law in a conspicuous place on each of its premises. The DFML model Notice of Benefits Available Under MGL Chapter 175M fulfills this obligation and can be downloaded here.
Please note that the information provided above is only a summary of the law and regulatory requirements. For additional information, please contact counsel.
Stoneman, Chandler & Miller LLP can help you address these recent developments. If you have any questions on the above, please do not hesitate to contact us.
Stoneman, Chandler & Miller LLP
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Boston, MA 02110
This client alert, which may be considered advertising under the ethical rules of certain jurisdictions, should not be construed as legal advice or a legal opinion on any specific facts or circumstances by Stoneman, Chandler & Miller LLP and its attorneys. This client alert is intended for general information purposes only and you should consult a Stoneman, Chandler & Miller LLP attorney concerning any specific legal questions you may have.
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