Following recent legislation signed by Governor Charlie Baker, Massachusetts is now preparing for a new paid family and medical leave requirement. This program, known as the Massachusetts Paid Family and Medical Leave (MA PFML), makes Massachusetts the sixth state to make paid family leave a requirement – following California, New Jersey, New York, Rhode Island and Washington State. As directed by the legislature, premium payments begin on July 1, 2019 and benefits can be taken starting January 1, 2021.
The MA PFML program will be funded by premiums paid by both employees and employers, and will be administered by the Massachusetts Department of Family and Medical Leave. Workers will be allowed to take between 12 and 26 weeks of paid time to treat a serious illness, care for a sick relative, care for a newborn child, or handle matters stemming from a family member’s military deployment or injury.
Rulemaking for the new law is expected to start soon. The legislation provided a timeline for several steps in its progress toward enactment:
March 31, 2019
- Proposed regulations published for public comment and hearing
July 1, 2019
- Final regulations published to implement MA PFML
- Employers must post notice of rights under the program
- Begin collecting tax contributions at an initial rate of 0.63% of the employee’s wages
January 1, 2021
- Begin to pay leave benefits
October 1, 2021
- Begin annually fixing contribution rate
- Publish first annual report of program performance
- Initial annual adjustment to the maximum weekly benefit amount
Key features of the MA PFML
While we know significant changes to the law may come based on feedback from the public during the rulemaking process, the following key features are currently included in the MA PFML.
Funding: This program is designed to be fully funded by employee and employer contributions. Employers will deduct contributions from employees’ pay at an initial premium rate of 0.63% beginning July 1, 2019. Employers may deduct up to 100% of family leave premiums from the employees' wages, as well as up to 40% of the premiums for medical leave. The employer is responsible for 60% of the medical leave premium at minimum, or they may also elect to pay a larger share of the premiums.
An employer is allowed to apply for – and offer their employees – a private plan. Private plans are paid family and medical leave benefits offered by employers directly to employees. Private plans may be self-insured by the employer or insured by an insurance policy. Private plans must, at a minimum, offer the same benefits and duration of leave as the state plan, and meet all reporting requirements.
Effective date: The effective date of this law is January 1, 2019. Benefits are payable effective for qualified leaves that begin on or after January 1, 2021.
Eligibility: Employees are eligible for family and medical leave benefits after working for at least 1,250 hours during the qualifying period. They’ll also have to file claims for benefits, agree to disclose certain information, notify their employers, and meet certain documentation requirements, depending on the type of claim.
Job protection: Just like under the Family and Medical Leave Act, employees who return from leave under this law will be restored to a same or equivalent job.
Qualifying absence: Employees may file for benefits to:
- Care for the serious health condition of a family member
- Bond with a new child during the first 12 months after birth, adoption or foster care placement
- Care for a family member as a result of military exigency
- Care for a family member who is a servicemember injured in the line of duty
- Care for their own injury or illness
- Care for their own pregnancy
Definition of family member: The law includes care for the following:
- Spouse or domestic partner
- Child (biological, adopted, foster or in loco parentis)
- Parent or parent of a spouse or domestic partner
Benefit amount: Benefits will be calculated as a percentage of the individual's average weekly wage during the two highest quarters in the qualifying period, based on a sliding scale. The maximum weekly benefit amount is $850, adjusted annually. Benefits will be paid after a seven-calendar day waiting period.
Next steps for employers
Though the regulations are still being finalized, we recommend that employers:
- Evaluate their employee demographics to determine whether any employees meet the eligibility criteria.
- Engage with a benefits consultant and/or legal counsel for guidance on policy/plan development, including updating employee handbooks or leave material to include MA PFML.
- Explore if a private plan is feasible for your company. Generally, a benefits consultant can assist with a feasibility analysis.
- Prepare payroll functions to add another deduction for MA PFML.
- Prepare to maintain the employees’ existing health coverage for the duration of the MA PFML.
- Review and provide comments to the Massachusetts Department of Family and Medical Leave during the rulemaking process.
Sedgwick will be fully prepared to support customers for whom we administer disability and absence management programs. Our disability and absence compliance group is currently monitoring the rule making process and will provide our feedback to regulators. We will continue to provide updates on matters regarding the MA PFML as they arise.
I am looking forward to speaking about absence and disability programs at the 2018 DMEC Annual Conference in Austin, TX next month. Please leave your comments or questions below as I would like to continue the discussion on this topic.