Massachusetts Paid Family and Medical Leave
September 18, 2019
Dear Payroll Client,
Under new legislation, Massachusetts will offer a family and medical leave program by creating the Department of Family and Medical Leave. As a Massachusetts employer, you’re likely going to have new responsibilities under the Paid Family and Medical Leave Law.
Beginning in 2021, most Massachusetts employees will be entitled to up to 12 weeks of paid leave to care for a family member or bond with a new child, and up to 20 weeks of paid leave to address their own serious medical issues.
The program will be funded by a new payroll tax, which goes into effect beginning October 1, 2019. Employers may deduct varying contribution percentages from their covered individuals as long as they don’t exceed the maximum percentages listed below. Individual contributions are capped by the Social Security income limit, which is currently $132,900 for 2019.
Employers with 25 or more covered individuals will be required to remit a contribution of 0.75% of eligible wages. This can be split between covered individuals’ withholdings and an employer contribution. Employers with fewer than 25 covered individuals must remit an effective contribution rate of 0.378% of eligible wages. This rate is less because small employers are not required to pay the employer share of the medical leave contribution, reducing the total contribution amount. Contribution submissions will be filed through Mass Tax Connect on a quarterly basis regardless of workforce size.
Independent contractors who contract with a business that issues 1099-MISCs for more than 50% of its workforce may be treated as “covered individuals,” and their contributions will be remitted to the department by that business just like the business’s W-2 employees.
Employers are required to notify all covered individuals by September 30, 2019. Employers must post the “Paid Family and Medical Leave” poster on workplace premises. Employers must provide written notice of contributions, benefits, and workforce protections to all covered individuals and must collect a signed acknowledgement from each covered individual. Both documents can be found by going to: www.mass.gov/dfml/notices.
During the family or medical leave, employers are required to continue to provide for and contribute to the employee’s employment-related health insurance benefits, if any, at the level and under the conditions coverage would have been provided if the employee had continued working continuously for the duration of such leave.
Significantly, taking family or medical leave must not affect an employee’s right to accrue vacation time, sick leave, bonuses, advancement, seniority, length-of-service credit, or other employment benefits, plans, or programs.
Although the right to take leave will begin in 2021, employers must take certain actions much earlier. For more information, we strongly recommend you review the Massachusetts website www.mass.gov/paid-family-and-medical-leave-for-massachusetts-employers for details about the provisions of the Paid Family and Medical Leave program and to help you prepare.
Norman & Graham, PC