Employers with employees—and, in some cases, 1099-MISC contractors —in Massachusetts have obligations starting next week under Massachusetts’ new Paid Family and Medical Leave Law (“MPFML”), which will entitle most Massachusetts workers to paid family and medical leave. Although benefits will not be available until 2021, employers must do two things now: provide notice to workers of their rights and obligations under MPFML by September 30, 2019, and implement required payroll deductions starting October 1, 2019.
A newly created state agency, the Department of Family and Medical Leave (the “Department”), will administer the paid leave program. The new law also creates the Family and Employment Security Trust Fund (the “Trust Fund”), from which paid leave benefits will be paid to eligible individuals who apply for them. The Trust Fund will be funded by employer and employee tax contributions. Below is a quick recap of the law’s key provisions and important upcoming deadlines.
Covered Employers: The law applies to virtually all private Massachusetts employers, regardless of their size or number of employees. Out-of-state employers with even one Massachusetts worker are generally covered.
Covered Workers: All W-2 employees (full-time, part-time and seasonal workers) who meet the financial eligibility requirements for unemployment benefits under Massachusetts law are covered by MPFML and must be counted for purposes of tax contributions. In other words, if you are required to report the employee’s wages to the Massachusetts Department of Unemployment Assistance (“DUA”), the employee is covered.
In addition, 1099-MISC contractors are covered if they constitute more than 50% of the employer’s total workforce and they:
- perform services as an individual entity;
- live in Massachusetts;
- perform the services in Massachusetts; and,
- do NOT qualify as an independent contractor under Massachusetts’ unemployment statute, M.G.L. c. 151A—meaning that the individual must perform services within the usual course of the employer’s business.
Qualifying Uses and Maximum Benefits per Benefit Year
Benefits will be available to eligible individuals for the following purposes:
- to bond with a child within the first 12 months of the child’s birth or placement through adoption or foster care—12 weeks paid leave, which may be taken intermittently or on a reduced schedule upon mutual agreement of the employer and covered individual;
- because of a qualifying exigency arising out of the fact that a family member is on or has been called to active duty in the Armed Forces—12 weeks, which may be taken intermittently or on a reduced schedule;
- to care for a family member who is a covered service member (as defined by the law) with a serious health condition—26 weeks, which may be taken intermittently or on reduced schedule if medically necessary;
- medical leave for an employee’s own serious health condition—20 weeks, which may be taken intermittently or on a reduced schedule if medically necessary; and
- to care for a family member (as defined by the law) with a serious health condition—12 weeks, which may be taken intermittently or on a reduced schedule if medically necessary.
Benefits will be available beginning January 1, 2021, except that benefits to care for a family member with a serious health condition become available July 1, 2021. Eligible individuals may take up to 26 total weeks of combined paid family and medical leave per benefit year. Employees (but not contractors) who take paid family or medical leave are generally entitled to reinstatement to the same or an equivalent position upon their return from leave. Benefits will be based on the worker’s average weekly earnings, subject to a maximum weekly benefit amount of $850 per week for 2021 (this amount will be adjusted annually based on the state average weekly wage).
Tax Contributions: Paid leave will be funded by a .75% payroll tax contribution (to be adjusted annually), which will be paid into the Trust Fund. Employers with 25 or more employees in Massachusetts will be required to pay the full contribution but may deduct from employees’ wages up to 100% of the contribution for family leave and up to 40% of the contribution for medical leave. Employers with fewer than 25 employees in Massachusetts will not be required to pay the employer portion of the contribution but will still need to deduct the employee portion from employees’ wages and remit it to the Trust Fund.
Withholding is required beginning October 1, 2019. More information about calculating the required contribution is available on the Department’s website at https://www.mass.gov/guides/employers-guide-to-paid-family-and-medical-leave. Employers must remit contributions quarterly through the Massachusetts Department of Revenue’s MassTaxConnect system. Contributions for the October-December 2019 quarter are due January 31, 2020.
Required Notice to Workers: Employers are required to display a workplace poster about MPFML, which is available here. Additionally, on or before September 30, 2019, employers must provide written notice to their Massachusetts workforce about certain aspects of MPFML, together with an opportunity to acknowledge or decline to acknowledge receipt. Sample notices are available from the Department here. Note that there are separate notices for W-2 employees and 1099-MISC contractors, as well as for employers with 25 or more covered individuals and those with fewer than 25 covered individuals.
Exemptions: Employers with private paid benefits plans may apply for an exemption from MPFML if their plans provide benefits and protections equal to or greater than those provided under the statute. Private plan exemptions for the first quarter of contributions are due December 20, 2019. See the Department’s website for additional details.