Published on: September 23, 2019
On June 28, 2018, Governor Charlie Baker signed into law, “An Act relative to minimum wage, paid family medical leave and the sales tax holiday,” or as it is otherwise known “the Grand Bargain Bill,” which established a permanent sale tax holiday in Massachusets, is intended to increase the minimum wage to be paid to Massachusetts employees over the next five (5) years, to fifteen dollars ($15.00) per hour, and through which, the Paid Family Medical Leave Act (“PFMLA”) was established.
Under the PFMLA, all “covered individuals,” as such term defined in greater detail below, shall become entitled beginning on January 1, 2021, to take up to twelve (12) weeks of paid family leave in a benefit year for the birth, adoption, or foster care placement of a child, or because of a qualifying emergency arising out of the fact that a family member has been called to active duty, or whom has been otherwise notified of any impending call active duty in the Armed Forces; up to twenty (20) weeks of paid medical leave in a benefit year if the covered individual has a serious health condition that incapacitates them from work; up to twelve (12) weeks per benefit year of paid family leave arising out of a covered service member’s call to active duty; up to twenty-six (26) weeks per benefit year to provide care to a family member with a serious health condition suffered while on active duty in the Armed Forces; and with the maximum amount of combined paid family and medical leave available to any covered individual, being capped at twenty-six (26) weeks per benefit year. Further, beginning on July 1, 2021, all covered individuals, shall be entitled to take up to twelve (12) weeks of paid family leave in a benefit year to care for a family member with a serious health condition.
An employer’s duties and responsibilities under the PFMLA, are largely dependent on the average number of covered individuals within that employer’s workforce during the prior calendar year, i.e., January 1, 2018 through December 31, 2018. For purposes of the PFMLA, the term “covered individual,” is intended include any current employee “whose employment has been with an employer in Massachusetts,” regardless of their length of service or the total number of worked, a self-employed individual who has elected coverage under the PFMLA, and whom has reported their self-employment earnings, as required, and in certain circumstances, any former employee, provided that said former employee has not been separated from employment for more than twenty-six (26) weeks at the commencement of that former employee’s family and medical leave.
All of an employer’s W-2 employees (regardless of whether they may be full-time, part-time, or seasonal), are generally considered to be “covered individuals,” under the PFMLA. Additionally, an employer’s 1099-MISC contractors may also be classified as “covered individuals,” under the PFMLA, if they both reside in Massachusetts, and perform services within the same trade or business category as the employer, or if they are regular engaged by the employer to perform services on the employer’s behalf, and for whom, the employer is required to report any payments made, using an IRS Form 1099-MISC.
Notwithstanding anything contrary to the foregoing, if the employer’s average number of 1099-MISC contractors for the prior calendar year, is less than, or equal to the employer’s average number of W-2 employees for that year, then only the employer’s W-2 employees are considered to be covered individuals for purposes of determining the size of the employer’s workforce under the PFMLA. If the employer’s average number of 1099-MISC employees for the prior calendar year, is greater than the employer’s average number of W-2 employees for that same year, then the size of the employer’s workforce for purposes of the PFMLA, is determined by combining the employer’s average number of W-2 employees with the employer’s average number of 1099-MISC employees, for the prior calendar year.
The benefits that are to be made available under the PFMLA, are to be funded through employee contributions and employer contributions (to the extent so applicable, dependent on the size of the employer’s workforce), which are to be collected, and remitted quarterly to the Department of Family and Medical Leave (“DFML”), utilizing MassTaxConnect.
To that end, employers with twenty-five (25) or more “covered individuals,” will be required to remit contribution to the DFMLA in an amount equal to .75% of eligible wages for all “covered individuals,” with .62% allocated for medical leave, and .13% allocated for family leave. Further, employers with twenty-five (25) or more covered individuals in their workforce may deduct up to 40% of the medical leave contribution from a covered individual’s wages, but employers with twenty-five (25) or more covered individuals in their workforce, are required to responsive for 60% of the aforementioned medical leave contribution. However, employers with twenty-five (25) or more covered individuals in their workforce, are permitted to deduct up to 100% of the required family leave contribution from all eligible wages.
The effective contribution rate for employers with less than twenty-five (25) covered is 0.378% of which .248% is allocated for medical leave, and .13% allocated for family leave. Employers with less than twenty-five (25) or more covered individuals are permitted to deduct up to one-hundred percent (100%) of the required medical leave contributions and family leave contributions from the covered individual’s applicable wages.
On April 29, 2019, the DFMLA began to accept applications from those employers already providing paid leave benefits to their work, and the current deadline to apply for an exemption to remitting the first quarter contributions otherwise required under the PFMLA, is December 20, 2019. To date however, private plan exemptions have only been granted in those cases where the private plan benefits are demonstrated to be greater than, or equal to the benefits available under the PFMLA
No later than September 30, 2019, all employers are expected to have posted the “Paid Family and Medical Workplace Poster,” in a highly visible location within the workplace. Further, by September 30, 2019, all employers are required to provide written notice to all of the covered individuals within their workforce, advising of the current PFMLA contribution rates, as stated above, the leave benefits that are to be made available under the PFMLA, and of the protections referenced therein, and to obtain from all such covered individuals, signed acknowledgments confirming their receipt of the aforementioned notice, or a document signed by them, stating that they refuse to acknowledge receipt thereof.
Beginning on October 1, 2019, in the absence of an approved private plan exemption, as referenced above, all employers are to begin making withholdings from the wages of all covered employees within their workforce, and to remit the same, together with any required employer contribution, to the extent so applicable, to the DFMLA utilizing MassTaxConnect, and with all contributions collected for the period of October 1, 2019 through December 31, 2019, due no later than January 31, 2020.
Employers failing to comply with the provisions of the PFMLA may be exposed to serious sanctions and penalties. To that end, and without limitation, any employer failing to provide the required notifications under the PFMLA, may be assessed fines for any first violation, in the amount of $50.00 for each covered individual within their workforce, and the employer may also subject to the assessment of fines in the amount of $300.00 for each covered individual within their workforce, for all subsequent violations of the PFMLA, and employers are to further advised that any failure on their part to comply with any of the provisions set forth within the PFMLA, may also expose them to liability for additional claims, penalties and sanctions, beyond simply, the aforementioned fines.
For any questions regarding this article or any employment matter, please contact Jennifer Barnett at email@example.com.