The Massachusetts legislature passed significant legislation (An Act Relative to Minimum Wage, Paid ‎Family Medical Leave and the Sales Tax Holiday), which includes a number of important provisions ‎impacting employers in Massachusetts, including paid family leave and an increase in the state's ‎minimum wage.‎

Six other states—California, Hawaii, New Jersey, New York, Rhode Island, and Washington—as well as ‎Washington, DC, also have passed laws that provide employees with paid family and medical leave. The new ‎Massachusetts law, however, is arguably the most generous of the bunch. The law's key provisions are ‎outlined below.‎

FAMILY AND MEDICAL LEAVE —EFFECTIVE JANUARY 1, 2019‎

The law establishes a Department of Family and Medical Leave within the Executive Office of Labor and ‎Workforce Development. This new department will be responsible for administering the paid leave program. ‎The law phases in mandated paid family and medical leave over three years with the following key provisions:‎

• All Massachusetts employers must contribute to the Family and Employment Security Trust Fund at ‎an initial contribution rate of 0.63 percent of each employee's wages. For employers with 25 or more ‎employees in Massachusetts, while the employer must remit the full contribution to the Trust Fund, ‎an employer may deduct up to 40 percent of the contribution from an employee's wages for medical ‎leave; for family leave, the employer may deduct up to 100 percent of the contribution from the ‎employee's wages. Employers with fewer than 25 employees in Massachusetts are not required to ‎pay any portion of the contribution for family and medical leave.‎
• The law provides for a seven-day waiting period before family or medical leave benefits are to be paid ‎to employees; however, an employee can use accrued sick or vacation (or other) paid leave during this ‎time.‎
• Beginning on January 1, 2021, employees will be entitled to up to 12 weeks of paid family leave per ‎benefit year, and up to 20 weeks for the employee's own serious health condition. The law sets a ‎maximum aggregate of 26 weeks of paid leave per benefit year.‎
• Employees on paid leave receive wage replacement from the state Trust Fund equal to 80 percent of ‎their wages up to SO percent of the state average weekly wage, and then 50 percent of their wages ‎above that amount, up to a cap of $850/week. The Director of the Department may adjust the ‎maximum weekly benefit amount annually to 64 percent of the state average weekly wage, effective ‎on January 1 of the year following.‎
• Paid "medical leave" will be available to any employee with a "serious health condition."‎
• Paid "family leave" will be available for the following reasons:‎
  • to care for a family member with a serious health condition;‎
  • to bond with the employee's child during the first 12 months after birth or the first 12 months ‎after the placement of the child for adoption or foster care;‎
  • because of any qualifying exigency arising out of the fact that a family member is on active ‎duty or has been notified of an impending call or order to active duty in the Armed Forces; or
  • in order to care for a family member who is a covered service member with a serious injury or ‎illness incurred or aggravated in the line of duty.‎
• An employer must restore an employee who has taken family or medical leave to the employee's ‎previous position or to "an equivalent position" with the same status, pay, employment benefits, ‎length of service credit, and seniority as of the date of leave (except in the event that other ‎employees of equal length of service credit and status in the same or equivalent positions have been ‎laid off due to economic conditions or other changes in operating conditions).‎
• The law adopts many of the same definitions as the federal Family and Medical Leave Act (FMLA), but ‎provides broader coverage in various respects:‎
  • Unlike FMLA, all employees will be eligible for paid family or medical leave, regardless of ‎length of service with the employer or hours worked.‎
  • Unlike FMLA, all employers regardless of size are subject to the law's coverage.‎
  • Under the Massachusetts law, "family member" also includes an employee's domestic ‎partner, grandchildren, grandparents, and siblings, as well as the parents of a spouse or ‎domestic partner.‎
  • ‎"Serious health condition" is defined more broadly under Massachusetts law as an illness, ‎injury, impairment, or physical or mental condition that involves (i) inpatient care in a ‎hospital, hospice, or residential medical facility; or (ii) continuing treatment by a health care ‎provider.‎
• Employees must provide employers at least 30 days' notice of the anticipated starting date of the leave, ‎the anticipated length of the leave and the expected date of return, or shall provide notice as soon as ‎practicable if the delay is for reasons beyond the employee's control.‎
• Employers may apply to the Department for approval to opt out of the state program if they have a ‎program that offers benefits greater than or equal to what an employee would receive in the state ‎program.‎
• Employers will be required to post a notice of benefits available in a conspicuous location at each of their ‎premises. The notice, which must be prepared or approved by the Department, is required to be in English ‎and any other language that is the primary language of five or more employees or self-employed indi‎viduals in any workplace, unless such a such notice is not available from the Department.‎
• Employers must issue to each employee within 30 days after the employee's start date written ‎information provided or approved by the Department in the employee's primary language explaining the ‎available benefits, the employee's and the employer's contribution amounts and obligations, instructions ‎how to file a claim for family and medical leave benefits, and other related information.‎

Although employers will not be responsible for paying for the leave benefits provided by this new enactment, ‎employers will need to make appropriate adjustments to their payroll systems, as well as to their employee ‎handbooks and leave policies, and should become familiar with the law's various notice requirements. ‎Employers should be prepared to adopt these necessary changes in advance of the law's July 1, 2019 effective ‎date. Employers should also be prepared to answer likely questions from employees regarding the details of ‎the new law, their rights to benefits, the amount of such benefits, the purpose of the new payroll taxes, and ‎how the new program will interact with other leave laws and company policies.‎

MINIMUM WAGE AND PREMIUM PAY - EFFECTIVE JANUARY 1, 2019‎

The law gradually raises the state minimum wage over five years from the current $11 per hour to $15 per ‎hour. It also gradually increases the alternative minimum "service rate" for eligible tipped employees from ‎‎$3.75 per hour to $6.75 per hour over the same time period.‎

Additionally, the law phases out over five years the time-and-a-half premium pay requirement for retail ‎employees working on Sundays and holidays, decreasing it ultimately to straight time. Retail work on Sundays ‎and certain holidays, however, will remain voluntary, and refusal to work on those dates cannot result in ‎discrimination, dismissal, discharge, reduction in hours, or any other diminution is an employee's position. ‎

Reprinted with permission from the October 2018 issue of Employee Benefit Plan Review