Massachusetts Employers Receive New Guidance Regarding Reimbursement for Qualifying Paid Leave Plans Under the State’s PFML Law

Epstein Becker & Green

The Massachusetts Department of Family and Medical Leave (“DFML”) continues to provide ongoing substantive and procedural guidance regarding the implementation of the state’s Paid Family and Medical Leave Program (“PFML”). As previously reported, prior guidance has addressed how to determine if an employer meets the 25-covered individual threshold for reporting purposes, whether to count visa holders as part of the workforce for PFML purposes. Last week, the DFML provided clarification as to the requirements for an employer to qualify for reimbursement for benefits that it has paid as part of its private paid temporary disability, family, or medical leave policy.

Policies and Programs Eligible for Reimbursement

Under Section 3 of the PFML law, a Massachusetts employer that has a private benefits plan, but has not otherwise received an exemption to the PFML contribution requirements may be eligible for reimbursement for its paid temporary disability, family, or medical leave benefits. An employer’s private policy or program will qualify for reimbursement if the policy or program meets two criteria.

First, the leave program or policy must be granted to workers for one of the PFML’s qualifying reasons. Qualifying reasons include taking leave to care for a family member with a serious health condition; to bond with a newborn child; to bond with a child after adoption or foster care placement; to manage family affairs when a family member is on active duty in the armed forces; or to manage a personal serious health condition.

Second, the program or policy must be separate from other types of leave that the employer offers, such as sick leave, annual leave, vacation, personal leave, or paid time off (“PTO”). Massachusetts employers that have not otherwise received an exemption to the PFML contributions and wish to apply for reimbursement for paid benefits provided to covered individuals will not be reimbursed for payments to a covered individual who has chosen to use sick leave, vacation, personal leave, or PTO to cover part of their absence to supplement their income. However, employers may seek such reimbursements for disability salary continuation policies or parental leave policies when the employee is receiving PFML benefits. Employers may, additionally, receive reimbursement for voluntary programs where employees donate leave time to fund a bank for the benefit of a co-worker experiencing a PFML qualifying reason.

Stay Alert for Further Guidance

The DFML is expected to provide further information about how to apply for reimbursements in the coming months leading up to the start of benefits in January 2021. Massachusetts employers should regularly check the DFML website for updates.

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