Questions and Answers on the New Massachusetts Paid Family and Medical Leave Law

Holland & Knight LLP

Holland & Knight LLP

The Massachusetts Department of Family and Medical Leave on March 29, 2019, published revised draft regulations on the Massachusetts Paid Family and Medical Leave (PFML) law for public comment. On July 1, 2019, the Department is scheduled to issue final regulations, and on the same day, employers must begin to make payroll deductions to fund the state-administered paid leave program. Eligible workers may take paid leave for certain types of leave beginning Jan. 1, 2021.

Holland & Knight previously provided an overview on the law (see "Massachusetts and New Jersey Make Changes to Paid Leave Laws," Feb. 28, 2019). This client alert explores some of the details of the law, the common questions and the new draft regulations.

What Is the PFML?

The PFML provides that certain workers in Massachusetts may receive paid leave for family leave, an employee's health condition and service-member related events. The Department administers the paid leave through a Family and Employment Security Trust Fund (Fund). Employers and employees contribute to the Fund, and the Department administers payments to the employee.

What Types of Leave Does the PFML Law Provide?

There are three types of paid leave:

  1. to care for a family member who has a serious health condition or to bond with an employee's child following birth or placement for adoption
  2. to care for the employee's own serious health condition
  3. to address any qualifying exigency arising from a family member who is on active duty and who has been notified of an impending call or order to active duty or to care for a family member who is a covered service member

How Long Is the Leave?

The law provides for 12 weeks paid leave to care for a family member or to bond with a child, 20 weeks for the employee's own health condition and 26 weeks for service member-related events. The leave is capped at 26 weeks per benefit year. A benefit year is the 52 consecutive week period beginning the Sunday after the first day PFML is used by the employee.

An employee's PFML allotment is based on the number of hours or days the employee typically works. For example, if an employee works a part-time schedule of variable hours, the amount of PFML that a covered individual is entitled to is determined on a pro rata basis. If an employee's schedule varies from week to week, pay is calculated based on a weekly average of the employee's scheduled hours over the 12 months prior to taking leave under the PFML.

Who Is a "Covered Individual" Under the PFML?

All current part-time and full-time Massachusetts employees are "covered individuals" under the PFML. To meet the law's financial eligibility requirement, an employee must have earned at least 30 times the weekly benefit amount the individual would be eligible to collect and at least $4,700 during the employee's prior year of employment.

A former employee is also a "covered individual" if his or her employment ended within 26 weeks of the start of the PFML, and the former employee also meets the financial eligibility requirement.

A self-employed individual who resides in Massachusetts may also qualify as a "covered individual" eligible for PFML. If the self-employed individual meets the same financial eligibility requirements, the individual may become eligible by either 1) electing coverage by submitting a Self-Employed Notice of Election to the Department, paying quarterly contributions for an initial minimum time period and remaining enrolled for a minimum of three years; or 2) working for a business that has 50 percent or more of its workforce as self-employed individuals, which qualifies the self-employed individual as a "covered contract worker."

What Employers Are Subject to Under the PFML?

All private Massachusetts employers, regardless of size, are required to provide employees with PFML.

What Contributions Must an Employer Make to the Fund?

An employer with less than 25 employees must contribute to the Fund on behalf of their employees and it need not make an employer contribution. The full deduction may be made from the employee's pay. An employer with 25 or more employees must contribute to the Fund on behalf of their employee and must also make an employer contribution.

To determine if an employer meets the 25 or more employee threshold, the employer must calculate the average number of individuals on its payroll, including all full-time, part-time, seasonal and temporary employees, and any independent contractors it paid for services.

A business that has 50 percent or more of its workforce as self-employed individuals must also make contributions on behalf of those covered contract workers.

What Payroll Tax Contributions Must an Employer Make for Employees?

Starting July 1, 2019, all employers are required to contribute to the Fund through a payroll tax.

The payroll tax is 0.63 percent of the employee's wages. The payroll tax is effective up to the contribution and benefit base limit established by the U.S. Social Security Administration for purposes of the Federal Old-Age, Survivors and Disability Insurance program (currently $132,900).

The Department has determined that 0.52 percent will be allocated to the medical leave portion of the Fund and 0.11 percent will be allocated to the family leave portion of the Fund. For employers with 25 or more employees, the law permits the employer to require the employee to pay up to 40 percent of the medical leave allocation and to require the employee to pay up to 100 percent of the family leave allocation.

What Payroll Tax Contributions Must an Employer Make on Behalf of Self-Employed Individuals?

A self-employed individual who elects coverage by submitting a Self-Employed Notice of Election to the Department and following the statutory requirements is responsible for all contributions (the full 0.63 percent contribution).

If a self-employed individual is considered a covered contract worker by performing work for a business that has 50 percent of more of its workforce as self-employed individuals, then that employer must include these individuals as employees for purposes of making contributions of the Fund. The payroll tax is 0.63 percent of the covered contract worker's earnings from the employer. The employer may require the covered contract worker to pay up to 40 percent of the medical leave allocation and to require the covered contract worker to pay up to 100 percent of the family leave allocation.

When Will Paid Leave Be Available?

The dates are staggered based on the reason for the leave. On Jan. 1, 2021, paid leave is available for an individual's own serious health condition, bonding with a new child and service member-related events. On July 1, 2021, paid leave is available for a family member's serious health condition.

How Much Weekly Pay May an Individual Receive?

The weekly benefit amount is calculated based on a percentage of the individual's earnings and is capped at $850 per week. The amount is calculated at 80 percent of the individual's weekly earnings if the individual's average weekly wage is equal to or less than 50 percent of the state average weekly wage, and 50 percent of the individual's weekly earnings if the individual's average weekly wage is more than 50 percent of the state average weekly wage. The Department will reevaluate the maximum weekly benefit annually.

There is a seven-day waiting period before an individual may receive pay from the Fund. During the waiting period, an employee may elect to use accrued paid time off (PTO). An employer cannot require an employee to use PTO during the waiting period.

May a Covered Individual Take Intermittent or Reduced Schedule Leave?

Yes, in certain circumstances. A covered individual may take intermittent or reduced schedule leave for the individual's own serious health condition, or to care for a family member's serious health condition or to care for a service member. However, an individual may not take intermittent or reduced schedule leave for child bonding or to address a qualifying exigency arising out of a service member's deployment, unless the employer and covered individual specifically agree. A covered individual who takes intermittent or reduced schedule leave will receive a pro-rated weekly benefit.

Does PFML Run Concurrently with Other Leave?

Yes, in some circumstances. PFML will run concurrently with any other leave taken under the Family and Medical Leave Act (FMLA), Massachusetts Parental Leave Act and the Massachusetts Earned Sick Time Law, provided the leave is for a qualified reason under those laws.

May an Employer Require That Payments Under PFML Be Coordinated with Other Payments Offered Under an Existing Employer Plan?

Yes, in certain circumstances. An employer may require that any PFML payment be made concurrently or otherwise coordinated with payment made or leave allowed under a collective bargaining agreement or employer policy, so that the employee receives the greater of the benefits available for the covered reason. Any such paid leave by the employer will count against the allotment of PFML leave. The employer must give an employee notice of this requirement.

May an Employer Require That an Employee Use Sick, Vacation or Personal Time During PFML Leave?

No, an employer may not compel an employee to exhaust rights to any sick, vacation or personal time prior to, or while, taking PFML leave.

Must a Covered Individual Provide Notice to the Employer of PFML Leave?

Yes. An employer may require an employee to provide notice of the anticipated start date of the leave, the anticipated length of the leave, the type of leave and the expected return date at least 30 days in advance (or as soon as practicable). The employer must first notify employees of this requirement, such as through a written PFML workplace policy.

How Does an Individual File a Claim for Benefits at the Department?

To request benefits, the individual will file a claim for benefits directly with the Department, including a certification evidencing that the leave serves a covered purpose. The certification must include information about dates of the proposed leave and appropriate medical facts or other facts relevant to the purpose of the leave.

The Department will notify the employer of the individual's claim for benefits within five business days and verify the individual's name, type of leave at issue, expected duration of the leave, whether the request is for continuous or intermittent leave and any other information relevant to the claim.

The Department will notify the applicant of his or her eligibility (or ineligibility) within 14 days of receiving the claim. The Department will begin payment within 14 days of the eligibility determination. The Department will provide the individual and the employer with contemporaneous notice.

An individual may appeal a denial of PFML benefits to the Department by filing a request for appeal within 10 days of the party's receipt of notice of the determination.

Does an Employee Accrue and Receive Benefits During PFML?

Yes. The employee must continue to receive health insurance benefits and accrue other employment benefits typically provided by the employer, including vacation time, sick leave, seniority and length of service.

Does an Employee Have a Right to Job Restoration?

Yes. An employee returning from PFML is entitled to their same position, or an equivalent position with the same pay, employment benefits, seniority and length of service.

An employer is not required to restore the employee to his or her position "if 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 affecting employment during the period of leave," provided that the employee who took leave "shall retain any preferential consideration for another position to which the employee was entitled as of the date of leave."

May an Employer Require an Individual Returning from PFML to Complete a Fitness-For-Duty Certification?

Yes, in certain circumstances. If the employer has a uniformly applied policy or practice that requires all similarly situated employees or covered individuals (e.g., employees in certain positions or employees with certain serious health conditions) to obtain and present a certification from their healthcare provider that the individual is able to resume work, then the employer may do so for an individual who takes leave for his or her own serious health condition. The employer must provide employees and covered individuals with notice of the fitness-for-duty requirement.

Does the Act Include Anti-Retaliation Provisions?

Yes. An employer is prohibited from interfering with an employee's rights under the law or retaliating against an employee for exercising the employee's rights.

This law creates a presumption of retaliation if there is any negative change to an employee's status or adverse action against the employee during the leave or within six months of the leave. The employer must rebut the presumption with "clear and convincing evidence" that the action was not retaliation and that the employer had "sufficient independent justification" for taking that action and "would have taken such action in the same manner and at the same time the action was taken."  

Does the Law Provide a Private Cause of Action for an Alleged Violation?

Yes. An individual may bring a civil action in Superior Court for an alleged violation of the anti-retaliation, job restoration and continuation-of-benefits (e.g., right to accrue vacation and other benefits, and continuation of healthcare benefits) provisions. The action must be brought within three years of the alleged violation. Unlike claims under Chapter 151B or the Massachusetts Wage Act, there is no administrative filing requirement. The plaintiff has a right to a jury trial.

A prevailing plaintiff may be awarded various remedies, including all common law remedies, three times the employee's lost wages and benefits, and reasonable attorney's fees and costs. In addition, the court may issue a temporary restraining order or injunction and order reinstatement.

Are There Workplace Posting Requirements?

Yes. Starting July 1, 2019, employers are required to post a notice outlining the benefits under PFML in a conspicuous place. The posting must be in English and any other language that is the primary language of five or more employees or covered individuals. The Department has published a notice available for use.

Must an Employer Provide Information to the Employee Upon Hire?

Yes. Beginning July 1, 2019, the employer must provide written information to an employee within 30 days of the employee's start date. The written information must be in the employee's primary language and it must explain the employee's rights under the PFML. This notice may be distributed by email. The employer must obtain from each employee a written acknowledgment of receipt of the information, or the employer must maintain a statement indicating the employee's refusal to sign.

Additionally, the employer must provide notice to a self-employed individual or covered contract worker about PFML at the time that the employer enters into the contract with the individual. The individual must provide written acknowledgment of receipt of the information or the employer must maintain a statement indicating the individual's refusal to sign an acknowledgment.

What Is the Timeline for Implementation?

Here the key upcoming dates:

  • April 29, 2019: The Department will make available applications for private plan approval to employers who already provide paid leave benefits to their workforce.
  • July 1, 2019: Payroll deductions begin. The Department issues final regulations.
  • Jan. 1, 2021: Paid family leave benefits available for bonding with a new child, service member-related leave and for serious personal health conditions.
  • July 1, 2021: Paid family leave benefits available for a family member's serious health condition.

May an Employer Adopt a Private Paid Leave Plan Instead of Contributing to the Fund?

Yes, with approval by the Department.

An employer may elect to adopt a private plan in lieu of contributing to the Fund, provided the private plan confers all of the same benefits as PFML, does not cost employees more than they would be charged under the state plan, includes equivalent or better job and benefit protections, and is approved by the Department.

An employer seeking to use a private plan must apply for approval annually. If the Department approves the plan, the employer must provide the Department with 30 days' notice before making any changes to the terms or conditions of the plan.

What Is MassTaxConnect and How Does It Relate to PFML?

All Massachusetts employers and self-employed individuals who elect coverage under PFML are required to file earnings reports and remit contributions electronically through the Massachusetts Department of Revenue's MassTaxConnect system. Registration can easily be completed online if the business or self-employed individual does not have a preexisting account. Employers may access further information on how to electronically register with MassTaxConnect.

Where Do I Go for More Information?

Holland & Knight is available to assist our clients with the PFML. Additionally, employers may access information through these sources:

What Are The Next Steps for Employers?

Employers should evaluate their workforce (including self-employed individuals) to assess whether they meet the 25-employee threshold.

Employers should also work with their payroll providers to address the administrative aspects of payroll contribution requirements, which become effective July 1, 2019. Additionally, employers should register with MassTaxConnect.

In anticipation of the July 1, 2019, deadline, employers should prepare to distribute all required notices to employees and covered contract workers, and post required workplace notices.

In connection with employees having a right to take PFML leave starting Jan. 1, 2021, employers should consider how such leave will relate to existing leave policies and should anticipate making changes to handbooks and policies.

If an employer is considering a private plan to adopt in lieu of participating in the PFML, it should evaluate that option and prepare to have that plan approved by the Department.

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