The past few days saw two major updates to the Massachusetts Paid Family and Medical Leave Act (PFMLA) of which employers should be aware: a three-month extension of various deadlines for employer compliance and the issuance of final regulations under the Act Department of Family and Medical Leave (the “Department”).
As we reported last week, the Governor and Legislature agreed to extend the start date for contributions from July 1, 2019 until October 1, 2019. The Legislature passed such a bill, and the Governor signed it into law on Friday, June 14, 2019. The new law not only extends the start date for contributions, but also extends the deadline by which employers must notify their workforce of the new PFMLA law from June 30 to September 30, 2019, and the deadline by which employers must apply for an exemption from contributions until December 20, 2019. The new law also increases the contribution percentage from 0.63% of average weekly wages to 0.75% to make up for the lost quarter of contributions and ensure the trust will be fully funded before benefits start in January 2021.
Then, on Tuesday, June 18, 2019, the Department published the final version of its regulations on the PFMLA. These regulations both confirm much of the Department’s prior informal guidance and provide additional clarity where gaps existed. Among the most significant updates and changes are:
While the regulations provide some much needed clarity on the law, areas of confusion remain. For instance, the regulations do not specify whether exempt plans must provide benefits to recently-unemployed workers. Additionally, the Department has not yet provided a form for bonds for exempt plans, nor has it received guidance from the IRS on the federal tax treatment of PFMLA contributions, deductions, and benefits. Based on these and other continuing questions, we expect further guidance from the Department may follow. Fortunately, employers have some additional time to think about these developments and evaluate the options available to them. We will continue to keep you updated as these issues evolve.