[Important Updates] Massachusetts Paid Family and Medical Leave

On June 13, 2019, Governor Charlie Baker signed a bill to delay the deductions for Paid Family and Medical Leave.

The delay was pushed to give employers adequate time to understand the rules and inform their workforce, and to allow insurers to offer a private sector-based paid leave option.

Employer and covered individuals obligations to the program will now begin on October 1, 2019, however the individual eligibility will not begin until January 1, 2021. A covered individual can be either W-2 employee or 1099 contractor.

The increases in contributions percentages account for the cost to delay the program from it's original start date of July 1, 2019.

Who does PFML apply to?

All businesses with one or more employees are required to comply with PFML, with the exception of self-employed individuals. Self-employed individuals are allowed to opt into PFML.

Contribution Split

Employers with 25 or more employees will be required to remit a contribution of 0.75% of eligible payroll. This amount will support both types of leave.

The payroll tax of 0.75% that will fund the PFML program will apply to the first $132,900 of an employee's annual earnings. The allocation of this percentage will be determined annually by the Department of Family and Medical Leave.

Of the total 0.75% payroll tax: 0.62% of payroll deductions will be allocated towards medical leave, 0.13% will be allocated towards family leave contributions.

Family Leave: Up to 100% of the family leave contribution can be deducted from employee wages

Medical Leave: Up to 40% of the medical leave contribution can be deducted from employee wages. Larger employers are responsible for contributing the remaining 60%.

Employers with fewer than 25 employees must remit contributions, but are not responsible for remitting the employer's share.

Employers with 25 or more Employees

Employers with fewer than 25 Employees

What you need to do:

Employer Check List

Determine the size of your workforce
Determine contribution amount for Family and Medical Leave
Provide written notice to all individuals in your workforce + collect a signed acknowledgement from each individual
Post the Paid Family and Medical Leave poster at your workplace
Notify On-Time Payroll with size of your workforce, contribution amount, or, if you have applied for exemption

***If the notice was already provided to the workforce prior to June 17, 2019, an addendum will need to be sent.***

Example of notice (English)

For the detailed guide on each step in the checklist, please reference our original blog post.

Penalties

Failure to provide the required notification may result in the following fines:

First violation: $50 per W-2 employee or 1099-MISC contractor

Subsequent violations: $300 W-2 employee or 1099-MISC contractor

Important Deadlines:

September 20, 2019 - Notify On-Time Payroll company size determination and contribution (or exemption).
September 30, 2019 - Send out workforce notice to all current employees/contractors.
October 1, 2019 - MA PFML contributions begin.
October 1, 2019- Workplace poster must be placed.
December 20, 2019 - Deadline to apply for exemption through MassTaxConnect account. If On-Time Payroll does not hear back via email regarding contribution percentage, we will automatically withhold the liability from the employer beginning pay date October 1, 2019.

For Additional Information please reference:

Due to extremely high call volumes, we strongly encourage all clients to email us at payroll@on-timepayroll.com for the best support and service. Alternatively, you may contact the Department of PFML directly, by using this form.

Any questions, comments, or suggestions are always welcomed by the Department of Family and Medical Leave.

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