Learn more about your obligations under the Paid Family and Medical Leave (MA PFML) law as a Massachusetts employer.
Question: To comply with the new PFML law notice requirements, what are my responsibilities as an employer?
- Display the MA PFML Poster in a conspicuous place
- Provide written notice to your current workforce (W2 employees and, if applicable, their 1099-MISC contractors) of PFML law, benefits, contribution rates, and other provisions (outlined in M.G.L 175M sec. 4). The employee notice, which may be provided electronically, must include the opportunity for an employee or self-employed individual to acknowledge receipt or decline to acknowledge receipt of the information.
- New-Hire documentation, updated to include the MA PFML Notice, is sent within 30 days of hire/contract.
A private plan can be fully insured or self-funded. Under a private plan, the employer will pay the premium or, if self-funded, fees and the cost of claims. The employer is responsible for any premium or fees/claim costs in excess of the state employee contribution amount, but they can also choose to pay more.
- Private plans need state approval.
- The employee contribution amount for a private plan is the same as for the state plan.
- Private plan exemptions will need to be renewed and obtain state approval each year.
- If a private plan exemption is approved, employers must still remit contributions to the state until the first day of the quarter on which the approval becomes effective.
- Employers may contribute more or waive employee contributions if they wish.
- Self-insured plans must be bonded.
- Confirmation that the employee provided proper notice to their employer
- Employee’s financial eligibility test (income earned in Massachusetts)
- Certification for leave requested
- Employer approval of leave
- If employee has taken or plans to take leave per benefit application
- Any other relevant information
An approval will include:
- Approval of the reason for leave;
- Frequency — continuous/intermittent;
- Expiration; and
- Benefit payment amount.
Denial will include:
- Reason for denial of the leave and
- Appeal rights.
- Within five business days, the Department of Family and Medical Leave (DFML) will contact the employer with a request to reply to the extension of benefits.
- Within 10 business days, the employer will need to respond to the DFML, including requests for recertification following the expiration of any prior certification confirming the period of incapacity.
Question: How will the determination of what is paid to an employee under a claim be calculated and what is the schedule of those payments?
- Every October, the weekly benefit will be published with the January 1 effective date.
- The portion of the worker’s average weekly wage that is equal to or less than 50% of the state average weekly wage will be replaced at a rate of 80%.
- The portion of the worker’s average weekly wage that is over 50% of the state average weekly wage will be replaced at rate of 50%.
- MA PFML defines benefit calculation, and the maximum payout is 65% of the state’s average weekly wage ($850).
- As of January 1, 2020 Massachusetts’s average weekly wage is $1,431.66.
Under the private option, the carrier can determine if they will allow benefit “stacking”. This determination will be made at the carrier level. Most of the carriers that HRK works with have stated they have requested that the from the DFML to allow the use of accrued PTO up to 100% of pre-disability earnings. However, not all carriers have received approval yet from the DFML for this exception and others will mirror the regulations of the DFML.
Question: What will happen to existing short-term disability (STD) plans when MA PFML benefits start to be payable?
Question: If we use a private carrier for our MA PFML and STD plans, how will those claims be handled?
Question: Are employee contributions to PFML benefits withheld on a pre-tax or post-tax basis, and will the PFML benefits be considered taxable income?
Based on its own review of federal rules and following consultation with the Massachusetts Department of Revenue, the DFML anticipates that the IRS will conclude that employee contributions should be withheld from after-tax wages. A definitive rule for the proper tax treatment of contributions will be available once IRS guidance is issued. The Department of Revenue has not yet commented regarding whether PFML benefits would be considered taxable income — except to say that the tax treatment of PFML benefits is governed by federal tax law.
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This content is provided with the understanding that HR Knowledge is not rendering legal advice. While every effort is made to provide current information, the law changes regularly and laws may vary depending on the state or municipality. The material is made available for informational purposes only and is not a substitute for legal advice or your professional judgment. You should review applicable laws in your jurisdiction and consult experienced counsel for legal advice. If you have any questions regarding this content, please contact HR Knowledge at 508.339.1300 or email us.