Learn more about your obligations under the Paid Family and Medical Leave (MA PFML) law as a Massachusetts employer.

Please find the Q&A section below, after the Resources.

Question: How is the public plan funded?

Answer: Refer to our MA PFML Fact Sheet for the public option. For the private plans, there are premiums that are paid by the employer and the employee. The employee portion is paid through payroll deductions. The employer cannot deduct in excess of the state-allowed contributions.

Question: To comply with the new PFML law notice requirements, what are my responsibilities as an employer?

Answer:

  • 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.

The Commonwealth has published a downloadable template in the Informing your workforce section of their PFML website, or employers can create their own.

Question: What is the difference between a public and a private plan?

Answer: The state program is funded through premiums equal to 0.75% of each employee’s wages, up to the Social Security maximum. Employers share the costs with their employees and, beginning October 1, 2019, started withholding employee contributions through payroll deductions. The employer remits premiums collected to the state on a quarterly basis.

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.

Question: Is there a minimum number of employees an employer must have to have a private option?

Answer: Yes, most carriers offer Private Plan Coverage down to 10 employees; while there are exemptions, this is generally what we are seeing.

Question: What are the requirements for offering a private plan?

Answer: MA PFML allows employers to opt out of either the state Family Leave or state Medical Leave plan if they have a state-approved private Paid Family Leave, Paid Medical Leave, or Paid Family and Medical Leave plan that offers comparable or more generous benefits than the state plan:

  • 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.

Question: How will MA PFML claims be adjudicated?

Answer: Both under public and private plans, determinations for benefits will be based on:

  • 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

Question: How will employers and employees be notified of claims decisions?

Answer: Both under public and private plans, the employer and employee will receive notice of the decision.

An approval will include:

  • Approval of the reason for leave;
  • Duration;
  • Frequency — continuous/intermittent;
  • Expiration; and
  • Benefit payment amount.

Denial will include:

  • Reason for denial of the leave and
  • Appeal rights.

Question: What if an employee needs to extend their benefits beyond the initial approval period?

Answer: Employees may ask for an extension of benefits by filing an extension which may include additional certifications:

  • 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?

Answer: The DFML will use the wages submitted by all employers to calculate the employee’s weekly benefit. The DFML has published a benefit calculator that estimates the benefit.

  • 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.

Question: How do you calculate the claimant’s average weekly wage?

Answer: “Average weekly wage” is an amount equal to one twenty-sixth of the total wages reported for an individual in the two highest quarters of his/her base period, provided that wages reported include not more than two quarters in that base period. His/her weekly wage shall be deemed to be one thirteenth of the total reported for the highest quarter. If the weekly wage includes a fractional part of a dollar, it will be raised to the next highest dollar.

Question: Can employees use accrued PTO to supplement pay while on leave?

Answer: Under the public option, No. The employee will choose PFML payments or PTO payments; they cannot receive both payments for the same days. Employees may choose to use PTO/accrued paid leave at the same time they qualify for benefits; however, if they do, DFML will count the days so the PFML benefit and PTO run concurrently. Employers are required to notify employees that choose to receive PTO instead of the state paid benefit, that the leaves will run concurrently to provide job protections under MA PFML.

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: Are there wait periods?

Answer: Yes refer to our MA PFML Fact Sheet. Employees will be allowed to use accrued paid time off to collect up to 100% of pay during the 7-day wait period; however, that time will still count against the total leave allotment.

Question: What will happen to existing short-term disability (STD) plans when MA PFML benefits start to be payable?

Answer: The majority of existing STD policies already allow benefits to be reduced by any government compulsory benefit plan (such as DFML medical benefits from a PFML plan) or program that provides payment for loss of time from the employee’s job due to disability, whether such payment is made directly by the plan or program, or through a third party. Please review your STD policy for additional details or contact HRK if we are your benefit broker.

Question: If we use a private carrier for our MA PFML and STD plans, how will those claims be handled?

Answer: Each carrier will handle this differently. Many of the carriers HRK works with will have one integrated claim form; for the carriers that do not, most of them will coordinate the claim intake (i.e., have the same claim examiner who will handle both the STD and PFML claim) when there is overlap.

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?

Answer: There is no formal answer yet; however, it is anticipated that employee contributions should be withheld on a post-tax basis. The Commonwealth has requested guidance from the IRS on this question and others related to the tax implications of PFML contributions and benefits. State PFML tax issues are part of the IRS’s 2020 Priority Guidance Plan, which identifies the IRS’s top priorities for guidance for the coming year. Until IRS guidance is issued, individuals and businesses are urged to consult with their own tax advisors on these questions.

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.

Question: Can you clarify the eligibility of MA PFML for my out-of-state employees?

Answer: Generally, the DFML follows the same eligibility criteria as the unemployment insurance program in Massachusetts. If you are required to report a W-2 employee’s wages to the Department of Unemployment Assistance (DUA), those employees should be counted. These employees don’t need to reside in Massachusetts to be covered. If the employee is paying Massachusetts state income taxes, they should file and collect unemployment from Massachusetts.

Question: How will the MA PFML impact my employees’ short-term disability (STD) claims?

Answer: The new Massachusetts PFML will impact STD benefits for clients and their employees. To help make administration easier, most of the carriers we work with will be processing automatic STD rate reductions on Massachusetts policies to offset amounts employees will receive from the state.

Question: Have the PFML Workplace Posters been updated?

Answer: Yes, they have been revised and updated as of 11/17/2020 and may be downloaded from the Department of Family and Medical Leave’s website. All employers are required to display an updated poster at their place of work in accordance with their own practices.

Question: Our employee has decided not to file for MA PFML just STD at this time, is that allowed?

Answer: If your employee is in Massachusetts, most carriers will offset the STD payment amount if the claim is approved with the assumption that the employee is eligible under MA PFML, without a denial letter from the DFML, that offset will remain for the period of the leave, so it is in your employee best interest to apply for both STD and MA PFML at the same time.

Question: Will MA PFML require employers to process Third Party Sick pay or does the Commonwealth process a Tax Notice for the 2022 Tax Season?

Answer: For employers on the Public PFML, it is unclear if the state will generate a W-2 at year end (like they do for unemployment – which is most likely) or if there will be a 3rd party sick payment that the employer needs to add to payroll (like we do for STD).   As soon as we know more we will be sure to provide our clients an e-Alert.

Question: How do I know if my part-time/new employee qualifies for MA PFML based on the hours they have worked?

Answer: In order to be eligible for MA PFML, employees must meet the following criteria:

  • Receive a Massachusetts Form W-2
  • Have earned at least $5,100 during the last 4 completed calendar quarters, and at least 30 times more than how much they would be eligible to get each week from their Paid Family Medical Leave benefits
  • The earnings test would include all Massachusetts earnings even if it was from more than one source.

Question: Is MA PFML like FMLA? Meaning, will our teachers, who are not paid over the summer break, still be eligible to collect MA PFML during the break and it will it count towards their MA PFML allotted time?

Answer: When it comes to the federal Family Medical Leave Act (FMLA), schools, like other employers can only count leave time as FMLA leave when the employee would be otherwise working. For example, teachers who are not required to work during school breaks (i.e. spring, summer and winter breaks), if they took FMLA leave before one of those breaks, the break period doesn’t count as FMLA. However, weeks in which the school is open for a portion of the week, like Thanksgiving week, the time would be counted toward FMLA leave (assuming the teacher is scheduled to work during those weeks).  Currently, the guidance we have received is that since teachers are not paid over the summer break, they would not collect PFML and it also won’t count towards their PFML allotted time.

It is important to note that at the recent DFML town halls, the state relayed they will issue guidance on MA PFML benefits for teachers and school employees during summer breaks, but there is no ETA yet on when this guidance will be released. The state is reportedly looking into adopting the FMLA guidance that work schedule drives the availability of PFML benefits, so basically mirroring the FMLA. The DFML’s position is that if a school employee is not scheduled to work during the summer break, MA PFML benefits are not payable. This will apply to both the state and private plans; meaning any private plan carriers and administrators would have to follow the state’s guidance, they will not get to pick and choose.

For now we are in a holding pattern until the state provides their interpretation of the law.

Once the state issues this guidance, we will be sending an e-Alert to all of our clients. Please confirm you currently get our e-Alerts.

Question: What is the deadline to file for a MA PFML exemption?

Answer: Currently, there isn’t a filing deadline to seek exemption from the State. Employers just need to file for the exemption the day before the quarter they are seeking the exemption.

Expires

Renewal start Renewal end Exemption effective
31-Dec 1-Oct 31-Dec 1-Jan
31-Mar 1-Jan 31-Mar 1-Apr
30-Jun 1-Apr 30-Jun 1-Jul
30-Sep 1-Jul 30-Sep

1-Oct

Question: We have a paid parental leave policy that provides employees with 100% of their pay for a certain number of weeks. How does this benefit change with MA PFML benefits?

Answer: There isn’t a one size fits all approach, as it depends on whether you have a private or public PFML plan, as well as how many weeks of paid leave you offer. The state and some private carriers do allow for reimbursement so that may be one option. Another option would be to “top off” what the employee is being paid from PFML (and STD if applicable) for however many weeks the benefit provides. Either way, we recommend revisiting your paid parental leave policy to ensure the terms and conditions align with MA PFML.

Question: We offer a Short Term Disability (STD) plan. How will MA PFML benefits coordinate with STD?

Answer: Depending on the STD plan design, it will integrate with MA PFML, however there isn’t a one size fits all approach since STD plans designs are unique, for example the maximum benefit. In some cases, an employee may not be eligible for STD since they have received a greater PFML benefit. Generally speaking, we see that PFML pays first and STD would offset.

Question: Does the 7-day wait period reduced from the employee’s total leave entitlement?

Answer: Yes, the week waiting period is counted against the leave – this is true whether or not the employees uses any accrued paid leave or other paid leave program.

Question: Can we force and employee to file a MA PFML claim?

Answer: No, employers cannot force an employee to file a claim, or take adverse action should an employee file or not.

Question: We have an unlimited PTO policy; can an employee just use PTO instead of filing for MA PFML?

Answer: We recommend that employers with unlimited PTO policies have a crystal clear policy on how unlimited PTO works with respect to leaves of absence. A strong policy should detail how after so many days of PTO for a medical-related or family-case related reason that the employee should initiate a claim for benefits otherwise, the time off will be unpaid.

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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.

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