Massachusetts Announces Likely 3-Month Delay in Collecting PFML Premium Contributions

By Marti Cardi, Vice President Product Compliance

June 12, 2019

 

Vast amounts of uncertainty and unanswered questions surround the Massachusetts Paid Family and Medical Leave program.  The law currently provides that employers participating in the plan administered by the Massachusetts Department of Family and Medical Leave (DFML) must start withholding contributions from employee paychecks as of July 1, 2019.

On June 11, Massachusetts Governor Baker and leaders of the Massachusetts house and senate announced an agreement to postpone the start of PFML contributions for 3 months, until October 1, 2019.  The change must be accomplished via an amendment to the PFML statute but all parties are on board to get this done.   This is welcome news for employers as they will have more time to get payroll arrangements perfected, decide whether to apply for an exemption from state coverage with a private plan, and otherwise implement.

The anticipated amendment to the PFML statute may also include technical changes to clarify program design.  Clarifications are expected to include amendments relating to intermittent leave, the definition of “serious health condition,” and closer alignment of the Massachusetts PFML law with the federal Family and Medical Leave Act.  (See aimblog published by the Associated Industries of Massachusetts, which was instrumental in advocating for the delay.)

In order to maintain the level of funding for the program that would be achieved if contributions commenced July 1, the combined employer/employee contribution of 0.63% of an employee’s wages will be increased to 0.75%, or from $872 to $1038 per year for an employee earning the state average weekly wage.  It is not yet known how long this increase will stay in effect.  At present, the law requires the DFML to adjust the contribution rate annually, depending on various economic factors, starting October 1, 2021, effective the next January 1.

Massachusetts PFML Reminders

Massachusetts employees and other covered workers can start receiving paid leave benefits January 1, 2021.  The law provides for annual paid leave up to 20 weeks due to an employee’s serious health condition, 12 weeks for family leave purposes (bonding, caring for a family member with a serious health condition, and military exigencies), and 26 weeks to care for a family member with a service-related illness or injury.  There is a 26-week cap on total annual leave benefits.

Over time we have published several articles on Massachusetts PFML.  You can take a look back at our overall summary and periodic developments by entering “Massachusetts” in the search box of this page.

Other Massachusetts PFML News

If an employer chooses to comply with the PFML through a private plan, the law requires the employer to either post a bond or provide benefits through an approved insurance company.  The DFML expects to publish an approved bond rom and instructions any day now.  Watch this blog and the DFML website for that development.

Also, the DFML is constantly updating its website with new information, so a periodic check-in just to see what’s new is worthwhile.  Of course, we will report any major developments here.

MATRIX CAN HELP! 

In addition to keeping you abreast of developments through these blog posts, Matrix is taking other steps to assist employers interested in the Massachusetts and Washington private plan options.  These include developing a sample private plan for use by our clients and a guide for our account managers to assist you with the private plan decision and application process.

If your company is interested in the private plan option for Massachusetts or Washington PFML, contact your Matrix/Reliance Standard account manager or send us a message at ping@matrixcos.comAnd stay tuned here for more PFML information as it develops!

 

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