GOOD NEWS FOR MASSACHUSETTS EMPLOYERS – A DELAY OF PENDING DEADLINES (AND A WORD ON TAXES)

Posted On May 02, 2019  

by Marti Cardi, Esq. - Vice President, Product Compliance

May 02, 2019

 

That’s right, yet another Massachusetts paid family and medical leave update! Today’s news will be welcomed by Massachusetts employers, especially those considering whether to adopt a private plan rather than use the state program.  Let’s be honest, though – it’s only good news because it backs off from some of the imminent deadlines that were going to be extremely difficult for employers to meet.

Here are the updates, quoted directly (in italics below) from the DFML announcements available on its website. See our comments and analysis below each DFML update.

Exemption Deadline Extended for Quarter 1
The Department’s current guidance requires that exemptions for private plans must be approved in the quarter prior to the quarter in which they will go into effect. For Quarter 1 only [July-September 2019], however, the deadline to file for a private plan exemption that will be in effect for first quarter contributions for paid family and medical leave has been moved from June 30th to September 20th, 2019. This will allow employers additional time to contemplate private plan options. Going forward, the Department will continue to accept applications on a rolling basis but applications must be approved in the quarter prior to the quarter in which they go into effect.

Please note that contributions to PFML begin on July 1, 2019 and the September 20, 2019 extension of the exemption application deadline only impacts the contribution requirements if the exemption request is approved. If the exemption request is denied the impacted business will be responsible for remitting the full contribution amount from July 1, 2019 forward. Therefore, DFML recommends that businesses in the Commonwealth consult with their tax advisors as to the implications associated with applying for a private plan exemption that may or may not be approved.

Employer Notice to Employees
The deadline for employer notice to employees has been extended from May 31 to June 30, 2019. The 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.

Please Note: The Department of Family and Medical Leave is continuing to accept comment on draft regulations regarding paid family and medical leave and is planning to host two additional listening sessions in May which will be announced shortly.

What does this mean for employers?

Under the prior rule, if a plan was not approved by June 30, the employer would owe the employer and employee contributions to the Commonwealth for all of the quarter (July-September 2019); and this amount could not be recovered even if a private plan was later approved. Now if your private plan is approved by September 20, 2019, you will not have to pay over the July-September 2019 premium contributions to the Commonwealth but rather can keep those for funding your own private plan benefits payments.

Here is a quick rundown of upcoming dates and obligations:

  • All employers will continue to have reporting obligations for every quarter, including Q1 of the program
    (July-September 2019). The DFML has stated it will issue more reporting guidelines prior to July 1
    so that employers know what data they need to be ready to provide after the close of Q1, probably
    in October 2019.
  • All employers will need to post the required notice for workers in the workplace.  See our prior post
    here for more details
  • Individual notices. All employers will need to send individual notices to every employee and
    contractor and receive an acknowledgement or refusal to acknowledge signed by the worker, but the
    deadline has been moved to June 30, 2019.  More details are available
    here and here.
  • Applications for private plan approval can be filed at any time after April 29, 2019. However, the
    application will need to include a copy of the private plan, a copy of the required bond (see our
    blog post
    here), and if Matrix is applying for your company, a signed authorization for Matrix to
    act on your company’s behalf.

A Word on Taxation Issues

On May 1 the DFML also issued a notice that addresses the taxation question – sort of.  We have received several questions about tax treatment of premiums paid by employees and benefits.  Matrix cannot answer those questions, as we are not tax advisors.  Apparently, the Commonwealth of Massachusetts isn’t either.  Here is their notice:

Tax Information
The tax treatment of PFML contributions for both state and federal purposes is governed by federal tax law. The Commonwealth has requested guidance from the Internal Revenue Service on this question and others related to the tax implications of PFML contributions and benefits. 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 Department of Family and Medical Leave anticipates that the IRS will conclude that employee contributions should be withheld from after-tax wages. A definitive rule for proper tax treatment of contributions will be available once IRS guidance is issued.


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 private plan option.  These include developing a sample private plan for use by our clients, and an employer guide to the private plan decision and application process.  If your company is interested in the private plan option for Massachusetts PFML, contact your Matrix/Reliance Standard account manager or send us a message at ping@matrixcos.comAnd stay tuned here for more information about Massachusetts PFML as it develops – we’ll bring it to you daily, if necessary!

 

MASSACHUSETTS ANNOUNCES PFML PRIVATE PLAN BOND REQUIREMENTS

Posted On April 30, 2019  

by Marti Cardi, Esq. - Vice President, Product Compliance

April 30, 2019

 

It seems like just yesterday (it was!) that we reported on significant new information and resources from the Massachusetts Department of Family and Medical Leave that were released on Friday.  No sooner was our article posted when more news came from DFML:  Details on the private plan bond requirement.

The new information is quoted below in full, and can be found on the DFML website here.

Bond requirements

In addition to the leave benefits explained below, self-insured plans must include the following bond amounts to be eligible for exemptions.

For every 25 employees covered by a business, DFML requires a bond value of:

    • $19,000 for qualifying family leave plans
    • $51,000 for qualifying medical leave plans
    • $70,000 for qualifying plans for both family and medical

Examples

Family leave plans

    • You have 12 employees and you’re applying for an exemption from family leave.
      Your required bond value is $19,000.
    • You have 85 employees and you’re applying for an exemption from family leave.
      Your required bond value is $57,000.

Medical leave plans

    • You have 12 employees and you’re applying for an exemption from medical leave.
      Your required bond value is $51,000.
    • You have 85 employees and you’re applying for an exemption from medical leave.
      Your required bond value is $153,000.

Both family and medical leave plans

    • You have 12 employees and you’re applying for an exemption from both family and
      medical leave. Your required bond value is $70,000.
    • You have 85 employees and you’re applying for an exemption from both family and
      medical leave. Your required bond value is $210,000.

 

If your company is interested in the private plan option for Massachusetts PFML, contact your Matrix/Reliance Standard account manager or send us a message at ping@matrixcos.comAnd stay tuned here for more information about Massachusetts PFML as it develops – we’ll bring it to you daily, if necessary!

HOT OFF THE PRESSES: YET ANOTHER MASS-IVE UPDATE!

Posted On April 29, 2019  

by Marti Cardi, Esq. - Vice President, Product Compliance

April 29, 2019

 

I had just exhaled after presenting our Massachusetts Paid Family and Medical Leave (PFML) webinars on April 23-24when the Massachusetts Department of Family and Medical Leave unleashed a barrage of new information, guidance, and resources.  You may have heard my plaintive cry, “Make it stop!”

But it hasn’t stopped and so here we are with more updates for you.  If you
missed our webinars, you can get up to speed from our prior blog post,
which includes a link to our webinar deck.

CLICK ON MR. RADAR TO VIEW APRIL 24, 2019 BLOG

Counting workers for the under-25 exemption from employer premiums

Employers using the public plan to provide PFML benefits and with fewer than 25 Massachusetts covered workers are exempt from
paying the employer share of medical leave premiums to the Commonwealth’s trust fund.  If your workforce is near this number,
it is important to know how to count your workers for this exemption. The draft regulations (section xx.05) direct you to count the number of employees on the payroll “during each pay period and dividing by the number of pay periods” but do not state over what period of time to do this averaging.

New materials released by the Department of Family and Medical Leave (DFML) on Friday now clarify that you consider your number of workers per pay period to get an annual average, based on the prior calendar year for the current calendar year.  And remember, covered workers for this count includes both regular employees and 1099-MISC workers if those contractors constitute more than 50% of your total workforce.

The new posting from the DFML can be found at https://www.mass.gov/info-details/counting-the-covered-individuals-in-your-workforce-under-the-pfml-law.

Private plan exemptions

Also in the new materials released by DFML is an entire page with ancillary materials devoted to the private plan exemption, whereby employers can apply for approval of their own paid medical and/or family leave plan rather than having employee leaves administered by DFML. The new resources include a walk-through of the application process complete with a video demonstration of an online application.  Important points to note:

  • You will need to log on to MassTaxConnect to start the application process. If you don’t already have an account,
    there is a link for registering.
  • After providing basic company and contact information, you will answer a series of yes/no questions.  The
    questions are designed to determine whether your plan is compliant with the PFML requirements.
  • Next is an opportunity to upload any supporting documents.  Interestingly, the tutorial and the online application
    (to the extent I could read it!) does not specifically require a copy of your plan but certainly the plan itself would
    constitute supporting materials.  The application website allows you to upload more than one document so
    if your plan is contained in multiple documents you have the ability to include all. If you are having a TPA
    such as Matrix submit the application for you, a signed statement providing the necessary authority would
    be important to include.
  • After completing your application, you will be notified within 1-2 business days of the status of your plan.  If
    the plan is not approved, you will have a chance to request further review by the DFML.

The new materials can be accessed here:  https://www.mass.gov/info-details/exemptions-from-paid-family-and-medical-leave-for-private-plans

Employer Notices to Employees

With the upcoming employer notice requirements (posters and individual worker notices) came a lot of questions.
To recap:

  • Employers must post a general notice of employee and contractor rights and responsibilities under the PFML
    law in the workplace, meeting certain language requirements.  This posting should be done immediately.
  • Employers must provide individual notices to employees and contract workers in their primary language and
    receive an acknowledgment from each worker by May 31, 2019.  That last part is a new clarification – see
    the discussion below.
  • We provided more detail on these notices in our blog post here, including a link to our webinar deck.

Here’s what we have now learned from the DFML, via a response from the Director to my email questions:

  • The May 31 deadline applies both to giving the notice AND receiving the acknowledgements.  The PFML statute
    doesn’t address employers’ notice obligations to current individual employees, but the DFML has now set the
    May 31 deadline for employers to both provide the notice and receive the acknowledgments (or refusals) from
    existing employees.  This is 30 days in advance of when withholding from worker paychecks will begin on
    July 1 (if the employer is not covering the employee share of PFML premium contributions).
  • That acknowledgement form and the odd refusal to acknowledge. The statute requires employers to provide
    individual notices and an opportunity for workers to either acknowledge receipt of the notice or decline
    to acknowledge receipt in writing.  The DFML does not plan to provide a form for use if the employee refuses
    to acknowledge receipt of the notice.   Here is what came out of my brain to fill this requirement.
    (Note this is my best guess and I cannot promise whether the DFML would find it sufficient):


EMPLOYEE STATEMENT DECLINING TO ACKNOWLEDGE RECEIPT OF NOTICE
I decline to acknowledge receipt of the Employer Notice to Employee relating to my Rights and
Obligations under the Massachusetts Paid Family and Medical Leave Law, M.G.L. c.175M.
I understand my employer will retain a copy of this statement.

__________________________________________________________________________________________

Signature

__________________________________________________________________________________________

Print Name

__________________________________________________________________________________________

Date


  • Evidence of Employer Compliance.  The DFML declined to provide any guidance regarding what will constitute
    sufficient evidence that you provided the correct notice and opportunity to acknowledge or decline if the
    employee refuses to do either.  My suggestion is to use a reasonable means that is designed to get actual
    notice to each employee individually.   Consider:

    • Regular mail to the employee’s current home address with a log to substantiate the mailings (as we know,
      recipients often refuse to accept certified delivery)
    • Electronic delivery to the employee’s known functioning email with a means to produce a copy of the email
      sent (again, employees may decline to provide a read receipt)
    • Hand delivery to the employee by someone who keeps a log of date, time, and other facts of each delivery

Don’t just leave a stack of the forms in the lunchroom or tell all employees generally to check it out on your intranet.

  • Individual notice in employee’s primary language.  The DFML says this is a requirement even if it has not yet
    provided a translation in the language you need for an employee.  At the time of our webinars, the notices to
    W-2 employees and 1099-MISC workers were available in 5 languages plus English.  However, as of Friday the
    notices are now available in 13 languages on the DFML website here.
  • Compliance with posting notification for teleworkers.  There is no provision in the PFML statute for electronic
    “posting” as there is for electronic individual notices.  I asked the DFML, could the employer put the poster on its
    intranet accessible to employees, or email it to remote workers?  The DFML agreed these are reasonable
    options. Consistency with your process for other electronic employee notifications would be a good thing as
    long as it is an effective means of giving notice.
  • Changing your decision whether to withhold employee premium contributions from paychecks.  If an
    employer states on the notice form that it will not withhold contributions from employee paychecks, the
    DFML says the employer can change this decision later.  But, plan to provide a new individual notice to
    employees and contractors, including obtaining those acknowledgements or refusals.  Thirty days’ advance
    notice of the change sounds like a good plan to me, although nothing in the law requires that.  And the
    same applies if you initially withhold employee contributions and then decide you will no longer do so.

Matrix is on it!  Stay tuned to this blog for all the news on Massachusetts paid family and medical leave developments other in other states. And when time permits, we’ll cover some non-PFML issues, too!

MORE MASS-IVE DEVELOPMENTS THAT YOU NEED TO KNOW (AND DO) NOW

Posted On April 24, 2019  

by Marti Cardi, Esq. - Vice President, Product Compliance

April 24, 2019

 

As you well know, employees and employers are responsible for contributions to the Massachusetts Family and Employment Security Trust Fund starting July 1, 2019.  On April 23 and 24, Yours Truly presented webinars on the current status of Massachusetts paid family and medical leave and what you need to know, and do, now to get ready. Short on time? Access the webinar PowerPoint deck by clicking Mr. Radar; it is chock full of timely information and important links to the Department of Family and Medical Leave (DFML) website resources.  An audio recording of the webinar will be available soon – just watch this blog for a link when it is ready.

 

CLICK MR. RADAR FOR THE WEBINAR CONTENT!

 

 

In the meantime, here are a couple of crucial pointers for your immediate action:

  • The DFML has released forms for the required general notice to workers about the PFML and their rights.
    Post these notices now, in English and in each language which is the primary language for 5 or more
    individuals in your workplace.  DFML has made the poster available in 13 languages.  Access the posters
    on the DFML website
    here.
  • Individual notices. You must send specific notices to employees and contract workers by May 31, 2019,
    in workers’ primary language.  The notices require you to advise your workers of various information,
    including whether you will be withholding the employee share of the premium contributions from their
    paychecks and, if so, in what percentage amounts; and whether you presently have a private plan
    approved by the Commonwealth for the medical leave, family leave, or both.  Then, you must get a
    signed statement from each employee and contract worker either acknowledging receipt of the notice
    or declining to acknowledge receipt.  If the employee refuses to sign either, you must be able to show
    that you actually gave the notice and an opportunity to sign either statement to the employee.
    The DFML has provided the notices in 5 languages so far, that can be downloaded here. 

Check out our webinar deck at the link above for a lot more MA PFML information, including things to consider when deciding whether to adopt a private plan rather than provide the required benefits through the Commonwealth’s program, and a list of action items. 

For more background info on MA PFML you can type “Massachusetts” in the search box of this blog to find all of our previous MA PFML blog posts. 

MASS-IVE DEVELOPMENTS IN PAID FAMILY MEDICAL LEAVE LAW

Posted On March 21, 2019  

by Marti Cardi, Esq. - Vice President, Product Compliance

& Gail Cohen, Esq. - Director, Employment Law And Compliance

March 21, 2019

 

Big dates are ahead in Massachusetts relating to its paid family and medical leave program.  The Department of Family and Medical Leave (DFML) has announced two key developments:

Massachusetts PFML regulations. The second draft of the PFML regulations will be issued on March 29.  You may recall that the first draft was issued on January 23, 2019.  These were a start but many key topics were not addressed.  The DFML conducted over 10 listening sessions around the state, soliciting comments from attendees on the draft regulations.  The DFML also accepted written comments through March 13.

Now the DFML has announced that the next draft of the regulations will be published on March 29, followed by another public comment period. We expect these to be near final due to the extensive outreach the DFML conducted to gather input. Final regulations will be published and effective no later than July 1, 2019.

Private plan applications.  Employers can begin filing private plan applications on April 29, 2019.  The only detail we have been able to find so far is that applications may be filed through MassTaxConnect We have submitted over 20 questions to the DFML to identify information that Matrix and employers will need to know in deciding whether to file for a private plan.  These address application details, approval process and turnaround time, details on the bond requirement, and much more.

Based on our prior communications with key personnel at the DFML, we anticipate that the application process will be more employer-friendly than our experience in Washington.  In fact, there are indications that, unlike Washington State, employers may be able to submit existing plans that meet or exceed the Commonwealth’s requirements rather than designing and submitting a new, Massachusetts-specific plan.

We are currently developing templates for employer-sponsored private plans to satisfy the medical leave benefit, the family leave benefit or both requirements, and will make these available to our Massachusetts clients as soon as they are completely vetted.

Need to catch up? You can read our prior review of the Massachusetts PFML here. Below is a timeline of the Massachusetts PFML journey from inception to launch, as currently represented by DFML.

Matrix has you covered! We’ve been watching for these developments and know employers have many questions that – we are hopeful – will be answered in the next few weeks.  In anticipation, we have scheduled webinars to be held on Tuesday, April 23 and Wednesday, April 24. Both webinars begin at 2:00 PM Eastern time. Click the day you prefer to attend and REGISTER today!

 

 

 

 

 

 

We can help!  At Matrix Absence Management, we administer FMLA, state leaves, the ADA, and related company policies for employers every day, day in and day out.  If you would like more information contact us at ping@matrix.com or through your Account Manager.