United States: Hot Off The Presses: Massachusetts Releases An Early Draft Of Its Paid Family And Medical Leave Regulations

Seyfarth Synopsis: Yesterday, January 23, 2019, the Massachusetts Executive Office of Labor and Workforce Development (EOLWD) released a draft of the Paid Family and Medical Leave (PFML) regulations still under development for the purpose of early public input.  The EOLWD has scheduled public listening sessions throughout the Commonwealth over the next few weeks to collect feedback on the draft regulations (dates and locations are available on the Commonwealth's website here).  Proposed regulations will then be published for public comment and hearing by March 29, 2019, and final regulations will be promulgated by July 1, 2019.

As previously reported here, here, and here, under the PFML Law, Massachusetts workers will be eligible for up to 12 weeks of paid family leave and up to 20 weeks of paid medical leave, with a maximum of 26 total weeks, in the aggregate, per benefit year.  As we knew, after a 7-day waiting period, workers on paid leave will earn 80% of their wages up to 50% of the state average weekly wage, and then 50% of their wages above that amount, up to an $850/week cap (which may be adjusted annually).  Unlike the federal FMLA, the PFML Law will apply to all employers of one or more employees working in Massachusetts.  Job-protected, paid leave will be available to eligible new employees without any hours worked or service time requirements.  The PFML Law also will apply to certain former employees after separation and self-employed workers.

Although the draft regulations are a work-in-progress, they answer a number of open questions employers have had since the PFML Law was signed last June.  In particular, they shed new light on the contributions (i.e. payroll tax) employers will start paying on July 1, 2019, as well as the benefits claim process for workers, beginning January 1, 2021.  We highlight the key features and other questions answered and unanswered below.

Payroll Tax Contributions To Trust Fund

As previously reported, unless employers receive approval for a private plan (discussed below), the benefit will be paid by the Family and Employment Security Trust Fund, which will be funded by a payroll tax on employers and workers, beginning July 1, 2019.  The initial contribution rate will be 0.63% of the first $128,400 of an individual's annual earnings (this figure may be adjusted annually based on the contribution and base limit established by the federal Social Security Administration for the maximum amount of wages subject to the Social Security tax).

The 0.63% total contribution rate will be allocated between a family leave contribution rate and a medical leave contribution rate, based on the PFML Department's estimate of the anticipated costs of benefits and administration of the program.  On its website, the Department has announced that for employers with 25 or more employees, the initial split of the 0.63% contribution rate will be allocated as a 0.52% payroll deduction for the medical leave contribution and a 0.11% payroll deduction for the family leave contribution.  The Department may change the allocation of rates when it deems it necessary, but no more than once per year.

Although not mentioned in the statute or regulations, the Department's website states that the total contribution rate for employers with less than 25 employees will only be 0.42%.  The initial allocation for such employers will be 0.31% payroll deduction for the medical leave contribution and a 0.11% payroll deduction for the family leave contribution.

The cost may be shared between employer and employee at varying percentages, based on the type of leave and the size of the company.  Employers with less than 25 employees may deduct up to 100% of both family and medical contributions from an employee's wages.  Employers with 25 or more employees may deduct up to 100% of the family leave contribution from an employee's wages, and up to 40% of the medical leave contribution from an employee's wages.  In other words, employers with 25 or more employees must pay at least 60% of each employee's medical leave contribution.  The Department's website provides the following visual breakdown for employers with 25 or more employees here.  

Process For Remitting Contributions

The draft regulations clarify the process by which employers will make contributions to the PFML Trust Fund.  Following the end of each calendar quarter, all Massachusetts employers, self-employed individuals electing coverage, and other covered business entities must file earnings reports through the Massachusetts Department of Revenue's MassTax Connect system.

The quarterly report must contain the following information for each employee: name, social security number, and wages paid or other earnings during the quarter.  The report must contain the following information for each employer, self-employed individual, or covered business entity: the federal employer identification number and the identification number such employer, entity or self-employed individual is required to include on a withholding tax return filed with the Commonwealth.  Additionally, if an employer or covered business entity made payments to individuals for services during the calendar quarter that are required to be reported on IRS Form 1099-MISC (i.e. independent contractors), the report must also include the names and social security numbers of those individuals, and the amounts of such payments made.  Employers and covered business entities that do not have pre-existing accounts on the MassTax Connect system must register and establish an account in order to make required filings and remit the required contributions.

Based on the quarterly report, the Department will calculate the total quarterly contribution amount owed.  Employers, self-employed individuals electing coverage, and covered business entities must remit such contributions owed through the MassTax Connect system within 30 days after the end of the calendar quarter.

An employer or covered business entity who fails or refuses to make required contributions will be assessed 0.63 percent of its total annual payroll for each year it failed to comply, or fraction thereof, in addition to the total amount of benefits paid to covered individuals for whom it failed to make contributions.

Applications for Exemptions for Private Plans

According to the draft regulations, an employer or covered business entity may apply to the Department for approval to pay PFML through a private plan.  Applications for such exemptions from the public plan will be accepted by the Department on a rolling basis and approvals will be effective for one year.  Exemptions may be renewed annually.  An employer or covered business entity may apply for exemptions from medical leave coverage, family leave coverage, or both.

To be approved for an exemption, the private plan must confer all of the same rights, protections and benefits provided to employees under the PFML Law.  If a private plan meets or exceeds the requirements but is denied an exemption due to an apparent error, an employer or covered business entity may re-submit the same plan for supplementary review by the Department.

An employer must notify the Department in writing at least 30 days before implementing any proposed changes to the terms or conditions of an approved private plan.  The Department may withdraw approval for a private plan when the plan's terms or conditions have been changed or violated, including for a failure to pay benefits or a failure to pay such in a timely manner, misuse of private plan trust funds, or failure to comply with the PFML Law or regulations.

An employer or covered business entity who fails or refuses to make required contributions will be assessed 0.63 percent of its total annual payroll for each year it failed to comply, or fraction thereof, in addition to the total amount of benefits paid to covered individuals for whom it failed to make contributions.

Benefits Claim Process

The regulations confirm what the EOLWD recently clarified concerning the starting dates for eligible workers being able to file claims for PFML benefits with the Department, as follows:

  • On January 1, 2021, eligible workers can begin claiming benefits for bonding with a child or newborn; service-member related events; and dealing with the employee's own serious health condition; and
  • On July 1, 2021, eligible workers can begin claiming benefits to care for a family member with a serious health condition.

An individual filing a claim for benefits must provide the individual's employer with: (i) at least 30 days' notice of the anticipated start date of the leave, (ii) the anticipated length of the leave, (iii) the type of leave, and (iv) the expected return date.  If, for reasons beyond the individual's control, the individual cannot provide 30 days' notice, then the individual must provide notice as soon as practicable.

An individual must file a claim for PFML benefits with the Department using forms prescribed by the Department, although these forms have not been released to date.  The regulations provide the minimum information an individual's claim must contain, including without limitation, whether the leave is for family leave or medical leave, the expected leave duration, whether it is continuous or intermittent, the date notice was provided to the employer, any denied, granted, or pending leave requests for a qualifying reason from the employer during the benefit year, evidence of family relationship if the leave involves family leave, and a completed certification form.  If a claim is filed more than 90 calendar days after the start of leave, the covered individual may receive reduced benefits in the discretion of the Director.

The Department will notify the employer, if applicable, within 5 business days after an employee has filed a claim for PFML benefits, and will facilitate the disclosure and exchange of relevant information or records regarding the claim.  The Department's notice to an employer will contain: (i) the employee's name, (ii) the type of leave at issue, (iii) the expected duration of the leave, (iv) whether the request is for continuous or intermittent leave, and (v) any other information relevant to verification of the claim.

All benefits claims must be supported by a certification evidencing that the leave serves a covered purpose.  The draft regulations set forth the minimum information required for each type of leave certification.

Upon request, an employer will have 5 calendar days to provide the Department information or records relevant to a benefits claim, including without limitation, wages/earnings for the prior 12 months, a job description, whether the employee or covered individual currently works a full- or part-time schedule, weekly hours worked, prior requests/approvals for a qualifying reason, amount of PFML already taken during the benefit year, a description of its paid leave policies, and any other relevant information or records.

The Department will notify applicants of their eligibility or ineligibility within 14 calendar days of receiving a claim.  The Department will commence payment of leave benefits within 14 calendar days after the eligibility determination (unless that determination occurs more than 14 days before the onset of eligibility, in which case payment will commence as soon as eligibility begins).  The Department will provide contemporaneous notice to the individual and the employer of the approval or denial of a benefits claim.

Other Noteworthy Terms While On Approved Leave

Nothing in the PFML Law or regulations will limit an employer's or covered business entity's ability to communicate with an employee or covered individual who is approved for leave benefits.

An employee or covered individual who has been approved for leave benefits must still comply with any attendance and call-in procedures of the employer or covered business entity.

An employee or covered individual approved for intermittent leave must work with the employer or covered business entity to make an effort to take leave so as not to unduly disrupt the employer's or entity's operation.

Following an approval, if there is a change in relevant circumstances that would justify an extension, reduction, or other modification of the period of leave or amount of benefits, both the employee and the employer have an affirmative obligation to inform the Department using forms to be prescribed.

Other Questions Answered

The current draft of the regulations does not alter the following provisions of the PFML Law, some of which were being targeted for possible modification:

  • "Serious health condition" remains defined more broadly under the PFML Law and regulations than under the federal FMLA, defined here as an illness, injury, impairment, or physical or mental condition that involves (i) inpatient care in a hospital, hospice, or residential medical facility; or (ii) continuing treatment by a health care provider.
  • The taking of family or medical leave shall not affect an employee's right to accrue vacation time, sick leave, bonuses, advancement, seniority, length of service credit, or other employment benefits, plans or programs.
  • During the duration of leave, the employer shall continue to provide for and contribute to the employee's employer-provided health insurance benefits, if any, at the level and under the conditions coverage would have been provided if the employee had continued working continuously for the duration of such leave.
  • Intermittent leave or reduced schedule leave, paid on a prorated basis, may be taken "when medically necessary" for a medical leave for the worker's own serious health condition, for a family leave to care for a family member with a serious health condition, or for injured service member family leave.  Qualifying exigency family leave may also be taken intermittently or on a reduced schedule.  However, bonding leave for a new baby may not be taken intermittently or on a reduced schedule unless the employee and the employer agree otherwise.
  • An employer must restore an employee who has taken family or medical leave to the employee's previous position or to "an equivalent position" with the same status, pay, employment benefits, length of service credit, and seniority as of the date of leave (except in the event that other employees of equal length of service credit and status in the same or equivalent positions have been laid off due to economic conditions or other changes in operating conditions).
  • The weekly benefit amount shall be reduced by the amount of wages or wage replacement a worker receives for that period under: any government program or law, including workers' compensation (other than for permanent partial disability incurred prior to the leave claim); other state or federal temporary or permanent disability benefits law; or an employer's permanent disability policy or program.  The weekly benefit amount shall not be reduced by the amount of wage replacement received while on leave under an employer's temporary disability policy or program, or an employer's paid family or medical leave policy, unless the aggregate amount an employee would receive would exceed the employee's average weekly wage.
  • The law prohibits retaliation against employees for exercising their rights under this law, and any negative change in status or adverse employment action during a leave or within six months following the leave will create a rebuttable presumption of retaliation, which the employer can rebut only with clear and convincing evidence that such action was not retaliation and was based on an independent justification.
  • The law provides employees a private right of action with a 3-year statute of limitations for violation of the job restoration, benefits accrual and continuation, and anti-retaliation provisions.  A court may award a prevailing employee job reinstatement, benefits reinstatement, injunctive relief, compensation for 3 times any lost wages, benefits and other remuneration and the interest thereon, and reasonable costs and attorneys' fees.

Open Questions Remaining

  • By what date must employers post the required PFML notice?  The statute was amended to remove a July 1, 2019 effective date for this provision, but the new date has not been announced.
  • The draft regulations do not provide any details regarding the application form or specific process for an employer to apply for an exemption for a private plan.
  • If the first quarterly payroll tax is due July 1, 2019, how can employers who intend to apply for a private plan exemption avoid paying the July 1 payroll tax in the interim?
  • Can a new employee who is otherwise eligible for PFML benefits immediately commence an extended leave for a qualifying reason even if only employed for a short period (e.g. after one day of employment)?  This appears to be the case.
  • Must a private plan create a private trust fund into which contributions are made and from which PFML benefits are paid?
  • The draft regulations do not create a mechanism for employers to charge employees their share of the cost for health insurance continuation during leave.
  • While the draft regulations address the reduction of PFML benefits to offset certain alternative wage replacement from other sources, they do not reference or clarify the PFML Law's provision that the weekly benefit amount can be reduced by the amount of wage replacement received under a short-term disability policy to the extent the aggregate amount an employee would receive would exceed the employee's average weekly wage.

The draft regulations and the Department's FAQs can be found here.  We will continue to provide updates as to any significant events that occur with respect to the PFML Law or regulations.

Be on the lookout for an invite for our upcoming webinar on Tuesday, February 5, 2019 at 1:00 p.m. ET on this topic, or you can register here

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions