On Friday, May 8, 2020, the Massachusetts Department of Family and Medical Leave (DFML) published proposed amendments to the regulations governing the Paid Family and Medical Leave (PFML) Law. The proposed amendments, available here, codify prior DFML guidance regarding covered contract workers, clarify the requirements for private plan exemptions, provide further information regarding applications for benefits and reductions to benefit amounts, and add definitions for a number of previously undefined terms. The DFML is in the process of establishing dates for public hearings, which may be held virtually due to the COVID-19 public health emergency. The DFML will provide information regarding the comment period for the proposed amendments.
Properly Classified Independent Contractors Are Not Covered Contract Workers for PFML Purposes
Perhaps most importantly, the proposed amendments codify previous informal guidance from the DFML regarding contract workers. The amendments specifically provide that self-employed individuals or contract workers properly classified in accordance with the independent contractor test in the unemployment statute are not considered part of an employer's workforce. As a result, the DFML amended the definition of "covered contract worker" to include the following criteria: the worker (i) performs services as an individual entity in Massachusetts, (ii) resides in Massachusetts, and (iii) is not classified as an independent contractor pursuant to the unemployment statute (M.G.L. c. 151A, § 2).
Private Plan Exemptions and Requirements
The proposed amendments provide some clarity regarding applications for exemptions through a private plan. First, they clarify that while employers may apply for an exemption from medical leave, family leave, or both, they may not apply for an exemption that only covers a portion of their workforce. All covered workers must be covered by the private plan in order to be exempted. Moreover, the amendments also codify that employers with an approved plan are exempt from both remitting contributions on behalf of covered workers and from the quarterly filing requirements.
The proposed amendments also clarify the procedure for appealing the denial of a private plan exemption application. Appeals must be submitted through MassTaxConnect and must be submitted before the last day of the quarter prior to the effective date of the request for an exemption.
In addition, the proposed amendments include three additional requirements for private plans. First, they must include an appeals process with the private plan administrator before the individual can exercise his or her right of appeal with the DFML. The plan must give the individual at least ten calendar days to submit an appeal, and must extend that period if the individual can establish that circumstances outside of his or her control prevented the filing of the appeal within the proscribed period. Second, the plan must provide notice to covered individuals as part of any determination under the plan of their rights pursuant to the PFML Law. Finally, the proposed regulations provide that employers must calculate the weekly benefit amount provided to covered individuals under their private plan based on the wages earned at the time of an application for benefits.
Applications for Benefits
The proposed amendments further clarify how covered individuals will apply for benefits through the DFML. First, covered individuals must provide notice of their need for leave to their employer prior to applying for benefits with the Commonwealth. Proof of this notice must be included in applications for benefits. Covered individuals should submit applications for benefits at least 30 days in advance of the anticipated start of leave, but no more than 60 days in advance.
The proposed amendments also provide that employers may submit applications for benefits on behalf of covered individuals. Please note that this is an entirely new development. It appears to permit employers to submit such claims for an employee's qualifying leave even when the employee does not desire to do so. This should help employers with their own paid family or medical leave policies to prevent abuse and force a State contribution to offset the company's paid leave benefit. The leave would also run concurrently regardless according to the new definition of "Job Protected Leave" described below.
Reductions to Benefits
The PFML regulations have always provided that benefits will be reduced by any wages or wage replacement that the individual receives from any government program or law (such as unemployment benefits) or any state or federal disability benefits law. The proposed amendments provide that benefits will also be reduced by any benefits received from an employer through an approved, exempted private plan or any wages received from "another employer or covered business entity or through self-employment." Benefits may also be reduced if an individual has an outstanding tax obligation or obligation for child support.
Employers Cannot Retroactively Collect Contributions From Covered Individuals
The amendments provide that any employer or covered entity that failed to properly assess the allowable deduction from a covered individual's wages may not seek repayment from the covered individual. Thus, any employers who have not collected the allowable deductions from covered workers must cover those contributions on their own.
Added Definitions and Clarifications
The proposed amendments add definitions and clarifications to the following terms:
- Accrued Paid Leave - This definition was added to clarify that "accrued paid leave" for PFML purposes includes sick leave, annual leave, vacation leave, personal leave, compensatory leave, or paid time off.
- Active Duty
- Application for Benefits
- Complete Application
- Former Member of the Armed Forces
- Good Cause - The regulations provide that the DFML may waive penalties or allow extensions in certain circumstances if there is "good cause," which is now defined as "a failure to comply with a requirement . . . due to circumstances beyond the party's control."
- Job Protected Leave - This definition provides that, regardless of whether an individual applies for benefits with the Commonwealth, any leave that is associated with a "qualifying reason" under the PFML Law, will run concurrently with the leave period provided by the PFML Law.
- Private Plan Administrator
The proposed amendments also clarify that "substance abuse disorders" are not considered a serious health condition for purposes of paid medical leave unless they require inpatient hospital care or complications develop.
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.