10 Things Employers Need to Know about Paid Family/Medical Leave
The Baker Administration last week published draft regulations for implementation of paid family and medical leave in Massachusetts.
Paid family and medical leave were approved by the Legislature and signed by Governor Charlie Baker last year as part of the so-called Grand Bargain between the advocacy group Raise Up Massachusetts and the business community. The newly published regulations represent the “rules of the road” that employers and workers will follow as the law takes effect beginning in July.
AIM has been working for months with the Executive Office of Workforce Development to address employer concerns about what will be a major new benefit program. More than 700 AIM members with an interest in paid family and medical leave are currently reviewing the draft regulations and formulating comments.
The state is conduct seven listening sessions though February 19 to provide employers and others an opportunity to comment on the draft regulations.
In the meantime, here are 10 facts that employers need to know about paid family and medical leave as outlined in the draft regulations:
- When it begins
On July 1, employers and/or their workers must begin to pay 0.63 percent of all wages or other qualifying earnings or payments into the Family and Employment Security Trust Fund. Employees may take family or medical leave beginning January 1, 2021.
- Who pays?
The employer is required to pay at least 60 percent of the medical leave contribution required for each employee. The employer is required to pay none of the contribution for family leave. Employers may, of course, pay a higher percentage for each category of leave or elect to pay the entire contribution for each employee. The employer may deduct the medical leave and family leave contributions directly from wages or other qualifying payments made to the employee or individual. Companies employing an average of fewer than 25 employees in Massachusetts will not be required to pay the employer portion of premiums for either family or medical leave.
- Surprise contribution for employees?
Employers who elect to pay less than the entire family and medical leave contribution will need to communicate to employees the news that an additional several hundred dollars will be deducted from their paychecks each year. Few employees realize they may be required to pay into the family and medical leave system.
- How much leave?
Beginning January 1, 2021, covered individuals are eligible for up to 26 total weeks, in the aggregate, of family and medical leave in a benefit year.
Beginning January 1, 2021, covered individuals are eligible for up to 12 weeks of family leave in a benefit year for the birth, adoption, or foster care placement of a child, or because of a qualifying exigency arising out of the fact that a family member is on active duty or has been notified of an impending call to active duty in the Armed Forces.
Beginning January 1, 2021, covered individuals are eligible for up to 26 weeks of family leave in a benefit year to care for a family member who is a covered service member.
Beginning January 1, 2021, covered individuals are eligible for up to 20 weeks of medical leave in a benefit year if they have a serious health condition that incapacitates them from work.
Beginning July 1, 2021, covered individuals are eligible for up to 12 weeks of family leave to care for a family member with a serious health condition.
- The pay in paid leave
An individual’s paid family or medical leave weekly benefit amount is calculated as follows: (a) The portion of an individual’s average weekly wage that is equal to, or less than, 50 percent of the state average weekly wage is replaced at a rate of 80 percent; the portion of an individual’s average weekly wage that is more than 50 percent of the state average weekly wage is replaced at a rate of 50 per cent. The initial maximum weekly benefit amount is $850. Thereafter, the maximum weekly benefit amount for any individual will be 64 percent of the state average weekly wage.
- We are family
The regulations define a family member as a spouse, domestic partner, child, parent or parent of a spouse or domestic partner of the covered individual; a person who stood in loco parentis to the covered individual when the covered individual was a minor child; or a grandchild, grandparent or sibling of the covered individual.
- Intermittent leave
An employee may take family or medical leave on an intermittent basis for family leave to bond with a child during the first 12 months after the child’s birth, adoption, or foster care placement, but only if the employer and employee agree to it. Employees may also take intermittent family leave if medically necessary to care for a family member’s serious health condition; to care for a family member who is a covered service member, or for or the employee’s own serious health condition.
An employer with a work force that is more than 50 percent self-employed individuals whose compensation is recorded on Internal Revenue Service form 1099-MISC shall treat those self-employed individuals as employees for the purposes of determining a company’s number of employees under the paid family and medical leave law.
An employer with an existing, private benefit plan that confers the same rights, protections and benefits provided under the state program make apply for an exemption from the public plan. An employer may apply for exemptions from medical leave coverage, family leave coverage, or both.
- Self-employed people
A self-employed individual may elect coverage and become a covered individual for an initial period of not less than three years. A self-employed individual who elects coverage is responsible for the full contribution amount, based on that individual’s income from self-employment. If a self-employed individual elects coverage and fails to remit contributions owed for at least three years, the self-employed individual will be disqualified from electing coverage thereafter.
Want regular updates on paid family and medical leave in Massachusetts? Please contact Brad MacDougall at firstname.lastname@example.org.