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Summary:

On June 28, 2018, Massachusetts Governor Charlie Baker signed into law House Bill 4640, which creates a state paid family and medical leave program.  We are awaiting further guidance on the new law, however here is what we know today:

 

Who does the law apply to?

All employers with at least one employee working in Massachusetts.

 

Who is eligible?

All Massachusetts employees will be eligible, regardless of employer size or length of service.

 

How will the benefit be funded?

  • Leave will be administered by the state and will be funded through a 0.63% payroll tax, which will be split between the employer and employee.  The state will open a trust fund and will be responsible for paying out benefits.
  • Employers may apply to the department of family and medical leave for approval to meet their obligations through a private plan or through self-insurance.
  • Employers with more than 25 employees will be required to make the full 0.63% contribution to the trust, but will be able to deduct up to 40% for medical leave and up to 100% for family leave from employee wages.
  • Employers will fewer than 25 employees will not have to contribute.

 

When should employers begin contributions?

Employers should begin contributing to the Family and Employment Security Trust Fund on July 1, 2019.

 

When may employees begin taking leave?

Eligible employees will be able to take leave beginning in 2021.

 

What benefits will employees on leave receive?

  • Massachusetts workers will be entitled to paid leave for the following:
    • 12 weeks to care for a sick family member, including a parent, child, domestic partner, grandparent, grandchild, sibling, or the parents of a spouse or domestic partner;
    • 12 weeks to care for a newborn or for a child after placement for adoption or foster care;
    • 12 weeks because of any qualifying exigency arising out of the fact that a family member is on active duty or has been notified of an impending call or order to active duty in the Armed Forces;
    • 26 weeks in order to care for a family member who is a covered servicemember;
    • 20 weeks to care for their own serious health condition.
  • Paid benefits will consist of 80% of wages capped at 50% of the state average weekly wage and then 50% of wages beyond that amount (capped at $850 per week, adjusted annually for inflation).
  • Employees are entitled to continued health coverage and the same employer contributions toward coverage during the leave period.
  • Employers should take notice that upon return, employees must be restored to their previous or an equivalent position.  In addition, employees may not be retaliated against for taking leave.  Any adverse employment decisions made within 6 months of a leave will be presumed to be retaliatory action (though there are some exceptions surrounding company lay offs).

 

Employer Action Items/Due Dates:

  • Determine if your company will use the state program, or apply to use equivalent private insurance or self-insurance.
  • Update any internal leave policies and employee handbooks with assistance from employment law counsel, as needed.
  • Review payroll practices to ensure any employee deductions are set up properly.
  • March 31, 2019: The Department of Family and Medical Leave will publish proposed regulations that will provide more detail on the new program.
  • July 1, 2019: Employers should begin collection/payment of the 0.63% tax to the Family and Employment Security Trust Fund.
  • July 1, 2019: Employers must post notice and begin providing written notice to employees.
    • Provide a separate written notice of the benefit to new hires within 30 days (when it becomes available) and collect signed employee acknowledgements of the notice.
  • January 1, 2021: Begin paid leave benefits for employees.

 

Additional Resources:

 

The information and materials on this blog are provided for informational purposes only and are not intended to constitute legal or tax advice. Information provided in this blog may not reflect the most current legal developments and may vary by jurisdiction. The content on this blog is for general informational purposes only and does not apply to any particular facts or circumstances. The use of this blog does not in any way establish an attorney-client relationship, nor should any such relationship be implied, and the contents do not constitute legal or tax advice. If you require legal or tax advice, please consult with a licensed attorney or tax professional in your jurisdiction. The contributing authors expressly disclaim all liability to any persons or entities with respect to any action or inaction based on the contents of this blog.

Joanna Castillo– Joanna is the Client Compliance Manager for Sequoia, where she works with our clients to optimize and streamline benefits compliance. In her free time, Joanna enjoys live music, college football, travel, and walking her dog in Golden Gate Park.