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The Massachusetts Department of Family and Medical Leave (the Department) released draft regulations for paid Family and Medical Leave (PFML) on January 23, 2019. The final regulations will be issued on July 1, 2019 after a period for public comment.

Massachusetts passed PFML in 2018, which provides eligible individuals with wage replacement to care for a family member, bond with a new child, care for one’s own health condition, and deal with exigencies from family members being called to active duty. Contributions began on January 1, 2019 and eligible individuals can apply for PFML benefits starting January 2021.

Below are some FAQs arising from the new proposed regulations. For additional information on PFML, read our article “Massachusetts Enacts Paid Family Leave.”

Do employers need to contribute to the Family and Medical Leave Law?

Employers averaging fewer than 25 employees in the prior calendar year are not required to pay the employer portion of the premiums. To determine the average employee count, employers must count all full time, part-time, seasonal, and temporary employees on payroll during each pay period in the prior calendar year and divide the sum by the number of pay periods.

Employers averaging more than 25 employees must pay the employer portion of contributions. Employers may apply for an annual exemption to PFML if they offer private plans with benefits that are at least as generous as PFML. An application process for exemptions is still being created by the Department.

How much do I need to remit?

Both employers and employees contribute to PMFL. The contribution rate is determined by the Department on October 1 of the prior year.

The initial contribution rate is 0.63% of employees’ wages, up to $128,400 of employees’ annual earnings. Total contributions are split 82.5% to medical leave (0.52% of employee wages) and 17.5% to family leave (0.11% of employee wages). An employer may deduct up to 40% of the medical leave contribution from employees’ wages, so the employer pays at least 60% of the medical leave contributions. Employers pay the entire share of the family leave contributions. For more information see the Department website.

How do I remit contributions for the Family and Medical Leave Law?

Employers must remit contributions quarterly through the Massachusetts Department of Revenue MassTax Connect System, which is likely handled by an employer’s payroll division. The quarterly reports contain information for each employees’ wages. Based on the quarterly report, the Department will calculate the total quarterly contribution owed. The contributions owed must be remitted by the end of the calendar quarter.

The above information is based on proposed regulations and are subject to change.

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.

Emerald Law– Emerald is a Client Compliance Consultant for Sequoia, where she works with our clients to optimize and streamline benefits compliance. In her free time, Emerald enjoys stand-up comedy, live music and writing non-fiction.