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Compliance Snapshot

To comply with MA PFML employers must:

  • Implement payroll deductions by October 1, 2019 or apply for a private plan exemption by December 20, 2019;
  • Provide notice to employees and 1099-MISC contractors (as applicable) and collect signed acknowledgments by September 30, 2019. If employers provided notice prior to June 14, 2019, they must notify their workforce on the changes to the law; and
  • Display the PMFL mandatory workplace poster, in the applicable language(s).

Summary

On June 13, 2019, the Massachusetts Congress signed amended legislation that delays the deadlines under the Paid Family and Medical Leave Program (PFML or Program) and increases the total contribution rate from 0.63% to 0.75% of covered individuals’ earnings. The delay does not affect the start date of the Program, which is set to begin January 1, 2021. In addition, the Massachusetts Department of Family and Medical Leave (the Department) recently released final regulations for the Program.

The revised deadlines are as follows:

Deadline Event
7/1/19 Final regulations are effective
9/30/19 Deadline to notify covered individuals of PMFL and hang mandatory poster
10/1/19 Employer and covered individual contributions begin
12/20/19 Deadline for employers to apply for a private plan exemption
1/31/20 Employer deadline for remitting contributions for the October 1 to December 31, 2019 time period
1/1/21 Covered individuals can start applying for benefits related to bonding with a child, service-member related events and dealing with a personal health condition
7/1/21 Covered individuals can start applying for all benefits

Background

Massachusetts (MA) 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, or to deal with exigencies from a family member being called to active duty.

MA PFML is funded through covered individuals’ contributions and employer contributions (employers only contribute when they have more than 25 covered individuals). Employers are responsible for collecting, remitting, and paying contributions and notifying their workforce about the Program. Employers can fulfill their obligation to collect, remit and pay contributions by doing one of the following:

  1. Implement payroll deductions by October 1, 2019 and remit quarterly contributions, beginning January 31, 2019;
  2. Offer a private plan with benefits as generous as those provided under the Program and apply annually for a private plan exemption; or
  3. Offer a self-insured plan with benefits as generous as those provided under the Program, apply annually for a private plan exemption, and post a bond (which is determined by the size of employer’s workforce).

In June 2019, the MA legislature decided the push back the start date and several deadlines by three months. The amendment changed the following deadlines:

Deadline Old Deadline New Revised Deadline
Employer Notification to Employees June 30, 2019 September 30, 2019
Employer and Employee Contributions July 1, 2019 October 1, 2019
Application for Private Plan Due September 20, 2019 December 20, 2019
First Contributions Due October 31, 2019 January 31, 2020

The amendment also changed the contribution rate from 0.63% to 0.75% to offset the shorter period of collection, due to the three-month delay.

On June 17, 2019, the Department released the final regulations, which will be effective on July 1, 2019.

Employer Next Steps:

  • Determine whether to implement a private plan or self-insured plan. If the employer chooses one of these options, they should apply for an exemption via MassTaxConnect by Department 20, 2019 (employers can later decide to implement a private or self-insured plan, but must implement payroll deductions and remit contributions in the interim);
  • If employer does not implement a private plan, determine the appropriate contribution amounts from employees and from the employer (if applicable). The employer should work with their payroll department to set up employee deductions by October 1, 2019 and start remitting contributions by January 31, 2020 via MassTaxConnect;
  • Distribute written notice to employees and 1099-MISC contractors (as applicable) by September 30, 2019 and collect signed acknowledgements of receipt; and
  • Post the PMFL mandatory workplace poster in a conspicuous place in the workplace.

Please see our MA PFML FAQ for more details.

Additional Resources

General

Notice and Poster 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.

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.