On September 26, 2022, the Massachusetts Department of Family and Medical Leave (DFML) announced annual updates that will impact the calculation of paid leave benefits for workers in the Commonwealth beginning January 1, 2023. A previous alert on the Massachusetts Paid Family and Medical Leave (MA PFML) program is copied below for reference.

• As a result of an increase in the Massachusetts average weekly wage (AWW), the maximum PFML benefit is increasing from $1,084.31/week in 2022 to $1,129.82/week in 2023.
• The maximum contribution rate for MA PFML has decreased from 0.68% of eligible wages in 2022 to 0.63% of eligible wages for 2023. Employers must remit to the DFML contributions equal to the applicable percent of all eligible wages. The responsibility for the contribution is shared between employer and employee and differs based on employer size:
  • Employers with 25 or more covered employees may withhold up to 0.11% of eligible wages for employees’ family leave contributions and up to 0.208% of eligible wages for employees’ medical leave contribution. The remaining 0.312% of eligible wages represent the employer share of the contribution and must be covered by the employer. The total contribution rate for these employers is 0.63% of eligible wages.
  • Employers with fewer than 25 covered employees may withhold up to 0.11% of eligible wages for employees’ family leave contributions and 0.208% of eligible wages for employees’ medical leave contribution. There is no required employer share for these employers (although they may choose to cover a portion of the contribution) and their total contribution rate is 0.318% of eligible wages.
• All changes are effective January 1, 2023.

MA DFML Revised Final Regulations (originally sent July, 2020)

The Massachusetts Department of Family and Medical Leave (DFML) has finalized its 2020 regulations regarding Massachusetts’ Paid Family and Medical Leave law (MA PFML). The regulations were effective July 24, 2020. The PFML entitles employees to leave benefits separate from those granted under the Family and Medical Leave Act (FMLA) or employers’ existing policies. PFML leave will become available on January 1, 2021.

Background

• Any Massachusetts employer, or any out-of-state employer with at least one Massachusetts employee, is covered under the MA PFML law.
• The cost of providing MA PFML leave is covered by a state tax paid by employers based on the size of their workforce in the prior calendar year.
• Paid family leave can be taken to care for a sick family member, bond with a new child, or manage family affairs when a family member is on active military duty. Paid medical leave may be taken for the employee’s own serious illness or injury.
• Employers may apply for an exemption if they provide equivalent job-protected leave benefits, for which all employees are eligible, through an approved private plan.
• A private plan must provide benefits to former employees who otherwise meet the financial eligibility requirements of the MA PFML. Former employees may apply for leave up to 26 weeks after separation from employment assuming that they have not obtained other employment.

Revised Definitions

• The original text of the regulations created confusion as to whether employers were required to make contributions for and provide benefits to independent contractors. The new regulations state that workers who are properly classified as “independent contractors” under M.G.L. c. 151A § 2 will not be considered part of an employer’s workforce for purposes of MA PFML eligibility. However, under the criteria in the relevant section of Massachusetts law, it may be challenging to classify workers as independent contractors and therefore exclude them from being counted as part of the workforce.
• The definition of “intermittent leave” was clarified to specify that the minimum time increment for leave, for purposes of applying for payment from the Commonwealth, is 15 minutes. Additionally, employees cannot apply for payment of intermittent leave benefits until they have accumulated at least eight hours of leave time (unless more than 30 calendar days have passed since leave commenced).
• “Private plan administrator” is defined as the third-party administrator of a private plan. Employers may serve as private plan administrators.

Private Plan Exemption Requirements

• Application deadline: While retroactive applications were accepted in 2019, the new regulations do not allow retroactive applications for 2020. Applications for the 2020-2021 plan year, for both renewal of existing exemptions and for new private plan exemptions, must be submitted by September 30, 2020.
• Effective date: Coverage under a private plan begins on the first day of the first quarter following the date of approval by the DFML (or, for an already approved plan, on the employee’s date of hire). An employee’s leave will continue to be covered by the entity with which the leave was originally filed, even if the employer transitions from DFML coverage to a private plan or vice versa during the leave.
• Partial exemptions: While employers may apply for a partial exemption based on a private plan they have for a particular type of leave (e.g., medical only or family only), they may not apply for an exemption for only part of their workforce. In order for the exemption to be approved, the employer’s private plan must cover all employees and covered contract workers.
• Calculation of benefits: Benefits are calculated based on the employee’s rate of pay at the time they apply for leave. Individuals working for multiple employers will have their benefits calculated separately for each employer.
• Anti-retaliation protection: A private plan must contain protections against retaliation for workers who exercise their MA PFML rights.
• Appeals: In order to be considered for an exemption, an employer’s private benefit plan must include an internal appeals process that meets all of the following requirements:
  • the employer provides individuals with notice of their rights under both the private plan and under MA PFML when leave is denied
  • individuals have at least 10 calendar days to file an appeal from the date they receive notice that their leave was denied
  • the filing deadline can be extended if an individual can establish that circumstances beyond their control prevented them from filing on time
  • employees retain their right to appeal to the DFML or file a claim in court after engaging in an employer’s internal appeals process; any decision by the DFML will be binding on the employer or plan administrator  

Guidance on Non-Renewal, Dissolution, Acquisition, Merger

• If an employer decides to end a private plan exemption, they must report the previous four quarters’ wages and qualified earnings to the DFML and comply with the notice obligations specified in the MA PFML law.
• Employers must coordinate the collection and remission of contributions to the state fund for any private plans that are discontinued.
• Employers with an approved private plan exemption must notify the DFML within 60 calendar days (or as soon as “reasonably practicable”) if they undergo a merger, acquisition, or dissolution. Notice must include
  • sufficient documentation to allow the DFML to determine the date of termination of the private plan
  • a list of all employees and covered contract workers affected
  • the name and Federal Employer Identification Number of any entity that will be taking on impacted employees/covered contract workers

 Benefits Application Process

• Employers or private plan administrators must provide the DFML with an individual’s application within 10 business days following a request for leave.
• Employees must notify the employer of the need for leave before applying for benefits from the Commonwealth. Failure to do so will result in the delay or denial of benefits. Employees must submit to the DFML proof that notice was submitted to their employer before leave was taken, including the date notice was provided. Employees cannot be granted leave benefits without the employer’s knowledge.
• Employers may, but are not required to, apply for benefits on behalf of their employees. Employers who choose to do so must ensure that the practice is applied uniformly for all of their covered employees.
• Employees may choose to use employer-provided accrued paid leave to cover a MA PFML leave of absence, but they cannot receive additional MA PFML benefits for those days. Benefits under PFML run concurrently with any accrued paid leave employees choose to use, and employers must inform employees of this provision of MA PFML law.
• If a former employee applies for leave, the previous employer has the right to inquire as to whether the employee has secured other employment.

Limits on Anti-Retaliation Clause

• The MA PFML law includes a presumption of retaliation if an employee experiences a negative change to their employment status during, or within six months after, taking a leave of absence or participating in proceedings or inquiries associated with PFML leave.
• The regulations place limits on the presumption of retaliation, excluding negative changes that are “trivial” or that impact minimal aspects of an employee’s work.
• Employer reports to the DFML that are motivated by a bona fide belief that fraud may have occurred with respect to an employee’s leave will not be considered retaliation.