The Massachusetts Department of Family and Medical Leave (the “Department”) recently announced several updates in connection with the Massachusetts Paid Family and Medical Leave (“PFML”) program for 2023, outlined in the table below.
For employers with 25 or more covered individuals, this contribution can be split between covered individuals’ payroll or wage withholdings and an employer contribution. For family leave, up to 100% of the family leave contribution can be withheld from a covered individual's wages (0.11% of eligible wages). For medical leave, up to 40% of the contribution can be withheld from a covered individual's wages (0.208% of eligible wages). Employers are responsible for contributing the remaining 60% (0.312% of eligible wages).
Employers with fewer than 25 covered individuals are not required, but may choose, to pay the employer share of the medical leave contribution. For family leave, up to 100% of the family leave contribution can be withheld from a covered individual's wages (0.11% of eligible wages). For medical leave, up to 100% of the medical leave contribution can be withheld from a covered individual's wages (0.208% of eligible wages).
PFML, enacted in 2018 and fully implemented in 2021, provides paid family and medical leave benefits for covered individuals working in Massachusetts, including current full-time and part-time employees, certain former employees as well as seasonal and contractor employees. Covered individuals are eligible for up to 12 weeks for family leave and 20 weeks for medical leave (with a combined maximum of 26 weeks in any year).
Qualifying PFML reasons include caring for one’s own serious health condition, bonding with a new child, managing affairs while a family member[1] is on active duty, as well as caring for a family member with a serious health condition or injury suffered during military service.
Since PFML is job-protected leave, employers are prohibited from retaliating against employees for their use of PFML. Employers are also required to continue providing and contributing to employees’ health coverage while on PFML.
Employers must post and distribute certain PFML information to their employees, including new hires, such as a workplace poster as well as an employee notice and rate sheet, sample templates of which can be accessed here.
Certain employers (with 25 or more employees) and employees are required to the PFML program. However, employee contributions are capped by the Social Security taxable maximum, which was recently set at $160,200 for 2023. PFML benefits received are based on a percentage of an employee’s typical wages, up to a maximum amount set by the Department ($1,129.82 per week for 2023).
Finally, employers may opt out of the PFML contribution requirements by applying for an exemption from the state as long as their own paid family and medical leave program under a private plan is at least as generous as the PFML program with the same rights and protections.
During the summer, the Massachusetts state legislature proposed changes in its 2023 budget that would have allowed employees to “top off” their PFML benefits with accrued paid time off (PTO), such as vacation, sick, or other types of paid leave. However, Governor Charlie Baker vetoed these proposed changes.
Currently, an employee may not use accrued PTO while also receiving PFML benefits. Note that since there is a seven-day waiting period before PFML benefits begin, employees may use PTO during this waiting period with no consequence to their PFML benefit. Employees can also use PTO once their PFML period ends.
Risk Strategies is watching this development closely and will keep employers informed.
Update PFML policies and payroll systems to reflect these changes in advance of January 1, 2023.
Employers with PFML private plans may wish to assess whether the private plan option still is the best option for PFML, particularly since this is the second year that the PFML contribution rate has decreased.
Reach out to your Risk Strategies representative with questions or contact us at benefits@risk-strategies.com
[1] Family member generally means spouse, domestic partner, children (including stepchildren or children of a domestic partner), parents, parents of spouse/domestic partner, grandchildren, grandparents, and siblings.