Mass. Paid Household & Medical Go away Revision Affect on Employers

By Last updated Dec 16, 2020

Wednesday August 12, 2020

Earlier this spring, the Massachusetts Department of Family and Sick Leave (the “Department”) issued revised Massachusetts Family and Sick Leave Regulations (“MAPFML”). The rules affect employers who contribute to the state fund and employers who apply for an exemption from private plans. The MAPFML comes into force on January 1, 2021. This post describes the main changes to the final terms. If relevant to your organization, you can read it in conjunction with our companion post covering changes to the private plan exemptions.

The regulations revise the definitions of the key terms

“Covered Contract Worker” – The original rules created significant confusion as to whether an employer was required to remit contributions and provide benefits to its independent contractors. The new regulations now codify the department’s guidelines on this matter and make it clear that an employee who is properly classified as an independent contractor under the MGL, c. 151A § 2 is not a “covered contract worker” in the sense of MAPFML. The revised definition also clarifies that an “insured contract worker” must provide services to an employer as a single unit and reside in Massachusetts. If an individual is properly classified as an Independent Contractor, they will not be considered part of an employer’s workforce for the purposes of MAPFML eligibility. As many Massachusetts employers know, the proper classification of employees as independent contractors is a particular and sometimes difficult analysis.

“Temporary Vacation” – The revised rules clarify that the department will not provide benefits for temporary leave of less than 15 minutes. Note that employers can continue to increase amounts in line with their existing guidelines. An employee cannot request payment of temporary vacation benefits from the department until the employee has taken at least 8 hours of accumulated vacation unless more than 30 calendar days have passed since the employee’s first vacation.

Significant changes will be made to the exception requirements for private plans

Partial exceptions – While an employer can still request exemption from a private plan for medical leave only, family leave only, or both medical and family leave, an employer cannot request exemption for part of its workforce. All employees and insured contract workers of an employer must be eligible for benefits under a private plan in order for the department to approve an exemption request. The revised regulations make it clear that employers cannot offer private plan benefits, for example, only to exempted or highly paid employees.

Calculating the benefit – Employers must calculate a person’s benefit amount at the time the employee applies for benefits (ie based on the employee’s current salary or qualified income of the employee or the insured contract employee). If a person works for several employers at the same time, the benefit to which the employee is entitled is calculated separately for each employer or each insured business unit.

Appeal process for private plans – A major change in private plan applications is the introduction of an internal complaint procedure, which must give employees and insured contract workers the opportunity to appeal against a decision on benefits before they exercise their rights of appeal to the department. The requirements of an appeal for private plans include:

The private complaints process must allow a person at least 10 calendar days to lodge a complaint after receiving notification of a decision.
The appeal process for private plans must extend a 10 calendar day filing period if an individual finds that circumstances beyond the individual’s control have prevented filing of an appeal within the initial 10 day filing period.
An employer is also required to inform the individual of a decision under the private plan under the complaints process. The notice must list individual rights under both the private plan and the state’s MAPFML vacation. and
After an internal appeal process, employees retain the right to appeal to the ministry or a district court. If an employee files a complaint through the department, employers have five working days to submit the individual’s application and related documents to the department. Every decision by the department is then binding on the employer or the private plan administrator of a third party.

Decision not to renew a private plan, dissolution, acquisition, or merger – The revised rules provide guidance on what an employer should do if they fail to renew a private plan, or if they liquidate, merge into another company, or are acquired by another company:

An employer or insured business entity that does not extend an exemption from a private plan or chooses to terminate it must report previous wages and qualifying earnings to the department for the four quarters immediately prior to the termination date of the exemption. The employer or the insured business unit must also comply with the specified notification requirements.
An employer or covered business entity that dissolves or enters into an acquisition or merger after receiving approval for a private plan must provide the department with “adequate records” within 60 calendar days of the dissolution, merger or acquisition, or as soon as it is “reasonably practicable”. Notify ”So that the department can determine the effective date for the termination of the private plan. The employer must also list all affected workers and insured contract workers and provide the name and federal identification number of the employer of an acquiring company that is taking on workers or insured contract workers affected by the dissolution, acquisition or merger. If a private plan is not renewed, employers must coordinate the collection and transfer of contributions in order to put them into the state fund.

Clarity is added to the request for performance process

Request to notify an employer – The department clarifies that an employee’s application for Commonwealth benefits will only be approved if the applicant has previously informed the employer or the insured business entity of the need for vacation. If an applicant fails to comply with the termination obligations set out in the employer’s rules or termination procedure, and if no unusual circumstance explains the reason for non-compliance with such termination, benefits may be delayed or denied. Employees or insured contract workers must provide evidence, prior to the holiday, that the notice was sent to their employer or the insured business unit, including the date on which the notice was sent to the employer or the insured business unit. This revision will help employers effectively manage their workplace demands and address any employer’s concerns that a person may seek and receive benefits from the state without the employer’s knowledge.

Employers or insured companies can apply for benefits on behalf of individuals – The department allows employers, insured companies, or applicable agents to submit a claim on behalf of an insured person. This is likely to put an increased burden on applicants trying to navigate an already complex vacation process and allows an employer or insured business entity to more easily streamline and account for benefits. Employers are not required to conduct this application process and employers who choose to do so should ensure that this practice is consistently applied to all insured members of their workforce.

Reduction of the benefit amounts – When determining the vacation benefits, the regulations make it clear that insured persons will not receive any benefits for a period in which they are using the “accrued paid vacation” provided by the employer. In addition, benefits received on behalf of an employer or an insured business entity under a private plan, paid or unpaid vacation, wages (received by an employer, insured business entity, or self-employment) may be reduced from a benefit amount. or compensation received by an insured person on family or sick leave for the same legitimate reason within 12 months prior to submitting a claim for benefits from any source (with the exception of a legitimate reason that occurred before January 1, 2021), and the Benefits can be reduced due to outstanding tax obligations or child support obligations.

Revenge language revisions eliminate trivial inconveniences

MAPFML provides an employee-friendly presumption of retaliation if an employee or an insured person undergoes a “negative change” in their seniority, status, employee benefits, pay or other conditions of employment during their vacation or within 6 months of the claim. The same period of protection of 6 months is extended if an employee takes part in proceedings or investigations in connection with vacation. The regulations now stipulate that a negative change does not include “trivial or subjectively perceived inconveniences that affect de minimis aspects of an employee’s work” and contains some guard rails for a negative change. In addition, a bona fide fraud in connection with an employee’s claim for benefits reported by an employer to the ministry will not be considered retaliation.

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Massachusetts employers have been expecting and preparing for MAPFML benefits for over a year. Employers should review the final rules, adequately inform their workforce, and prepare either to continue contributing to the Commonwealth or to revise the application for a private plan and renew the borrowing obligations.