Paid Household And Medical Depart Advantages Are Out there January 1, 2021: What Massachusetts Employers Ought to Do To Put together – Employment and HR

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Massachusetts will soon be added to the growing list of states requiring paid family and sick leave for employees. Effective January 1, Massachusetts employees will be entitled to benefits under the Commonwealth’s new Paid Family Medical Leave (PFML) law. PFML provides paid leave to someone who is in a health crisis, connecting with a child, or caring for a sick relative.

Massachusetts employers should take steps now to ensure they can meet their PFML commitments in the New Year. This post provides a brief overview of PFML and action items for employers.

Overview of PFML

Employers can comply with PFML either by: (1) participating in the state plan, which is funded by a state tax; (2) Manage a private plan (either from own resources or through a third party insurer) that requires government approval and provides workers with equal or better benefits.

PFML entitles an insured employee to up to 26 weeks of paid vacation for any of the following qualified reasons:

  • Up to 20 weeks of paid vacation to treat the serious illness of the employee;

  • Up to 12 weeks of paid vacation to bond with a child after the child is born, adopted, or cared for;

  • Up to 12 weeks due to a Qualified Emergency relating to a family member on active duty; and

  • Up to 26 weeks for caring for a family member who is an insured service member.

The remaining PFML benefits will be available on July 1, 2021. At this point in time, an insured person is also entitled to up to 12 weeks of paid vacation to look after a family member with a serious state of health.

The vacation benefits are financed by employer contributions, which are based on the number of employees.

Employers can deduct part of their required contributions from the employee’s wages. Employers may not deduct more than 40% of their required contribution from wages for medical leave. You can deduct up to 100% for family vacations.

An employee taking PFML leave is expected to give their employer at least 30 days’ notice. You should include the expected start date of the vacation, the expected length of the vacation, and the expected date of your return. Of course, employers should be flexible if extenuating circumstances make 30 days’ notice impractical.

Massachusetts employers, on the other hand, have an obligation to reassign an employee who returns to work after a medical or family vacation to their pre-vacation position. This includes job status, pay, benefits, seniority credit, and seniority. Also, taking PFML may not affect an employee’s vacation time, sick leave, bonuses, or advancement. Retaliation is suspected for negative employment measures taken within six months of an employee’s vacation. Finally, employers must continue to provide work-related health insurance benefits regardless of whether an employee is currently on vacation.

The option for a private plan

An employer can request a contribution waiver by showing that they offer vacation benefits under a private plan. A company wishing to do so should apply for exemption through the MassTaxConnect system of the Massachusetts Department of the Treasury. A plan will only be approved if it: (i) offers the same or better benefits than those provided by PFML; (ii) does not cost employees more than they would be charged to receive PFML; and (iii) establish a complaints procedure with the Private Plan Administrator prior to a complaint by the Family and Sick Leave Department (the “Department”). An employer who has been denied an exemption by the department may request an additional review of the decision.

Important provisions of PFML

  • Any employee who earns more than $ 70,000 annually will receive the maximum government benefit of $ 850 per week

  • PFML can be taken concurrently with other statutory vacations such as the Federal Family Medical Leave Act and the Massachusetts Parental Leave Act

  • Independent Contractors (1099) may be eligible for PFML if more than 50% of the employer’s workforce is independent

  • Accrued Paid Leave (Vacation, Sick Leave, PTO) can be used in place of PFML payments. This means that employees who choose PTO will not be able to receive government PFML benefits for the same period of time

  • In contrast, employees can receive employer-provided short-term disability benefits and paid family / sick leave and receive the PFML state benefits for the same period of time (which means that these employer benefits can “top up” the PFML state benefits up to the average weekly wage of the employee).

  • Employees can take temporary leave under PFML (employer approval is only required for child bond leave).

Action points for employers:

  • If you haven’t already, register with MassTaxConnect, which is where you make contributions and quarterly submissions.

  • Post the mandatory PFML poster at your workplace if you haven’t already.
  • Revise the onboarding documents to inform new hires of the PFML benefits.
    • Employers are required to provide a written statement of the law within 30 days of an employee’s start date.

  • Review and revise policies to accommodate PFML, and ensure policies specify that statutory vacations are run concurrently.
    • Vacation, sick days and other PTO policies
    • FMLA and parental leave guidelines
    • Military leave policy
    • Short-term and long-term disability leave arrangements

  • Update the FMLA achievement year to be consecutive (rather than calendar-based) so that it matches the Massachusetts PFML achievement year.

  • Determine if you’d like to apply for the private plan option. Exceptions to private plans can be secured for 2021 through December 31, 2020 even if you have already paid into the state fund.
    • If you are using an approved private plan, keep all reports, information, and records about that plan for at least three years.
  • Training of the employees in the HR department with regard to the PFML requirements and the interaction with existing vacation and PTO guidelines.

  • Inform management of new rights and obligations.
    • Those in authority should know that any negative change in employment status made within six months of an employee’s vacation will be viewed as retaliation.

  • Review the logging logs for prompt response to requests for information from the department.
    • Employers must respond to a request for wage, income, or employment information for an employee within 10 calendar days of sending the request.
  • The department can review a private plan to make sure it’s compliant.

In an upcoming blog post, we’ll review frequently asked questions from Massachusetts employers preparing for January 1, 2021. In the meantime, please contact your Foley & Lardner LLP Labor and Employment attorney for assistance with Massachusetts law or with paid family and sick leave requirements in each state in which you are employed.

Originally published by Foley & Lardner, November 2020

The content of this article is intended to provide general guidance on the subject. A professional should be obtained about your particular circumstances.

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