MA Paid Family Medical Leave Payroll Deductions to Begin October 1st

MA PFML is a statewide program that gives eligible employees paid time off for family and medical leave beginning January 1, 2021. PFML will provide employees up to 12 weeks of paid family leave and 20 weeks of paid medical leave or up to 26 weeks of leave to care for a family member who is a service member. All Massachusetts employers with one or more employees are subject to the PFML law. Employers must submit contributions on behalf of employees. After a three-month delay in implementation, employer deductions under PFML will begin October 1, 2019 which will represent the first quarter of payroll withholdings. These withholdings, and in some cases employer payments, will be remitted to the Department of Family and Medical Leave (DFML) via MassTaxConnect 30 days following the conclusion of each calendar quarter and will begin with the first payment made on or after Oct. 1, 2019. Contribution percentages depend on your average number of covered individuals from the last calendar year. Employers with fewer than 25 employees do not have to contribute to the employer portion of PFML. Employers with 25 or more employees must pay an employer contribution amount. 1099-MISC contractors may be considered covered individuals. See the link below for help in determining who is a covered individual for PFML purposes.

The DFML has released the revised allocation of PFML contribution rates beginning October 1, 2019. Employers must begin withholding and paying Massachusetts family and medical leave contributions at an initial rate of 0.75% (up from 0.63%) of each employee’s wages up to the 2019 Social Security wage base of $132,900. Based on the new rate of 0.75%, 0.62% funds medical leave and 0.13% funds family leave. Employers with 25 or more employees may withhold up to 40% of the medical leave portion of the contribution from employees’ wages. Employers with 25 or more employees are required to fund the remaining 60% of the medical leave contribution, however they are not required to contribute to the family leave portion, although they may choice to do so. See the link below to access the DFML’s calculator tool for help in determining your contribution amount.

Important Dates:
September 30, 2019 — Employers and covered business entities are required to post a notice and provide written notice to their current workforce. A sample poster and tips on crafting your written notice can be found here.

October 1, 2019 — Payroll withholdings begin. MA PFML has created a tool to help you estimate the number of your covered individuals. The tool can be accessed here. Help in determining your contribution can be found here.

December 20, 2019 — Deadline to file for a private plan exemption for first quarter contributions.

January 31, 2020 — First quarterly contribution payment due through MassTaxConnect.

The DFML’s website has a lot of valuable information, tools and webinars that you may find helpful in answering most of your questions regarding PFML. A link to the Department’s website can be found here.

Connecticut Paid Family and Medical Leave Law

On June 25, 2019, Governor Ned Lamont signed into law Connecticut’s Paid Family and Medical Leave law. Below are some highlights from the new law:

Connecticut Paid Family and Medical Leave Law
Key Dates June 25, 2019 – CT Governor signs legislation into law;
January 1, 2021 – Employee payroll tax begins;
January 1, 2022 – Benefits become available and final regulations are due;
July 1, 2022 – Annual notice of benefits to all new employees required.
Governing Body New state agency, the Paid Family Leave Insurance Authority.
Covered Employers Employers with at least one employee working in the state. The law exempts municipalities, local or regional boards of education, and nonpublic elementary and secondary schools. Municipal union employees can bargain to be covered under the state program. If the union bargains and is granted inclusion, non-union employees for that municipality will automatically be included.
Eligible Employees An employee who has earned at least $2,325 in a base period (ex:  first four of the five most recently completed calendar quarters) and have been employed at least 3 months preceding the leave request. Available to full-time, part-time and former employees (if they apply within 12 weeks of losing their job).
Leaves Covered Family leave to bond with a newborn or adopted child. Medical leave to care for a family member with a serious illness (family member’s include spouse, child, parent, parent-in-law, stepparent, others who are equivalent to a family member, grandchild, grandparent or sibling).  Medical leave is also available for the employee’s own serious illness. Paid leave is also available to serve as an organ or bone marrow donor.

Intermittent leave will also be allowed except in the case of bonding with a newborn or adoption.

Length of Leave Up to 12 weeks of paid family and medical leave during a 12 month period, with another two weeks available for a serious health condition related to pregnancy.
Benefit Amount 95% of base weekly earnings up to 60 times the minimum wage rate (maximum weekly amount will be approximately $780 per week in 2022 up to $900 per week in 2023).
Payroll Contribution Beginning January 1, 2021, a new payroll tax up to .5 percent of the employee’s wages will be deducted to fund the program. Wages are capped at the Social Security wage base ($132,900 in 2019).
Concurrent Benefits If an employee is receiving worker’s compensation, unemployment compensation and another other state or federal wage replacement, they will not be eligible for benefits under the CT Paid Family and Medical Leave.
Private Employer Plans Connecticut employers can opt out of the state program if they have an employer sponsored private plan that provides the same or more generous benefit. Private plans must be approved by a majority of covered employees.

The above is a brief overview of the law as it stands today and is subject to change. Final regulations are due by January 1, 2022 which is the same date that benefits are first payable. The regulations should clarify issues surrounding implementation, coordination with CT’s unpaid FMLA leave and provide sample model notices. Diversified Group will keep you informed of any developments.