10 Points Every Massachusetts Employer Should Know About The New Paid Family & Medical Leave Law

An earlier version of this article was published earlier this year in anticipation of the July 1st effective date, subsequently postponed until October 1, 2019.

With the new effective date fast approaching, Agency Checklists has reprinted our list of 10 things every business should know about the new law…

The law will goes into effect Tuesday October 1st, after being postponed from its initial July 1st effective date

On June 28, 2018, Massachusetts Governor Baker signed the Family Medical Leave Act as part of a package of laws that also adjusted the minimum wage, raising it to $15 by 2023, and creating a sales tax Holiday, while abolishing time and half overtime pay for Sunday work in retail establishments.

With this law, Massachusetts became the sixth state to offer private sector employees paid medical and family leave. The new law creates a new chapter in the Massachusetts Gen. laws, Chapter 175M, entitled “Family and Medical Leave” (“the Act”).

The law provides for a new state agency, the Department of Family and Medical Leave, (the “Department”) to pay workers “Medical leave benefits” and “Family leave benefits” as wage replacements when these employees take a qualified medical leave or family leave pursuant to the statute.

The funding of the medical leave and family leave benefits from the Department of Family Medical Leave will come from the Family and Employment Security Trust Fund (Security Trust Fund or trust fund) the law creates. This trust fund will acquire its corpus from a new charge levied on employers and employees.

10 Points Every Employer Should Know About the new PDML Law

The following are ten points that stand out in the law and allow our readers to understand better what it offers employees and what it requires from employers.

1. The start date for employee and employer contributions to the Security Trust Fund

Starting on Tuesday, October 1, 2019 employers will be obligated to pay into the trust fund an annual amount equal to 0.75% of each employee’s wages with a maximum contribution of $808.92 set at the Social Security Administration’s maximum wage for Social Security taxes of $132,900. For employees in firms with more than twenty-five workers, the payment of the 0.75% of wages is split between the employer (.372%) and the employee (.378%).

2. Amount of employee and employer contributions to the Security Trust Fund

While employers will collect and pay the trust fund the full percentage of an employee’ salary required by the new law, they may recover 100% of the family leave portion payable to the trust fund from the employee. Employers with more than twenty-five employees must pay at least 60% of the medical leave portion payable to the trust fund. These employers may only recover 40% of the payment from the employees. Employers with twenty-five or fewer employees do not have to contribute toward personal medical leave, although they do still have to deduct those amounts from the employees’ wages.

Employers will be responsible for remitting contributions from both its W-2 employees, whether they are full-time, part-time, or seasonal, as well for all 1099-MISC contractors.

3. Employee’s right to paid medical and family leave does not start until 2021

Although employees and employers will begin their contribution to the Security Trust Fund on October 1, 2019, under the Act, the Department will not begin to pay Family and Medical Leave benefits starting January 1, 2021.

Once Family and Medical Leave benefits do become payable, the Act provides for the first seven calendar days of any leave there is no payment. An employee will have to use any accrued sick or vacation pay, or other paid leave provided under an employer’s policy, if any, during those first seven days of their leave.

4. Qualified medical leave

Under the Act, employees may take a medical leave of up to 20 weeks for a personal serious health condition. An employee may take a medical leave during pregnancy or recovery from childbirth if supported by documentation by a health care provider that is immediately followed by family leave. However, in no case, can the employee take more than 26 weeks, in the aggregate, of Family and Medical Leave in the same benefit year.

5. Qualified family leave

Presently, Massachusetts which provides for eight weeks of unpaid leave for the birth or adoption of a child. Federal law provides for 12 weeks of unpaid leave similar to Chapter 175M, for employees of companies of fifty or more employees.

Under the Act, employees may take a family leave of up to twelve weeks to:

bond with their child during the first 12 months after the child’s birth or during the first 12 months after the child’s placement for adoption or foster care with the individual;
for a qualifying exigency arising out of the fact that a family member is an active duty service person or is a service person who has received a notice or order to report for duty;
to care for a family member with a serious health condition; or.

However, an employee may take family leave for up to 26 weeks to care for a family member who is a service member with a serious injury or illness incurred or aggravated by service in the Armed Forces.

In any case, an employee may not take more than 26 weeks of Family and Medical Leave in the same year.

6. Benefit amounts payable

The maximum weekly benefit amount payable is $850 per week. By October 1 of each year, the Act requires the Department to adjust the maximum weekly benefit amount to be 64 percent of the state average weekly wage. The adjusted maximum weekly benefit amount will take effect on January 1 of the next year.

For payments less than the maximum, the Department is required to pay:

the portion of an employee’s average weekly wage that is equal to or less than 50 percent of the state average weekly wage at a rate of 80 percent; and
the portion of an employee’s or self-employed individual’s average weekly wage that is more than 50 percent of the state average weekly wage at a rate of 50 percent.

As of October 1, 2017, the Massachusetts average weekly wage was $1,338.00. A person earning a weekly wage of fifty percent of that amount or $669.00 per week would receive a weekly paid leave of $535.20 from the Department. For every $100.00 of weekly wage above that $669.00, the employee would receive an additional $50.00 per week up to the $850.00 maximum.

7. Required notices to employees starting October 1st

Starting October 1st, all Massachusetts employers must post in a workplace poster either “prepared or approved by the Department of Family and Medical Leave (DFML)” explaining all of the available benefits to employees under the new law.

The poster must be placed in a conspicuous position within the workplace where it can be easily read by all. In addition to the notice being in English, a copy of the poster must also be in another language when there exist five or more individual in a company’s workforce who speak that language. Workplace poster translations in other languages such as Spanish, Chinese, Haitian Creole, Italian, Portuguese, Vietnamese, Laotian, Khmer, Russian and possibly other languages are available from the DFML via this link.

In addition to the workplace poster, under the new law, employers must, not more than 30 days from the beginning date of an employee’s employment, provided in the employee’s primary language:

an explanation of the availability of Family and Medical Leave benefits provided under this [the Act], including rights to reinstatement and continuation of health insurance;
the employee’s contribution amount and obligations under [the Act];
the employer’s contribution amount and obligations under [the Act];
the name and mailing address of the employer;
the identification number assigned to the employer by the Department;
instructions on how to file a claim for Family and Medical Leave benefits;
the mailing address, email address and telephone number of the Department; and
any other information deemed necessary by the Department.

Evidence of the delivery is an employee’s written acknowledgment of receipt of the information, or there is a signed statement indicating the employee’s refusal to sign such acknowledgment. (The Act does not specify who would sign the statement of an employee’s refusal to acknowledge the required notice).

8. Employee’s right to restoration of their previous position before taking leave

If an employee has taken family or medical leave the employer must restore them to their previous position or an equivalent position, with the same status, pay, employment benefits, length-of-service credit and seniority as of the date of leave.

The exception is if an employer if other employees of equal length-of-service credit and status in the same or equivalent positions have been laid off due to economic conditions or other changes in operating conditions affecting employment during the period of leave. Still, in that case, the employee who took leave has to retain any preferential consideration for another position to which the employee was entitled as of the date of leave.

9. Leave cannot affect employee’s benefits

The Act also provides that for the employee taking leave there will be no effect on their right to accrue vacation time, sick leave, bonuses, advancement, seniority, length-of-service credit or other employment benefits, plans or programs.

Also, during the duration of an employee’s family or medical leave, the employer shall continue to provide for and contribute to the employee’s employment-related health insurance benefits, if any, at the level and under the conditions coverage would have been provided if the employee had continued working continuously for the duration of such leave.

10. Treble damages and attorney fees for retaliation against employee taking leave

Agency Checklists, MA Insurance News The Act prohibits an employer from retaliating against an employee for exercising any right to family or medical leave by discharging, firing, suspending, expelling, disciplining, through the application of attendance policies or otherwise, threatening or in any other manner discriminating against the employee.

Under the Act, any negative change in the seniority, status, employment benefits, pay or other terms or conditions of employment of an employee which occurs any time during a leave taken by an employee, or during the 6 month period following an employee’s leave or restoration to a position is presumed to be actionable retaliation. An employer can only rebut that presumption only by clear and convincing evidence (a standard higher than the preponderance of evidence standard of a civil suit) that such employer’s action was not retaliation against the employee.

Under the Act, an employee or former employee has up to three years from any alleged retaliation or negative changes in their employment because of their taking family or medical leave to file a civil action in superior court and claim a jury trial. In that suit, the Act specifically empowers the superior court to:

issue temporary restraining orders or preliminary or permanent injunctions to restrain continued violations of this section;
reinstate the employee to the same position held before the violation or to an equivalent position;
reinstate full fringe benefits and seniority rights to the employee;
compensate the employee for three times the lost wages, benefits and other remuneration and the interest thereon; and
order payment by the employer of reasonable costs and attorneys’ fees.

Final thoughts: Self-employed individuals can opt-in, and companies can opt out

Somewhat surprisingly, residents of the Commonwealth who are sole proprietors, members of a limited liability company or limited liability partnership may elect coverage under the Act by filing a notice of election in writing with the Department and making contributions to the Security Trust Fund.

Also, under the Act, with the approval of the Department, companies can self-insure their Family and Medical Leave benefits or may provide these benefits under an insured plan with an approved insurer of the Department.

Only time will tell if the expansion of the Act to self-employed individuals will result in abuses or if a market for insurance coverage for Family and Medical Leave payments develops as additional states pass legislation mandating this employee benefit.