Ready, Set: Massachusetts Releases Timeline, Revised Regulations, and Employer Toolkits for Paid Family and Medical Leave

The start date for the paid leave program is July 1, 2019. All employers with at least one Massachusetts employee must begin collecting employee contributions on that date. Arent Fox summarized this new employee benefit in an earlier client alert.

The Timeline

• January 23, 2019: Initial draft regulations released for comment
• March 29, 2019: Revised draft regulations released for comment and public hearings
• April 29, 2019: Approved plan (a/k/a “private plan”) applications available to employers for electronic submission
• July 1, 2019: Final regulations effective and employers begin collecting employee contributions
• October 31, 2019: Employer and employee contribution payment due for the July 1 through September 30, 2019 quarter
• January 1, 2021: Most leave benefits available to employees
• July 1, 2021: Leave benefit to care for a family member with a serious health condition available to employees

Revised Draft Regulations

The Department issued proposed regulations on January 23, 2019 and then held “several” listening sessions throughout the Commonwealth to gather comments.  Revised draft regulations were released by the Department on March 29, 2019 for further comment and public hearings. The final regulations will be effective as of July 1, 2019.  In general, the revised draft regulations state the procedures that employers, employees and the Department will follow to implement the paid leave program. You can find a copy of the revised draft regulations here.

The revised regulations cover the following major areas:

• Registration as an employer and filing of quarterly contribution payments
• Collection of employee contributions 
• Application for a “private plan” exemption from the public paid family and medical leave program
• Filing of a claim for employee benefits
• Approval of a claim for benefits
• Processing of claim denials and appeals
• Protection of employee jobs and prohibition of employer retaliation

While the regulations provide rules and procedures, the employer toolkits described below likely will prove to be more useful to employers as the toolkits offer practical how-to information for employers.

Employer Toolkits

Employer Responsibilities: Reporting wage information about workforce; determining contribution amounts for employer and employees; deducting the appropriate amounts from employee/1099-MISC contractor pay; and notifying workforce of the new paid family and medical leave program.

Notifying Workforce: Posting of mandatory Paid Family and Medical Leave poster; notifying employees, including every 1099-MISC contractor, of contributions, benefits and workforce protections; and collecting signed acknowledgements from employees/contractors that they received the notice.

Required Contributions: Determining whether the company’s 1099-MISC contractors are covered in addition to W-2 employees; ascertaining whether the company is required to pay an employer share of contributions.

Reporting and Documentation: Filing of quarterly reports through MassTaxConnect to begin in October 2019 (the Department will release reporting and documentation guidelines prior to July 1, 2019); minimum employee information to be reported, in addition to contribution amounts, will be employee name, social security number, wages paid, and employer tax identification number.

Private Plan Approval: Employers with an existing paid leave plan with benefits that are equal to or are greater than benefits available through the public paid medical and leave program may be exempt from collecting and remitting contributions, and from paying benefits, under the public program. Employers may apply for an annual exemption from family leave contribution, medical leave contribution, or both beginning on April 29, 2019. The application will be available through MassTaxConnect. The private plan approval toolbox has a checklist of public plan benefits that employers can use to determine whether their existing paid leave benefit programs are eligible for exemption.

Self-Employed Individuals: Self-employed individuals may voluntarily participate in the public plan, provided that a self-employed individual must pay the full contribution rate (combined employer and employee contributions) for medical and family leave.

Worker Toolkits: The Department also issued worker toolkits that include a timeline, the types of leave that will be available, eligibility for benefits, maximum amounts of leave, weekly benefits and worker contribution rates.

Next Steps for Employers

The Department is holding firm to the July 1st start date for collecting employee contributions. Accordingly, employers should take the following actions:

Step 1

Review existing paid family/medical leave benefits to determine whether those benefits could qualify as private plans. Employers should submit private plan approval applications to the Department as soon as possible after April 29, 2019. The review period for approval or rejection of an application is unknown, and employers should be ready to move forward under the public plan if an application for private plan approval is denied.

Step 2

Determine the amounts they will contribute towards the public plan family and medical benefits, including whether they will make contributions that exceed the minimum levels required by the Department.  As a refresher, the combined employer and employee contributions for each employee in 2019 will be .63 percent of the employee’s salary up to a maximum salary cap of $128,400. Minimum contribution levels will be allocated between employers and employees in 2019 as follows:

• Medical (.52% of payroll)
  Employer/employee breakdown: 60% employer (minimum) / 40% employee (maximum)
• Family (.11% of payroll)
  Employer/employee breakdown: 0% employer (minimum) / 100% employee (maximum)

Employer contributions above the minimum will reduce employee contribution levels.

Step 3

Display the required poster in a place where it can easily be read by employees and 1099-MISC contractors. Currently, the approved Department poster is available only in English. However, the Department will translate the poster into additional languages and, when translations are available, employers must display the poster in English and in each language that is the primary language of 5 or more employees. Employers must notify each employee and 1099-MISC contractor of the new paid leave program, and each employee/contractor must sign an acknowledgement that the notice has been received. The employee/contractor notice must include information about contributions, benefits and workforce protections.

Employers should expect that the new paid leave benefit program will proceed on time and take appropriate steps to be ready on July 1, 2019.