MASSACHUSETTS PAID FAMILY & MEDICAL LEAVE LAW WHAT YOU NEED TO KNOW
Massachusetts Paid Family and Medical Leave Law (“MA PFML)”: • What is it? • When does it go into effect? • Who is eligible and what can it be used for? What we’ll • How are Employer and Employee contributions determined? cover today • What do employers need to be doing now? • What should your payroll company be doing to help? • How does MA PFML interact with other Federal and State leave laws? • What are the consequences of non-compliance of notice provision?
CAUTION THIS MATERIAL IS NOT INTENDED AFTER THIS SEMINAR, SHOULD YOU TO BE LEGAL ADVICE AND SHOULD HAVE QUESTIONS SPECIFIC TO YOUR NOT BE RELIED ON AS SUCH. BUSINESS PLEASE CONTACT DIRECTLY.
• MGL c.175M establishes a system for paid family leave of up to 12 weeks to care for a family member, and up to 20 weeks for your own illness. • The tax that pays for it begins on October 1, 2019 • Leave will be available beginning in January 2021 for personal leave and in July 2021 for leave to care for MA PFML family members. • MA PMFL applies to all business and employers that M.G.L. c. 175M, §1 employ 1 or more Massachusetts workers, with et seq. limited exception. • Employees are not required to complete a “probationary” period before being granted leave. • Leave is portable, not employer specific
What Employees/Covered Individuals are eligible for PFML? • Covered Individual is: o (i) employee (subject to financial eligibility requirements and all employment in MA) or a 1099 Contractor if that contractor makes up more than 50% of the employer’s workforce; o (ii) self-employed individual who has elected coverage AND reported earnings to the DOR; or o (iii) former employee who met the financial eligibility requirements and all employment in MA at the time of separation, and has not been separated for more than 26 weeks
• Financial Eligibility Requirements • M.G.L. 151A, § 24(a) What • Covered individuals must have been paid Employees/Covered wages (by any employer) in the last 4 calendar quarters immediately preceding Individuals are the claim for benefits amounting to at eligible for PFML least $4,700 and 30 times the weekly cont. benefit rate • These are the same eligibility requirements for unemployment insurance
Counting Covered Individuals in Your Workforce • As a Massachusetts employer, your responsibility for making contributions under the PFML depends on the makeup of your workforce. To make sure you're correctly assessed for contributions, it's important that you properly report the size and makeup of your Massachusetts workforce to the Department of Family and Medical Leave. • Your total workforce includes: • All Massachusetts W2 employees (full-time, part-time, seasonal). • All Massachusetts 1099-MISC contractors. • You'll always report on your total workforce numbers, but you're only responsible for submitting contributions on behalf of members of your workforce who are treated as covered individuals for the purposes of the PFML law.
Counting Covered Individuals in Your Workforce cont. • W2 employees will always count as covered individuals • 1099-MISC contractors count toward your total number of covered individuals only if they make up more than 50 percent of your total workforce (W2 employees and 1099-MISC contractors combined) • Reminder: a contractor is considered a 1099-MISC contractor if you paid them at least $600 in the tax year
Covered Individuals – Independent Contractors • IRS –Three Categories Behavioral Control – Does the employer control or have the right to control what the worker 1. does and how the worker does his or her job? Financial – Are the business aspects of the worker’s job controlled by the payer? 2. Type of Relationship – Are there written contracts or employee type benefits (ie pension plan, 3. insurance, etc)? Will the relationship continue and is the work performed the key aspect of the business? • Massachusetts Three-part Test Is done without the direction and control of the employer; AND 1. Is performed outside the usual course of the employer’s business; AND 2. Is done by someone who has their own, independent business or trade doing that 3. kind of work
• More than 50% of your workforce was made up with covered subcontractors so Scenario 1 : they are included in your count. 1 Employee • You must remit contributions for all 3 2 Sole Props covered individuals but your total is under 25 so you are not required to pay the employer share.
• Less than 50% of your workforce was made up with covered subcontractors so Scenario 2 : they are NOT included in your count. 24 Employees • You must remit contributions for the 24 4 Sole Props employees but your total is under 25 so you are not required to pay the employer share.
• More than 50% of your workforce was made up with covered subcontractors so Scenario 3 : they are included in your count. 40 Employees • You must remit contributions for all 123 83 Sole Props covered individuals and your total is over 25 so you are required to pay the employer share.
FAQ: • Yes! Because you have 0 employees and pay “x” number of subcontractors, your My company does not subcontractors are considered “covered run payroll but I pay individuals” and because they make up more than 50% of your payroll, you are subcontractors, does required to pay the tax on their behalf. this law apply to me?
FAQ: • Collect W-9s for each sub to determine How do I determine their entity type. You only need to which subs need to be collect tax for Sole Proprietors. paid?
Who Pays? • If you have 25 employees or more… • Employer will be required to remit a contribution to the Department of Family and Medical Leave of 0.75% of eligible payroll. • This contribution can be split between employee payroll deductions and an employer contribution and will support both types of leave. • Family Leave : (0.13 percent) - Up to 100% of the family leave contribution can be deducted from employee’s wages • Medical Leave : (0.62%) Up to 40% of the medical leave contribution can be deducted from employee’s wages. Employers are responsible for the remaining 60%.
Who Pays? • If you have less than 25 Employees… • Employers must remit contributions to the Department of Family and Medical leave but are not responsible for remitting the employer’s share • Family Leave : Up to 100% of the family leave contribution can be deducted from employee’s wages. • Medical Leave : Up to 40% of the medical leave contribution can be deducted from employee’s wages. Employers are not responsible for the remaining 60%. The Employer can choose to contribute if they wish.
• COMPLIANCE IS CONSIDERED THE EMPLOYER’S EMPLOYER RESPONSIBILITY! • Note that EMPLOYERS are responsible for remitting the full LIABILITY 0.75% contribution to the state paid leave fund, including both the employee portion withheld through payroll deductions and any required employer portion ___________ • So even if your business is not required to make any employer contribution, it is ultimately your responsibility to make sure the correct amounts are remitted to the state. PENALTIES • Failure to make the required contributions will result in a penalty to the employer of 0.75% of an employer’s total annual payroll for each year of compliance (or fraction thereof).
What can PFML benefits be used for? • Family Leave (12 weeks with exception): • Bond with child during first 12 months after birth or after placement for adoption or foster care • Qualifying exigency arising out of active duty or notification of impending call or order to active duty of a family member • To care for a family member who is a covered service member (26 weeks) • To care for a family member with a serious health condition
What can PFML benefits be used for cont. • Medical Leave (20 weeks): Serious health condition of: • Covered employee • Spouse • Domestic Partner • Child • Parent, Parent of Spouse, Parent of Domestic Partner • Person who stood in loco parentis to the employees when he/she was a child • Grandchild • Grandparent • Sibling *Bolded text indicates an addition from federal FMLA
Yes, when a benefit claim is filed, such claim SHALL include a certification supporting a request for leave Is Certification deadline is 90 certification calendar days after the start of leave required? More guidelines to come on this before 2021
First seven days of leave are not paid – employee can use accrued sick or vacation or other PTO for those days Other Employee (other than self-employed or former) shall be restored to previous position or equivalent position Provisions Employer cannot compel the employee to exhaust any sick, vacation or personal time prior to or during leave but no double dipping by employee to Note Notice by employee should be at least 30 days prior to leave or as soon as practicable if delay is for reasons beyond the employee’s control Administrative review available to employee, an employee can appeal the denial of leave to The Department of Family and Medical Leave
• Yes, employers can apply to the Department of Family and Medical Leave to opt out of Can employers the statutory leave obligations if they have a private plan opt out of MA • Insured plan with an approved insurer PFML? • Self insurance requires a bond
Recommend
More recommend
