Seyfarth Synopsis: Earlier yesterday, the Department of Family and Medical Leave (DFML) issued its final regulations for the Massachusetts Paid Family and Medical Leave (PFML) Law. While the final regulations do not contain many substantial changes from the March 29, 2019 proposed regulations, there are a number of noteworthy changes and clarifications. Separately, the DFML also released new template worker notice forms, due to be distributed by September 30, 2019, and posted clarifying information for those employers that already distributed notices to their workers.
DFML’s New Notice Forms And Addendum For Employers That Already Issued Notices
Although not part of the final regulations, we wanted to alert our readers that the DFML has posted updated template notice forms. The English version for employers with 25 or more covered workers can be accessed
here; and the English version for employers with fewer than 25 covered workers can be accessed
here. The DFML also announced on its website that if an employer provided written notices to its workforce prior to the July 14 delay announcement, the employer will need to provide covered workers with an addendum sheet explaining the updated program dates and contribution rates. A template of this addendum will be provided by the DFML this week.
Noteworthy Highlights From Final Regulations
The final regulations will go into effect on July 1, 2019. They will be codified at 458 CMR 2.00 and may be accessed
here. While this summary is not meant to capture all changes between the proposed regulations and the final regulations, we highlight the changes and clarifications most noteworthy to employers.
- The regulations adopt the October 1, 2019 contribution start date and the initial 0.75% contribution rate we reported yesterday, here.
- The final regulations clarify that the statutory exclusions from the definition of “employment” set forth in the Massachusetts unemployment statute (M.G.L. ch. 151A, § 6) also apply to the PFML Law. For example, service performed by a student in the employ of a school, college, or university, who is also enrolled in that school, is not covered by the PFML Law.
- The final regulations confirm that employers may deduct different percentages from the wages of different groups of covered workers, provided that the deductions do not exceed the maximum percentages set by the PFML Law. For example, employers may deduct a greater percentage of the family leave or medical leave contribution from exempt employees than deducted from non-exempt employees. Likewise, employers may deduct a greater percentage from its non-unionized workers than from its unionized workers (depending on its collective bargaining with the union).
- The final regulations permit employers to require intermittent leave to be taken in increments not smaller than a designated minimum time period, provided that the minimum period does not exceed four consecutive hours. Employers should be sure to include this requirement in their paid family and medical leave policies. The final regulations also clarify that the initial seven-day waiting period for intermittent leave or reduced schedule leave is seven consecutive calendar days, not the aggregate accumulation of seven days of intermittent leave.
- The final regulations clarify that employers’ quarterly reports to the State do not have to report earnings of 1099-MISC contract workers unless the contract worker has elected coverage under the public PFML program, or if the employer is a covered business entity (i.e. more than 50% of the employer’s Massachusetts workforce is comprised of 1099-MISC contract workers).
- With respect to job protection and reinstatement requirements, the final regulations have added an exception for employees who are hired for a specific term or only to perform work on a discrete project. In those situations, if the employment term or project is over and the employer would not have otherwise continued to employ the employee, the employer does not need to reinstate the employee after leave. This is an important clarification for staffing industry employers.
- Several of the final regulations’ key revisions and clarifications pertain to private plans, including:
- If an employer has applied for and received approval for a private plan exemption and subsequently fails to maintain or renew its private plan exemption prior to January 1, 2021, the employer may be responsible for retroactive contributions to the public Trust Fund. The regulations do not clarify whether employers will be responsible for retroactive contributions if they fail to renew a private plan after January 1, 2021.
- An employer may apply for a private plan exemption only once per quarter.
- The final regulations establish a three-year record keeping requirement for employers with approved private plans with respect to any records relating to the plan, including those relating to PFML benefits claims under the plan.
- The final regulations adopt a provision allowing the DFML to waive or modify any penalty imposed under the PFML Law for an employer’s failure to make the required contributions if the employer can make a showing of good cause.
- The final regulations clarify that it will refund contributions to an employer that overpays its contributions.
- The DFML has clarified that the DFML may contact a covered worker’s health care provider directly for clarification or authentication of a certification form when necessary.
Please note that the mandatory poster is still required to be posted by July 1, 2019. Otherwise, with the regulations now final and the various dates and deadlines set, businesses can now finalize their decision-making and preparation for the September 30th notices and the October 1st commencement of payroll deductions. For our prior reports on the PFML Law and the proposed regulations, you may refer
here.
