Several important updates to the Massachusetts Paid Family and Medical Leave law (“PFML”) go into effect on January 1, 2023.
Background on the PFML
Beginning in 2021, the PFML began providing paid family and medical leave benefits to current and, if applicable, former employees of Massachusetts employers. The PFML applies to all Massachusetts employers, regardless of size, and provides employees with leave to address their own serious health condition, to care for a family member with a serious condition, to bond with a new child, to manage needs related to a military deployment, or to care for a family member with a serious health condition who is a member of the Armed Forces. Employers are responsible for sending payroll contributions to the Department of Family and Medical Leave (“Department”), and when an employee qualifies for leave, benefits are paid to the employee by the state. Benefits are determined based on a percentage of an employee’s wages, up to a cap set by the Department. Generally, PFML follows the same eligibility criteria as the unemployment insurance program in Massachusetts.
Of note, though similar to the federal Family and Medical Leave Act (“FMLA”) which was passed in 1993, the PFML is much more expansive. Prior to the passage of the PFML, many smaller Massachusetts employers did not have to consider statutory family and medical leave because the FMLA only applies to employers with more than 50 employees. Moreover, employees only become eligible for FMLA once they have worked for a covered employer for at least 12 months, and for at least 1,250 hours. With the passage of PFML, employers of all sizes must be aware of their obligations under the law.
Revised PFML Contribution Rates for 2023
The PFML contribution rates are set annually. Beginning in 2023, maximum weekly benefits increase from $1,084.31 to $1,129.82 per week, while contribution rates will actually decrease. For employers with 25 or more covered individuals, the employer contribution rate will be lowered from 0.68% to 0.63% of eligible employee wages (composed of 0.52% for medical leave and 0.11% for family leave). Meanwhile, the contribution rate for employers with fewer than 25 covered individuals will decrease from 0.344% to 0.318% (composed of 0.208% for medical leave and 0.11% for family leave). Importantly, for these smaller employers, contributions can be made entirely by the employee.
It is crucial that employers ensure that their payroll systems reflect the revised contribution rates. Employers are also required by law to notify all current employees of the changes in the contribution rates by December 2, 2022 (30 days before January 1, 2023), and all new employees within 30 days of their hire. All notices may be provided in hard copy or electronic form. Model notices and posters can be found at www.mass.gov.
Proposed Changes to the PFML
Governor Baker recently vetoed proposed changes to the PFML that would have allowed employees to “top off” their PFML benefits with accrued paid leave (such as vacation, sick, or other types of leave). The House of Representatives voted to override the veto, but the Senate did not. As a result, the changes have not gone into effect. However, employers should be mindful that the legislature may take this up again once the new session starts in January 2023.
Further, the Department has scheduled a public hearing for December 7, 2022 to discuss proposed amendments to the PFML regulations that would clarify and detail employers’ statutory obligations to maintain health insurance benefits for employees during a PFML leave period.
The current regulation requires that employers “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 that coverage would have been provided if the employee had continued working continuously for the duration of such leave.” The proposed amendment adds a requirement that an employer “continue to provide for, contribute to, or otherwise maintain” the benefits, and goes on to provide examples of ways in which employers could “otherwise maintain” an employee’s health benefits.
Importantly, the proposed amendment clarifies that employers will not be required to provide for, contribute to, or otherwise maintain health insurance benefits for employees who [1] do not receive or are not eligible for such benefits at the time their family or medical leave begins, [2] resign during leave, or [3] are former employees when their leave begins. For example, if an employee resigns before or during the leave period, an employer is not required to maintain health benefits.
As always, employers are advised to work with their employment counsel to ensure that they are up-to-date on the new and proposed changes to the PFML.
