In this article, we’ll take a close look at Massachusetts’ paid family leave law (PFML). Starting January 1, 2021, all employees – including W-2 and 1099 contractors – are eligible to receive job-protected leave for their own health condition, or to care for a seriously ill family member.
PFML is funded through premiums withheld from paychecks by both employers and covered individuals, administered by the Department of Family and Medical Leave. Square Payroll supports MA PFML with premium calculations, withholdings and payments for covered individuals.
Coverage Options
Massachusetts’ paid family leave (PFML) program offers wage replacement benefits to workers who need to take time off of work for a wide variety of reasons. These benefits are paid for by a payroll tax on both employers and employees.
Employers can choose from a number of coverage options under ma paid family leave, including the state plan or private plans. The state plan has minimum requirements, but private plans must be equal or more generous than the state plan and must not cost employees more in terms of their maximum employee contribution.
Unlike federal FMLA, MA PFML provides workers compensation for leave due to medical and/or family situations. These include the need to bond with a new child, address a military exigence and/or provide care for a seriously ill family member.
Employers can self-insure or purchase fully insured private plans from a carrier like MetLife or ShelterPoint*. The Hartford also offers administrative services for private plans on a self-insured basis.
Employer Contributions
The state of Massachusetts provides paid family leave, which means employees can take time off to care for their sick or injured family members. This is available for both full-time and part-time workers, as well as self-employed individuals or those who work on a 1099-NEC contract.
Employers with 25 or more covered individuals must contribute 0.63% of eligible wages to the PFML trust fund on behalf of their employees, a portion of which is split between medical leave and family leave. For employers with fewer than 25 covered individuals, the contribution rate is 0.318%, with 0.11% of eligible wages for family leave and up to 0.208% for medical leave.
To calculate the contributions, you must count your workforce and then set up payroll deductions for the contributions to be deducted from each employee’s wages. Detailed information about the contribution rates can be found on the Updates for 2023 page.
Exemptions
As a Massachusetts employer, you have several options to meet your obligations under the state’s new paid family leave law. You can either contribute to the state’s PFML Family and Employment Security Trust Fund or offer an approved private plan that meets certain criteria.
To make the most of your coverage options, you must first determine if you qualify for a paid family leave exemption from the Massachusetts Department of Paid Family and Medical Leave (DFML). If you do, you will be able to avoid making contributions to the PFML Family and Employment Security Trust Fund.
The DFML will pay you a benefit for up to 26 weeks of job-protected leave, based on your average weekly wages. You may take the entire 26 weeks of leave at once or split it into multiple periods over the course of a year. You can also choose to receive partial income replacement during your leave.
Reporting Requirements
In Massachusetts, employers must report wages and hours worked every quarter for their employees who are covered by the state-offered paid family leave benefit program. Premiums are based on this information and must be paid by the end of the following month after the quarter is completed.
In addition to requiring quarterly reporting, the program requires employers to contribute to the Paid Family Leave Implementation Fund through a payroll tax. This tax is a 0.75% of employee wages paid and is similar to the unemployment insurance tax.
Employers must submit their reports to ESD through an online portal. If a third-party employer agent will be submitting reports on your behalf, you must provide them with a power of attorney.
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