On June 28, 2018, a billwas signed affecting all employers in the Commonwealth of Massachusetts by creating a paid family and medical leave program funded by a state payroll tax.
Employer and covered individuals obligations to the program will begin on July 1, 2019, however the individual eligibility will not begin until January 1, 2021. A covered individual can be either W-2 employee or 1099 contractor.
Beginning in 2021, eligible individuals will be allowed to take the following job-protected leave in a benefit year:
up to 12 weeks of paid family leave
up to 20 weeks of paid medical leave
up to 26 weeks of paid family leave to care for a covered service member
All businesseswith one or more employeesare required to comply with PFML, with the exception of self-employed individuals. Self-employed individuals are allowed to opt into PFML.
To be eligible to claim the benefit, individuals must meet the financial qualifications for receiving unemployment compensation under Massachusetts state law. All individuals in the workforce must contribute, regardless of eligibility.
Covered individuals must provide employers with at least 30 days notice of anticipated start date of leave, length and type of leave, and anticipated return date. A claim for these benefits must be filed with the Department of Family and Medical Leave using approved forms. All PFML benefits require a minimum level of certification supporting the need for leave.
Employers with 25 or more employees will be required to remit a contribution of 0.63% of eligible payroll. This amount will support both types of leave.
The payroll tax of 0.63% that will fund the PFML program will apply to the first $132,900 of an employee's annual earnings. The allocation of this percentage will be determined annually by the Department of Family and Medical Leave.
Of the total 0.63% payroll tax: 0.52% of payroll deductions will be allocated towards medical leave, 0.11% will be allocated towards family leave contributions.
Family Leave:Up to 100% of the family leave contribution can be deducted from employee wages
Medical Leave:Up to 40% of the medical leave contribution can be deducted from employee wages. Larger employers are responsible for contributing the remaining 60%.
Employers with fewer than 25 employees must remit contributions, but are not responsible for remitting the employer's share.
Employers with 25 or more Employees
Employers with fewer than 25 Employees
Reporting and Calculating
Beginning on July 1, 2019, each calendar quarter, employers will be required to file an earnings report and remit contributions through the Department of Revenue's MassTax Connect system. On-Time Payroll will remit and file these contributions on our clients' behalf once employers provide the necessary information regarding their workforce.
***UPDATE*** Deduction for PFML has been delayed until October 1st, 2019.
What you need to do:
Employer Check List
Determine the size of your workforce
Determine contribution amount for Family and Medical Leave
Provide written notice to all individuals in your workforce + collect a signed acknowledgement from each individual
Post the Paid Family and Medical Leave poster at your workplace
Notify On-Time Payroll with size of your workforce, contribution amount, or, if you have applied for exemption
Step 1: Determine the size of your workforce.
Workforce includes all full-time, part-time, seasonal, and temporary employees, as well as all independent contractors during each pay period.
Workforce countis determined by using different methods to calculate annual workforce averages for employers and businesses that employ W-2 employees and/or 1099 independent contractors.
There are a couple of steps involved in finding the size of your workforce.
1. First, determine the # of W-2 employees per pay period in 2018 and/or
Determine the # of 1099 contractors per pay period in 2018.
2. Calculate the Average # of EEs + Average # of 1099s
To find the average:
ADD # of Employees every pay period and DIVIDE by Total pay periods in a calendar year.
ADD # of Contractors every pay period and DIVIDE by Total pay periods in a calendar year.
Weekly: 52 pay periods per year
Bi-Weekly: 26 pay periods per year
Semi-Monthly: 24 pay periods per year
Monthly: 12 pay periods per year
Step 2:Determine the contribution for Family and Medical Leave.
The employer share of the contribution is based on the size of their workforce.
After workforce size has been calculated, the employer is ready to plug the numbers into the Contribution Calculator.
1. Average W-2 workers + Contractors less than 25 (contractor less than 50% of the total)
Only W-2 workers are covered, Employer not liable
2. Average W-2 workers + Contractors less than 25 (contractor more than 50% of the total)
Both W-2 workers and Contractors are covered, Employer not liable
3. Average W-2 workers + Contractors more than 25 (contractor less than 50% of the total)
Only W-2 workers are covered, Employer liable if total # of W-2s are greater than 25, not liable if less than 25
4. Average W-2 workers + Contractors more than 25 (contractor more than 50% of the total)
Both W-2 workers and Contractors are covered, Employer is liable
Step 3: Provide written notice to all individuals in your workforce and collect a signed acknowledgement.
Prior to sending out the workforce notification, it is necessary for employers to choose whether they are going to contribute more than 60% for medical leave and more than 0% for family leave.
Note: Employers with more than 25 employees will be required to cover at least 60% of the employer's share of medical leave. Employers with less than 25 employees will not be required to contribute, but may opt to do so.
The purpose of the notice is to outline how much the employer is going to contribute. The form requires employers to notify employees the amount of this contribution and the deduction from employee earnings.
Is the employer going to contribute more than the required 60% for Medical Leave?
Is the employer going to contribute more than 0% for Family Leave?
The notice of contributions, benefits, and workforce protections must be provided to all individuals in your workforce.
The deadline to send out the notice is prior to June 1st, 2019.
A signed acknowledgement must be collected from each individual.
For your convenience, the notice is available in 13 different languages:
This may be provided electronically, and must include the opportunity for the individual to acknowledge receipt or decline to acknowledge receipt of the information. The employer can receive these acknowledgments in paper form or electronically. The notice must be issued to each employee within 30 days of their first day of employment and must be written in the employee's primary language.
Failure to provide the required notification may result in the following fines:
First violation: $50 per W-2 employee or 1099-MISC contractor
Subsequent violations: $300 W-2 employee or 1099-MISC contractor
Due to extremely high call volumes, we strongly encourage all clients to email us at email@example.com for the best support and service. Alternatively, you may contact the Department of PFML directly, by using this form.