Breaking News! The Baker-Polito administration and Massachusetts legislature enacted promised legislation to delay the start of employee withholdings for contributions to the Massachusetts Paid Family and Medical Leave program (MA PFML) until October 1, 2019.
Employers should not begin withholding employee contributions on July 1, as originally scheduled, but instead should begin withholding on October 1, 2019. Both employee and employer contributions for Q4 of 2019 must be remitted through the MassTaxConnect portal in January, with a deadline of January 31, 2020.
The delay also extends the time for employers to provide the required notice of rights and obligations to all covered individuals until September 30, 2019. Sample notices are available on the MA PFML website.
Employers looking to offer a private plan (which is equal to or more beneficial than the Commonwealth’s PFML plan) have until December 20, 2019, to apply for an exemption that will excuse them from remitting contributions.
In addition, MA PFML regulations became final and effective on June 17, 2019.
Eleventh-Hour Agreement to Delay
Employers and industry gurus following the expanding landscape of paid family and medical leave laws know that it is a race to the finish line when implementing these new mandated benefits.
Recently, the Commonwealth of Massachusetts announced that it would be extending several deadlines for implementing its paid family and medical leave program to allow employers more time to prepare. Due to feedback from employers, industry stakeholders, and the community at large, the governor’s office encouraged the MA legislature to enact a bill that would extend certain statutory deadlines for three months. The legislature recently did just that, resulting in an extension of key dates in the implementation timeline.
Originally, employers were required to begin withholding payroll deductions for employee contributions to the MA PFML program beginning July 1, 2019, unless an employer had submitted and received approval of a private-plan exemption. By delaying the start date for employee and employer contributions by three months, the amount of the payroll tax will increase from 0.63% to 0.75% of wages. This increase in the premium amount is deemed necessary to fully fund the program in advance of the start of benefits on January 1, 2021.
The June 30, 2019 deadline for employers to post the required workplace poster and provide written notice regarding MA PFML to covered individuals have been similarly extended by three months. Employers now have until September 30, 2019, to comply with those notification requirements.
What Should Employers Do?
Employers should continue to discuss with their internal counsel and benefits consultants to determine whether a private plan or state plan option is best for their employees and prepare to make the necessary deductions accordingly. If going with the state plan, employers must begin withholding employee contributions on October 1, 2019, and then remit both employer and employee contributions to the Commonwealth no later than January 31, 2020. Be sure to instruct your payroll folks that the amount of the deduction has increased to 0.75% of wages. Employers also should prepare to post the workplace poster and provide written notices to employees (collecting written acknowledgment of receipt from each employee) by the new September 30, 2019 deadline.
What Is ReedGroup Doing?
ReedGroup will continue to track the MA PFML implementation process and will communicate any changes or upcoming deadlines. We are also working to finalize our Massachusetts Paid Family and Medical Leave product offering. If you have employees in Massachusetts and need to discuss how to address MA PFML, reach out to your ReedGroup account executive or our sales team for more info here!