Changes have been made to the Massachusetts Paid Family and Medical Leave Act, one of which will take effect on November 1.
The PFMLA, which took effect on January 1, 2021, generally provides parents and caregivers the right to receive paid leave when they are unable to work due to a qualifying event, such as the birth of a child or to care for a seriously ill family member. The benefits are paid for by a tax on employee wages, paid by both the employee and the employer. The Massachusetts Department of Family and Medical Leave administers the program, including determining eligibility and benefit amounts, and making payments.
The Department and the Massachusetts legislature have recently made some important changes to the PFMLA:
- Effective November 1, employees can supplement, or “top off,” their weekly benefits with any available accrued paid leave, such as PTO, sick time, vacation, or personal time. Currently, employees are not permitted under the law to use accrued paid leave while receiving benefits from the program. An effect of the current rule is that employees on paid leave generally receive less in benefits, sometimes far less, than their pre-leave weekly pay. The change will allow employees to use accrued paid leave to make themselves whole, until their accrued paid leave runs out. Employers will still be prohibited from requiring employees to use accrued paid leave either before or during their receipt of PFMLA benefits.
Additional guidance from the Department on how to calculate and incorporate accrued paid leave benefits is expected.
- Effective January 1, 2024, the maximum weekly benefit that an eligible employee may receive will be $1,144.90, a slight increase from $1,129.82 in 2023. The maximum weekly benefit is set at 64 percent of the state average weekly wage. Subject to the weekly maximum, an employee’s individual benefits are calculated by adding (1) the employee’s average weekly wage that is equal to or less than 50 percent of the state weekly wage, replaced at a rate of 80 percent, and (2) the portion of the employee’s average weekly wage that is more than 50 percent of the state weekly wage, replaced at a rate of 50 percent.
- Also effective January 1, the tax rate will increase. Previously, for employers with 25 or more covered employees, a combined contribution equal to 0.63 percent of employee wages was required, split equally between the employer and employee. Employers with less than 25 employees were required to contribute 0.318 percent, with the employer responsible for 0.208 percent and the employee 0.11 percent.
Employers with 25 or more employees must now contribute 0.88 percent, with 0.42 percent coming from the employer, and 0.46 percent coming from the employee. The required contribution for smaller employers rose to 0.46 percent: 0.28 percent from the employer and 0.18 percent from the employee.
Employers do not have to participate in the PFMLA program. Employers can instead enroll in or administer their own private paid leave programs, provided the plans have been approved by the state Department of Family and Medical Leave.
Massachusetts employers will need to revise their policies concerning paid family leave in light of the above changes. It is recommended that they consult with counsel in doing so.