Under the Massachusetts Family and Medical Leave Act, the Executive Office of Labor and Workforce Development was required to issue regulations by March 31, 2019. However, it appears that the Office has missed the deadline. Rather than final regulations, the Office issued revised draft regulations on March 29.
Over the last two months, the Office has held public listening sessions throughout the Commonwealth to gauge the public’s response to the initial draft regulations issued in January. The revised draft regulations add significant (and rather lengthy) clarifications for employers and employees:
“Massachusetts covered individuals”
Only “Massachusetts covered individuals” are entitled to benefits under the Act. The revised regulations clarify that an individual would be considered a “Massachusetts covered individual,” and therefore entitled to benefits, with respect to services provided by him or her if any one of the following criteria apply:
- The service is performed entirely in Massachusetts.
- The service is performed both inside and outside Massachusetts, but the service performed outside Massachusetts is “incidental.”
- The service is not localized in any state, but some part of the service is performed in Massachusetts, and
*The individual’s base of operations is in Massachusetts, or
*The place from which the service is directed or controlled is in Massachusetts.
- The individual resides in Massachusetts and the individual’s base of operations, or the location from which the services are directed or controlled, is not the same as the state in which at least part of the services are performed.
“Covered contract workers” and financial eligibility
Perhaps the most glaring ambiguity in the January draft concerned the treatment of self-employed individuals and independent contractors. Fortunately, this topic was addressed head-on in the revised draft. The revised proposal would clarify that a “covered individual” includes all “covered contract workers.” A covered contract worker would be defined as an individual (1) for whom at least one entity is required to make contributions to the Leave Trust Fund; and (2) whose payments from the entity “satisfy the financial eligibility test as if the covered contract worker were an employee.” Employers and covered business entities are required to remit contributions to the Trust Fund for all covered contract workers.
The latest draft now includes a financial test to determine whether an individual is eligible for benefits. This “financial eligibility test” is defined as “a demonstration that, over the 12 months preceding an individual’s claim for benefits, the individual has received total wages as an employee or payments for service as a covered contract worker from a Massachusetts employer or a Massachusetts covered business entity that in the aggregate equal or exceed 30 times the individual’s weekly benefit amount” and which “in the aggregate are not less than $4,700.”
Covered business entities
Each year, an employer or business would be required to analyze its status as a covered business entity. The process for doing so would be as follows:
First, the entity counts the total number of self-employed individuals for whom it was required to report payment for services on IRS Form 1099-MISC during every pay period in the prior calendar year.
Second, the entity calculates its total workforce by adding those self-employed individuals to its total number of employees during the same time period.
Third, the business divides the total number of self-employed individuals from step 1 by the total workforce from step 2 to get a percentage. If more than 50 percent of the workforce is composed of self-employed individuals for whom services were required to be reported on IRS Form 1099-MISC, “the business or trade is a covered business entity, and the self-employed individuals who contract with the trade or business are covered contract workers.”
Average total workforce count for covered business entities
According to the revised regulations, covered business entities would have to calculate their total average workforce just like any other employer, except that they would have to include the number of self-employed individuals for whom they are required to report payment on IRS Form 1099-MISC in addition to the total number of full and part-time employees, divided by the number of pay periods.
Deductions from wages
The revised proposed regulations would explicitly allow covered business entities to make the same Trust Fund withholdings from service payments to covered contract workers that are made from employees’ wages. The revisions would also clarify that employers who opt not to deduct the maximum amount from employees’ wages are still required to pay the full contribution to the Trust Fund. Employers who are assessed a charge by the Office of Labor and Workforce Development for failure to make required contributions would not be allowed to recoup the charges from employees’ wages, or from payments to covered contract workers.
Calculating leave allotments for employees who work variable hours
The revised regulations would clarify how to calculate leave for employees with a fluctuating schedule. For any such employees, “a weekly average of the hours scheduled over the 12 months prior to the beginning of the leave period will be used for calculating the leave entitlement.”
As with the federal Family and Medical Leave Act, employers would be allowed to require that employees returning to work after leave under the Massachusetts law get a fitness-for-duty certification from a health care professional. Certifications would be allowed only where the leave was occasioned by the employee’s own serious health condition and where the employer’s policy requiring certification applied uniformly to all similarly-situated employees. The proposed regulations further provide that
- Fitness-for-duty certifications may be sought only for the “particular health condition that caused” the employee’s leave; and
- If the employer intends for the certification to address the employee’s ability to perform the essential functions of the job, the employer must give the employee “a list of the essential functions of their job within 5 days of the notice to the employer of the designation of leave by the Department [of Family and Medical Leave of the Executive Office of Labor and Workforce Development] and must indicate that the certification” is required to cover the essential job functions.
If the employer provides the required notice, it would be allowed to delay an employee’s return to service until he or she provides the appropriate return-to-work certification.
Certifications could be sought at least once every 30 days “if reasonable safety concerns exist regarding the employee” because of “the serious health condition for which they took leave.” Employers would not be allowed to require fitness-for-duty certifications for “each absence taken on an intermittent or reduced leave schedule.”
Reductions to weekly benefit amounts due to other wage replacement programs
The revised regulations would clarify that “unless the aggregate amount a covered individual receives would exceed the covered individual’s average weekly wage, the weekly benefit amount for a period shall not be reduced” by amounts that the individual receives from the employer’s temporary disability policy or paid family or medical leave policy. Employers who make payments equal to or greater than the amount required under the law “shall be reimbursed from the trust fund by the Department.”
Interaction with employer-provided paid leave
Employers with other paid leave programs would be allowed to offer employees the choice to use accrued paid leave in lieu of applying for benefits with the Department. Before an employee elects to substitute paid time off for statutory leave benefits, the employer would have to inform the employee that the use of any paid leave benefits will run concurrently with family and medical leave. The revision would make clear that employees are not allowed to “double dip.” If an employee received paid leave from the employer, the employee would not be eligible to receive paid leave benefits under the law. Where an employee elects to use paid time off in lieu of statutory benefits, the revision would require the employee to follow the employer’s customary processes related to the use of leave.
Intermittent leave schedules and impact on leave allotment
The revised proposed regulations elaborate on employers’ obligations to schedule employees’ intermittent leave. With respect to employees on leave to bond with a child, intermittent leave would be allowed only with the employer’s consent. For employees on leave to care for a relative’s serious health condition, to care for a covered service member, or to tend to the employee’s own serious health condition, intermittent leave would be required only where the employee’s health care provider deems it medically necessary. Employees requesting intermittent leave to care for their own serious health conditions would be required to “advise the employer, upon request, of the reasons why the intermittent/reduced leave schedule is necessary and of the schedule for treatment, if applicable.”
Intermittent leave would be permitted for qualifying exigencies arising out of the active duty military service of the employee’s relative.
Weekly benefits would be prorated for employees who take intermittent/reduced schedule leave. The revised regulations provide the following example: “[I]f an employee or covered individual who would otherwise work 40 hours a week takes eight hours of intermittent leave in a week, that leave would count as one-fifth (1/5) of a week of leave.”
Continuing treatment by a health care provider
The revised regulations contain an extensive definition for “continuing treatment by a health care provider.” The list is non-exhaustive but includes the following:
- A period of incapacity of more than three consecutive, full calendar days, and any subsequent treatment or period of incapacity relating to the same condition, that also involves (i) treatment two or more times, within 30 days of the first day of incapacity, by a health care provider unless extenuating circumstances exist; or (ii) treatment by a healthcare provider on at least one occasion which results in a regimen of continuing treatment under the healthcare provider’s supervision (not including routine physical exams, eye exams, or dental appointments). In all cases, treatment must be in person, and the first in-person treatment must take place within seven days of the first day of incapacity.
- A chronic condition, defined as a condition requiring treatment by a health care provider at least twice a year, that continues over an extended period of time, and that may cause episodic rather than a continuing period of incapacity (such as asthma, diabetes, or epilepsy).
- Permanent or long-term conditions for which treatment may not be effective, such as Alzheimer’s, a severe stroke, or the terminal stages of a disease.
- Conditions requiring multiple treatments by a health care provider, including any period of recovery, for restorative surgery after an accident or injury, or a condition that if untreated would be likely to result in a period of incapacity of more than three consecutive, full calendar days (such as cancer, severe arthritis, or kidney disease).
- Absences because of incapacity related to pregnancy, prenatal care, or chronic conditions.
The regulations would also clarify that cosmetic treatments are not serious health conditions “unless inpatient hospital care is required or unless complications develop.”
Although the Massachusetts act required regulations to be issued by March 31, the revised regulations are still in draft form and must go through the customary public comment period. According to its website, the Department of Family and Medical Leave says that it will hold two or more public hearings beginning in May.
The public is encouraged to provide feedback on the draft regulations via the Department’s website. After two rounds of draft regulations, it is still unclear when the final regulations will be published. Although the website says that the Department “expect[s] to promulgate the final regulations” before July 1 – the date on which employers are required to begin collecting trust fund contributions – employers no doubt hoped to have had definitive guidance by now.