Employer and employee contributions to PFML program delayed

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The Massachusetts Department of Family Leave recently implemented legislation – passed by the legislature and signed by the governor – to delay the start of employer and employee contributions to the Paid Family and Medical Leave program (PFML) until Oct. 1, 2019.

Current Status

  • The start date for PFML has been pushed back to Oct. 1
  • To address this shortened period for the state to collect funds for the start of the program in 2021; the collection amount is now 0.75% of qualified employee earnings
  • The notice period – for informing employees about their rights under the PFML – has been extended to Sept. 30
  • Employers that have, a more or as generous, a program of paid family and medical leave have until Dec. 20, 2019 to apply for an exemption from the payroll collection
  • The final PFML regulations was posted June 17 on the Department of Family and Medical Leave’s website

The department sent out the following notification on June 14.

The Massachusetts Legislature and the Baker-Polito Administration have enacted legislation to delay the start of employer and employee contributions to the Paid Family and Medical Leave program (PFML) by three months to October 1, 2019.

This delay will allow employers across the Commonwealth more time to prepare their organizations and workforces for PFML. Please read below to see how this delay will affect you and your responsibilities under the law.

Required Withholding Now Starts October 1
The start date for required PFML contributions is now October 1, 2019. On that date, employers must begin withholding PFML contributions from employee qualifying earnings.  Employers will be responsible for remitting employee and (if applicable) employer contributions for the October 1 to December 31 quarter through MassTaxConnect by January 31, 2020.

Contribution Rate Change
The PFML law requires that the Department adjust the contribution rate to offset the shorter period for collections that will result from the three month delay. As a result, the total contribution rate has been adjusted from 0.63% to 0.75% of employee qualifying earnings. This adjustment will ensure that full funding will be in place for the commencement of benefit payments in January 2021.

Timeline Extended for Required Employee Notices 
Employers now have until September 30, 2019, to notify all covered individuals of their rights and obligations under PFML. Check the Department website at mass.gov/pfml in the coming days for updated notices to provide to your workforce.

Timeline Extended for Exemption Applications
Employers that offer paid leave benefits that are at least as generous as those required under the PFML law may apply to the Department for an exemption from making contributions. Employers will now have until December 20, 2019, to apply for an exemption that will excuse them from the obligation to remit contributions for the full period commencing with the October 1 start date.

PFML Regulations Will Be Final and Effective on July 1, 2019
The final regulations will be posted on the Department website at mass.gov/pfml on Monday, June 17, 2019. The regulations will be formally published under the title 458 CMR 2.00 DEPARTMENT OF FAMILY AND MEDICAL LEAVE.

More about PFML
Beginning in 2021, PFML will provide temporary income replacement to eligible workers who are welcoming a new child into their family, dealing with a serious illness or injury, caring for an ailing relative, or dealing with complications resulting from the military deployment of a family member. The program is funded by payroll-based contributions from employers, employees, and certain contract workers.

To learn more about PFML, including information about how this new program impacts your organization, more background on exemptions, and details on contribution levels, please visit mass.gov/pfml.