Mass. Department of Family Medical Leave Decreases Employer Tax Rate and Increases Employee Benefits

Rate Changes

The DFML has published updated tax rate information for 2022. In particular, the new average weekly wage in Massachusetts (based on data relating to all Commonwealth workers) is now $1,694.24 (up from $1,487.78 for Fiscal Year 2021). This increase in the average wage means that beginning January 1, 2022, the maximum weekly benefit amount for PFML will also be increased to $1,084.31 per week (up from $850/week in 2021).
 
Additionally, effective January 1, 2022, for employers with 25 or more covered individuals, the new contribution rate on covered individuals’ wages will decrease to .68% (down from .75% in 2021), broken down as follows:

• Family leave: Up to 100% of the family leave contribution can be withheld from a covered individual’s wages (equal to 0.12% of eligible wages).
• Medical leave: Up to 40% of the medical leave contribution can be withheld from a covered individual’s wages (equal to 0.224% of eligible wages). Employers are responsible for contributing the remaining 60% (equal to 0.336% of eligible wages).

For employers with fewer than 25 covered individuals, the contribution rate on eligible employee wages will be .344% (down from .378% in 2021), broken down as follows:

• Family leave: Up to 100% of the family leave contribution can be withheld from a covered individual’s wages (equal to 0.12% of eligible wages).
• Medical leave: Up to 100% of the medical leave contribution can be withheld from a covered individual’s wages (equal to 0.224% of eligible wages). There is no employer share for employers with fewer than 25 covered individuals.

Employers are advised to update their Paid Family Medical Leave policy and notice accordingly and disseminate them to their employees.

The Annual Report

 The DFML has also released its first annual report, which provides a summary of data on applications for paid leave benefits from January 1 to June 30, 2021 (FY 2021). Highlights from the report include:

• In FY 2021, DFML approved 43,440 applications, with 58.13% of applications relating to medical leave and 41.81% of applications relating to family leave.
• In FY 2021, 9,989 applications were denied. The primary reason for denial was inadequate documentation, followed next by lack of eligibility, most commonly because the individual did not meet the financial eligibility requirements.
• The largest share of applicants for leave were between 30-39 years old, and more than twice as many women applied for leave as compared to men.
• The average weekly wage for DFML applicants was $1,434.52, and the average weekly benefit provided was $705.98 for family leave and $699.00 for medical leave.
• The median amount of time from when an individual submitted an application until they received a decision from the DFML was 17 days. The median amount of time between approval and first payment was 11 days.
• The average duration of leave was 53 days, or 10.7 weeks.
• In FY 2021, DFML paid out a total of $167,915.781.01 in benefits.

 The full report can be found here.

Arent Fox continues to monitor PFML developments and will issue additional alerts as information becomes available.