Massachusetts Delays Start Date for Paid Employee Leave Program

The purpose of the delay is to give employers more time to prepare for introduction of the paid leave program. Employers will be affected in the following ways by the new date:

1. Withholding of Contributions. Employers will begin withholding paid leave contributions from employee pay on October 1st instead of July 1st. Employers must remit the combined employee and employer contributions by January 31, 2020 for the quarter beginning October 1 and ending December 31. Employers will still remit their contributions through the MassTaxConnect system   
2. Increase in Contribution Percentage. The combined employer/employee contribution rate will increase from .63% of employee wages to .75%. Allocation of the new contribution rate between medical and family leave has not yet been determined. The purpose of the increased rate is to ensure that sufficient funds will be available on January 1, 2021 when employees become eligible to collect benefit payments. 
3. Private Plan Applications. The deadline to apply for a private plan exemption has been extended. Employers have until December 20, 2019 to submit private plan applications to the Department of Family and Medical Leave (Department). An employer that receives private plan approval will be exempt from submitting medical and/or family leave contributions to the Department for a year beginning October 1, 2019. Private plan exemptions must be renewed annually.
4. Employee Notices. The new deadline for distributing individual employee notices and posting an approved workplace poster is September 30, 2019. The Department will issue a revised approved workplace poster and a revised template for individual employee notices before that date.
5. Department Regulations. The Department’s recently published final regulations will be effective July 1. The regulations can be accessed here.

Private insurance companies are considering whether to create new employee benefit products that qualify as private paid leave plans. Employers are interested in private insurance initiatives because very few current employee benefits are equivalent to the public paid leave program. As of last week, the Department had received a total of 67 private plan applications.