Important Updates To Massachusetts Paid Family And Medical Leave
The Massachusetts Paid Family and Medical Leave (“PFML”) Act (the “Act”) provides job protection and partial salary replacement for Massachusetts employees who take family or medical leave for certain qualifying exigencies. Until now, this has meant that most employees who take PFML leave receive a benefit amount during their leave that is less than their normal rate of pay.
A recent change implemented by the Massachusetts Department of Family and Medical Leave (“DFML”), which administers the Act, will allow employees who choose to do so to supplement (or “top off”) their PFML benefits by using other accrued, unused paid time off to supplement the partial salary replacement.
The DFML also released the increased maximum weekly benefit amount and contribution rates that will go into effect at the beginning of 2024.
“Topping Off” PFML Benefits With Accrued Paid Leave
Effective November 1, 2023, all employees are now permitted to “top off” their PFML benefits during PFML leave with any available accrued paid time off, which includes sick time, vacation time, personal time, and/or other paid time off provided by their employer (collectively, “PTO”). Existing PFML leaves that were filed before November 1, 2023, are not eligible to be topped off under this new DFML policy.
Previously, employees whose employers participate in the state-run program could not supplement their PFML benefits with PTO, though they were permitted to use other PTO to receive pay during the required seven-day waiting period between the beginning of their leave and the date when they begin to receive PFML benefits. Only employers that provide PFML under private insurance plans (permitted as an option under the Act) could allow employees to “top off” their PFML benefits. Now, all Massachusetts employers, regardless of whether they are enrolled in the state-run program or a private insurance plan, are required to offer this option and allow employees to “top off” their PFML benefits with accrued PTO.
Employees are permitted – but not required – to “top off” PFML benefits with PTO. If an employee chooses to use their available PTO to “top off” their PFML benefit, the employee may do so in an amount that brings them up to 100% of their Individual Average Weekly Wage (“IAWW”). An employee’s IAWW is calculated using the amount the employee earned in the last four completed calendar quarters before the start of the employee’s benefit year. An employee’s IAWW is the average amount the employee earned per week in the two quarters when the employee earned the most money (or the one quarter with the most money if the employee worked in two or fewer quarters). Employers enrolled in the state-run program can find the employee’s weekly benefit amount and IAWW located on the DFML’s PFML Approval Notice.
If an employee chooses to use their available PTO to “top off” their PFML benefits, it is the responsibility of the employer, and not the DFML, to determine the amount of PTO that may be used without exceeding the employee’s IAWW. To do this, an employer must subtract the amount of the weekly PFML benefit received by the employee from the employee’s IAWW. The difference will determine the maximum amount that can be paid out using the employee’s available PTO. An employer is responsible for paying out PTO used to “top off” PFML benefits in accordance with the employer’s policy.
PTO must be paid at the employee’s regular hourly rate at the time of the absence. If an employee chooses to supplement their weekly PFML benefit with available PTO, the employee’s weekly PFML benefit will not be impacted, and the amount of PTO used to “top off” the PFML benefits does not need to be reported to the DFML.
Employees may not use PTO to receive more than their IAWW during a PFML leave. Therefore, if an employer allows an employee to use an amount of PTO that results in the employee's receiving a total amount that exceeds the employee’s IAWW, it is the responsibility of the employer to recoup those funds. Employers will not be reimbursed by the DFML for any overpayments.
Updated Maximum Weekly Benefit Amount
The maximum weekly cash benefit amount provided to individuals under the Act is adjusted annually by the DFML, and is calculated as a percentage (64%) of the average weekly wage of Massachusetts workers.
Due to recent increases in Massachusetts’s average weekly wage, effective January 1, 2024, the maximum amount that an eligible employee will be entitled to receive in PFML benefits will increase from $1,129.82 to $1,149.90 per week.
Updated Contribution Rates
PFML benefits are funded through employer and employee contributions. The required contribution rates are also set annually by the DFML.
Effective January 1, 2024, the contribution rate for employers with 25 or more covered individuals will increase from 0.63% to 0.88% of eligible wages. The 0.88% contribution rate is split between a medical leave contribution of 0.70% and a family leave contribution of 0.18%.
Similarly, the contribution rate for employers with fewer than 25 covered individuals will increase from 0.318% to 0.46% of eligible wages. The 0.46% contribution rate is split between a medical leave contribution of 0.28% and a family leave contribution of 0.18%.
The proportion of PFML contributions that those different categories of employers may withhold from employees’ wages will not change. Employers may still withhold up to 100% of the family leave contribution from employees’ wages. Employers with 25 or more covered individuals may also still withhold up to 40% of the medical leave contribution from employees’ wages, while employers with fewer than 25 covered individuals may withhold up to 100% of the medical leave contribution from employees’ wages.
These new contribution rates apply equally to all employers regardless of whether they have approved private insurance plans or are enrolled in the state-run program.
All employers are required to provide written notice outlining PFML benefits, contribution rates, and other provisions as detailed in the Act, to new employees within thirty (30) days of their start date. This notice may be provided in paper form or electronically. The notice must include an option for the employee to accept or decline receipt of the information. All new employees are required to return a signed form to their employer in either paper form or electronically.
Each year, employers are required to provide written notice to all current employees of the contribution rate changes at least thirty (30) days in advance of the effective date. Rate change notices do not need to be signed by employees and may be provided electronically.
Employers are also required to post the official PFML workplace poster in a prominent location or to distribute it electronically. The poster must be available in English and each language which is the primary language of five or more individuals in the employer’s workforce.
The DFML provides template notice forms and the workplace poster on its website. The updated documents to reflect these recent changes are currently available on the DFML website.
In light of these updates, we recommend that employers:
• Update their PFML and other leave policies to reflect the “topping off” change;
• Ensure that their payroll systems incorporate the updated contribution rates;
• Distribute rate change notices to current employees;
• Display (or distribute electronically) the updated workplace poster; and
• Review and update their processes for PTO tracking.
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If you have questions about these changes and updates or need assistance updating your policies, notices, or practices related to Massachusetts Paid Family and Medical Leave, please feel free to contact one of our experienced employment lawyers.