Breaking the Code: Massachusetts Paid Family and Medical Leave
By: Rachel Speigle Dunnigan, CPA, MSA
Today, October 1, 2019, employers will begin deducting additional payroll contributions from their employee’s wages – a maximum of 0.75% split between employers and employees. This contribution will fund Massachusetts’ new Paid Family and Medical Leave which helps workers more easily take care of themselves and their families without facing financial crises. Since there has been a lot of discussion around this topic and some delays in the contribution period and program, we wanted to bring you the up-to-date information on this law.
Who is eligible?
Employees working for a MA business with 15+ weeks of earnings greater than $4,700 in the last year are eligible for benefits.
What benefits do employees receive under the new law?
Employees may be eligible for up to 20 weeks of paid medical leave per year with a serious health condition that incapacitates them from work.
Coverage also includes up to 12 weeks of paid family leave per year for the birth, adoption, or foster care placement of a child, or for a family member with a serious health condition (for conditions relating to military service, benefits may extend to 26 weeks per year).
In aggregate, individuals are eligible for no more than 26 total weeks of paid family and medical leave in a year.
When is an employee able to qualify for these benefits?
The paid leave benefits don’t start until 2021 – medical leave benefits and family leave for bonding with a new child beginning in January; family leave benefits for family members with serious health conditions in July.
When is an employee able to qualify for these benefits?
The paid leave benefits don’t start until 2021 – medical leave benefits and family leave for bonding with a new child beginning in January; family leave benefits for family members with serious health conditions in July.
I’m an employer, what does this mean for me?
There was a three-month delay from July 1, 2019 for the deductions beginning today for employers to prepare for this change. For businesses with less than 25 employees, the employers do not have to contribute to the state fund (employee-only contributions of 0.378%).
There is also an option to opt-out of the state program, with the state’s permission, if there is a comparable alternative for employees in the private sector. If your business would like to seek this approval, December 20th is the deadline for companies to reach out to the state.
To ensure compliance with the requirements imposed on us by IRS Circular 230, we inform you that any tax advice contained in this communication (including any attachments) is not intended to and cannot be used for the purpose of: (i) avoiding tax-related penalties under the Internal Revenue Code, or (ii) promoting, marketing or recommending to another party any tax-related matter(s) addressed herein.