Late in the evening on June 11, 2019, Massachusetts Governor Charlie Baker, Senate President Karen Spilka, and House Speaker Robert DeLeo made the following joint announcement delaying by three months the start of payroll contributions to fund the state’s new Paid Family and Medical Leave benefits:
To ensure businesses have adequate time to implement the state’s Paid Family and Medical Leave program, the House, Senate, and Administration have agreed to adopt a three month delay to the start of required contributions to the program. We will also adopt technical changes to clarify the program design. We look forward to the successful implementation of this program this fall.
Prior to the announced delay, which still must be approved by the Massachusetts legislature and signed by the Governor, employers were faced with having to begin making payroll contributions on July 1, 2019, even though employees cannot begin making use of the new leave benefits until January 2021. Those contributions now have been pushed back to October 1, 2019. To ensure that the leave program remains funded at the same level despite the delay, the contribution rate will increase from 0.63% to 0.75% of wages, meaning that employees will experience considerably higher payroll deductions from their paychecks.
The new law provides employees with 12 weeks of paid family leave and 20 weeks of paid medical leave for their own serious health conditions at a rate equivalent to 80% of their wages up to half of the state average weekly wage. Thereafter, the rate falls to 50% of wages. The maximum weekly benefit will be $850. Benefits are paid out of the fund created by employer contributions. Under the law, employers are required to contribute at least 60% toward medical leave but are not required to contribute anything toward family leave. Employers are free to contribute more than the minimum amounts. It remains to be seen whether these amounts will change with the delay.
The delay will also allow the state to clarify issues in the new law regarding intermittent leave, the definition of serious health condition, and how the state law aligns with the federal Family and Medical Leave Act. Hopefully, these and other issues will be addressed in final regulations issued by the Department of Family and Medical Leave, the newly formed state agency responsible for overseeing the new law. Stay tuned for more information as things develop.
The lawyers at Beck Reed Riden are here to assist employers as the new Paid Family and Medical Leave law takes shape.
eck Reed Riden LLP is Boston’s innovative litigation boutique. Our lawyers have years of experience at large law firms, working with clients ranging from Fortune 500 companies to start-ups and individuals. We focus on business litigation and employment. We are experienced litigators and counselors, helping our clients as business partners to resolve issues and develop strategies that best meet our clients’ legal and business needs – before, during, and after litigation. We’re ready to roll up our sleeves and help you. Read more about us, the types of matters we handle, and what we can do for you here.