Last year, Massachusetts passed the Massachusetts Paid Family and Medical Leave Act (PFML).
The law entitles all Massachusetts employees and some independent contractors paid family leave of up to 12 weeks to care for a family member and paid medical leave of up to 20 weeks for a non-work-related injury or illness. (Read more about paid leave in Massachusetts here.)
The law benefits employers and employees who may need to take leave for the above reasons. The benefit is shared, which means employers and employees each pay a portion of the premium. But the onus is on employers to adhere to the law and to understand the benefits available.
Benefits don’t go into effect until January 1, 2021, but Massachusetts business owners should educate themselves on the law now. They can start paying premiums for Massachusetts Paid Family Medical Leave as early as this month.
Massachusetts business owners can privatize benefits under the Massachusetts Paid Family and Medical Leave Act, gaining personalized service and better rates. By law, private benefits must be as good – or better – than the state-funded plan.
Business owners should not go it alone. DBL Center and its vast network of brokers can help business owners understand the advantages of privatizing PFML coverage for cost savings and better service.
The new law applies to all the employers and businesses with more than one Massachusetts employee, though with limited exception.
The law covers:
Premium payments, often a combination of employer and employee contributions, depend upon the makeup of the company’s workforce.
To ensure an accurate premium bill, Massachusetts business owners should ensure they are correctly reporting the size and makeup of their workforce in Massachusetts to the Department of Family and Medical Leave. The total workforce generally includes:
Under the law, Massachusetts employers are responsible for providing coverage for all W-2 employees. However, 1099-MISC contractors are included in the total number of covered individuals only if they comprise more than 50 percent of the total workforce, which means W2 workers and 1099-MISC contractors combined. It’s also worth remembering that a contractor is considered a 1099-MISC only if they are paid a minimum of $600 in the tax year.
Employers are not required to provide Massachusetts Paid Family and Medical Leave Act coverage to 1099 contractors, even if they make up 50% of the workforce.
Employers who employ 25 employees or more are required to make a contribution of 0.75 percent of eligible payroll to the Department of Family and Medical Leave.
This contribution may be split between the employer contribution and employee payroll deductions. Payments will help the state of Massachusetts to fund both family and medical paid leaves.
Employers with less than 25 employees must make contributions to the Department of Family and Medical leave, but they are not responsible for paying the employer’s share. PFML in Massachusetts is fully funded by employee contributions for businesses with under 25 lives.
Employers should calculate the number of covered individuals you employ and get in touch with their accountant and payroll provider to make sure that they are prepared to start deducting premiums.
Then they should get in touch with a local broker who can help Massachusetts business owners save money by privatizing Massachusetts Paid Family and Medical Leave Act coverage.
As experts in statutory disability and PFL coverage across the Northeast United States, The DBL Center is prepared to help Massachusetts brokers help employers find the best rates for PFML.
The DBL Center and our brokers are ready to deliver superior service as business owners navigate a new world under the Massachusetts Paid Family and Medical Leave Act.
by Dawn Allcot
Earlier this year, Massachusetts introduced the Massachusetts Paid Family and Medical Leave Act (PFML) for W-2 employees as well as some 1099 independent contractors. Benefits won’t go into effect until 2021, but employers can begin paying into the plan now.
July 1, 2020 marks the first deadline for payments.
As a shared benefit, MA Family Medical Leave Act premium costs are split between the employer and employees or contractors. Organizations with fewer than 25 employees can offer the plan to their workers as a voluntary, employee-funded benefit.
The DBL Center can write FMLA policies independent of other lines, so you can privatize policies under the Massachusetts Paid Family and Medical Leave Act affordably and provide your customers high levels of service.
With the first MA PFML payments coming up, your customers may wonder how much they owe for their plan, whether it’s funded by the state of Massachusetts or written privately.
Your premiums are based on the total number of your lives in your company, which includes all W-2 employees:
You do not need to count 1099 contractors, as they are responsible to write their own policies and pay the full 0.75% contribution.
When clients provide you with the active employee count and wages earned, they should report figures for the prior 3-month period. Contributions made by July 1, 2020 should include the total headcount from April, May, and June.
As COVID-19, the novel coronavirus pandemic continues to strike across the U.S., many employers have laid off or furloughed workers. If furloughed employees or workers on unemployment have earned at least $4,700 in the prior 12 months before filing, they may be eligible to file a PFML claim in January if they meet all other requirements.
In most cases, employers would still pay into benefits packages for furloughed employees, so these workers would count toward the organization’s number of active lives. However, unemployed workers would not.
During the pandemic, many organizations laid off employees and then brought them back to meet the June 1 deadline for loan forgiveness on a Small Business Administration (SBA) loan issued as part of the Paycheck Protection Program (PPP). Employees re-hired by June 1 would need to be counted as part of Massachusetts Paid Family and Medical Leave Act premium payments.
With so many changes going on for business owners right now, calculating Massachusetts Paid Family and Medical Leave Act premiums can be complicated. It depends on employers’ total lives for the past three months. These numbers may have varied wildly as employees were furloughed or laid off and then brought back as Massachusetts begins its phased reopening this week.
The DBL Center works with top Massachusetts statutory insurance carriers to provide the best service you’ll find. We’ll help you deliver the best rates and superior service to your customers with privatized Massachusetts PFML insurance policies.
Contact The DBL Center today.
by Michael Cohen