David Demos
Why it matters:
Massachusetts is updating its Paid Family and Medical Leave Act (PFMLA). This overhaul brings significant changes. These will affect both employers and employees. The modifications range from the expansion of benefits to adjustments in contribution rates.
What’s new:
Massachusetts has made recent announcements regarding the PFMLA. These updates focus on permitting employees to add their accrued PTO to their PFML benefits. Additionally, there’s an increase in contribution rates. Both employers and employees need a clear grasp of these changes.
Massachusetts Paid Family and Medical Leave Act (PFML) Explained:
PFML vs. FMLA:
The PFMLA is similar to the federal Family and Medical Leave Act (FMLA). However, there are key differences. PFMLA allows up to 26 weeks of job-protected, paid leave yearly. All Massachusetts businesses, regardless of their size, might fall under PFMLA. This holds even if they aren’t covered by the FMLA.
Broader Definition:
The PFMLA has an expansive definition of “family”. It includes parents-in-law, domestic partners, grandchildren, grandparents, and siblings. Another thing to note is that there’s no service duration needed for employees to be eligible for PFML benefits.
Option for Private Plans:
From 2021 onward, many employers have considered private leave plans over the state’s PFMLA. However, such private initiatives must align with the Department of Family and Medical Leave’s standards. Specifically, these private plans should be as beneficial, if not more, as the state’s program.
Topping Off Policy Adjustments:
Effective November 1:
Employees have a new option at their disposal. They can enhance their benefits with any saved paid leave. This applies to those on both state and private PFML schemes. While this enhancement is available, the final choice rests with the employee. Employers, on the other hand, are obligated to present this option.
Contribution Rate Spike:
Before 2024:
In 2023, for businesses housing more than 25 employees, the rate was set at 0.63% of an employee’s earnings. For companies with 24 or fewer staff, this rate was 0.318%.
From January 1, 2024:
The rates are set to rise. Larger enterprises will see a rate of 0.88%. Smaller entities will have a rate of 0.46%.
Breakdown for Large Employers (25+ employees):
- Medical leave: 0.70% split between Employer (0.42%) and employee (0.28%).
- Family leave: 0.18% solely taken from the employee.
Breakdown for Smaller Employers (≤ 24 employees):
- Medical leave: 0.28% entirely from the employee.
- Family leave: 0.18% again, only from the employee.
Benefit Boost:
By 2024, employees can expect an increase in the maximum weekly benefit. The rise will be from $1,129.82 to $1,149.90.
On the horizon:
This is part of a greater trend in which states are starting their own paid leave programs or boosting existing ones.
