In our earlier blog, we gave an overview of the new Massachusetts Paid Family and Medical Leave Law (“PFML”). Payments issued under the Act will be made by a new state agency: the “Family and Employment Security Trust Fund”. The agency will be funded by a payroll tax of 0.63% on the first $132,900 (to be adjusted annually) of an individual’s annual earnings. Although the Act’s leave provisions do not begin until 2021, the payroll tax goes into effect on July 1, 2019.
Our prior blog on this subject indicated that employers who offer benefits that are greater than or equal to the paid leave benefits under the Act can seek permission to opt-out of paying the increased payroll tax.
If you are thinking about opting out, think again. It appears that opting out will be expensive. Not only will an employer need its own paid leave plan but the employer who opts out will also be required to post a bond. For every 25 employees covered by a business’s separate plan, the Department of Family and Medical Leave (“DFML”) requires a bond value of:
- $19,000 for qualifying family leave plans
- $51,000 for qualifying medical leave plans
- $70,000 for qualifying plans for both family and medical
Below are links to the DFML webpages regarding the exemption process:
This blog is for informational purposes only. It should not be considered legal advice. All those who read this blog should seek the advice of a professional before taking action based upon any information provided herein.
© 2019 Doherty, Dugan, Cannon, Raymond & Weil, P.C.