Breaking News: Three Month Delay for Massachusetts Paid Family and Medical Leave
In a joint statement on Tuesday evening, June 11, 2019, Governor Baker, Senate President Karen Spilka and House Speaker Robert DeLeo announced a three-month delay in the rollout of the new Massachusetts Paid Family and Medical Leave law (MAPFML). Contributions into the state trust are now set to begin on October 1, 2019. On May 20, 2019, a coalition of Massachusetts businesses and labor groups began calling for a delay given many of the outstanding questions that still surround the rollout and regulations of MAPFML.
Though the legislature still needs to vote to adopt the decision to delay, the extra time will enable the Department of Family and Medical Leave (the “Department”) to work out some of the still-looming questions surrounding the law (for example, whether contributions will be made on a post- or pre-tax basis), and give employers and covered business entities the bandwidth to set up the proper payroll contributions and notify their workforces. In recent months, the Department has already pushed back some of the softer deadlines under MAPFML, including permitting employers and covered business entities to apply for private plan exemptions until September 20, 2019.
To account for the three-month delay, lobbyists and business groups anticipate that the legislature will increase the payroll tax from the previous .63% of a covered individual’s earnings to .75% in order to maintain funding for benefits beginning in 2021. These rates are subject to adjustment by the Department on a yearly basis as well.
Employers can breathe easier knowing they have an additional few months to prepare for the MAPFML effective date, or to decide whether or not a private plan exemption is right for their budget and workforce. For more information on MAPFML, please see our previous blog posts here, here and here.