As we approach the new year, the Massachusetts Department of Family and Medical Leave (DFML) is gearing up to begin administering leave requests for time off starting January 1, 2021 by preparing its online benefits application system (which may be piloted in December), updating employers on its responses to frequently asked questions, and issuing an updated workplace poster. Accordingly, now is a good time for employers to review their PFML compliance.
Employers that obtained a private plan exemption for 2020 should be looking out for information on renewal for 2021, and should note the FAQ below regarding retroactive payments that would become due if they choose not to renew.
Employers that paid into the public system for 2020 should consider whether obtaining a private plan exemption may be a better option for next year. Many more products have recently become available, some of which may make financial and operational sense for businesses with Massachusetts employees. Employers planning to implement a private plan for the first time should be aware that they must obtain an exemption from the state, which must be approved before the start of a quarter to be effective for that quarter. Information on applying for an exemption is available here.
Employers subject to both the PFML and the federal Family and Medical Leave Act (FMLA) should also review how they calculate the 12 month benefit eligibility period under the FMLA. While the FMLA allows employers to choose among four different methods for the calculation, the PFML requires employers to measure the leave entitlement period over 52 weeks starting from the Sunday immediately preceding the first day that job-protected leave commences. Employers that use a different method allowed by the FMLA—such as the 12-month rolling period measured backwards from the start of leave, which is the only one that avoids the potential for leave stacking—should consider changing it to maximize the amount of FMLA leave that can run concurrently with PFML time off. This can be done with 60 days’ advance notice to employees, so long as employees receive the benefit of the most generous calculation during the notice period. This is also a good time to review other related policies, such as absence notification and attendance requirements.
All employers are advised to post the updated workplace poster (translated versions available here) wherever other workplace postings are displayed. Employers without a physical space for such posters should distribute them electronically or on the appropriate portion of the company’s intranet, and even employers with a physical poster area should consider electronic distribution or posting while so many employees remain away from their usual work spaces due to ongoing pandemic mitigation efforts.
Finally, while the DFML does not currently have a page dedicated to FAQ’s, its recent newsletter identified a number of questions and answers that may be of particular interest to employers:
- What are the retroactive contribution requirements for an employer that has terminated a private plan exemption? An employer that terminates a private plan will be responsible to remit retroactive contributions back to the effective date of the initial exemption approval if it fails to renew its plan for a second term. After the filing and approval of the renewal, an employer may terminate its private plan at the end of the second term without owing retroactive contributions. Employers with an exemption which was initially approved prior to January 1, 2021, will need to go through one (1) renewal cycle to not owe retroactive contributions.
- What are the retroactive contribution requirements for an employer that failed to maintain a private plan or had its approval withdrawn by the Department? The Department may assess a penalty of up to an amount equal to the employer’s total annual payroll for employees and covered contract workers each year or fraction thereof that it failed to maintain said plan, multiplied by the then-current annual contribution rate required under M.G.L. c. 175M, § 6(a). This amount may be subject to penalties under M.G.L. c. 62C and interest from the due date of the PFML return to the date the PFML contributions are paid at a rate prescribed by M.G.L. c. 62C, § 32. The employer or covered business entity may also be required to repay to the Trust Fund the total amount of benefits paid to covered individuals who received benefits from the Trust Fund during the period of time that the employer failed to maintain its plan.
- Employer Provided Benefits and PFML:
- Do private disability policies that are purchased separately by the employee, including through voluntary worksite benefits, cause the employee to have a reduction in DFML benefits?
- Can an employee “top-off” PFML benefits by using accrued paid time off from their employer?
- Can an employer with a private plan exemption allow their employees to supplement their private plan exemption benefit amount with accrued paid leave?
Employers can stay up to date with the DFML by signing up for the Department’s newsletter email list here. Of course, we remain available to advise on any questions that may arise about the PFML, FMLA and other leave issues.