Massachusetts Paid Family Leave Program: Deadline Approaching to Opt Out

Massachusetts employers have until Dec. 20 to opt out of the state's paid family leave program and elect private coverage that meets certain criteria.

Employers may opt for such plans to be self-funded or fully insured. "Employers who wish to apply for a self-funded private plan exemption for the quarter beginning Oct. 1, 2019 should immediately begin the process of obtaining a plan document and bond so that the application may be prepared and submitted by Dec. 20, 2019," said Patricia Moran and Natalie Young, attorneys with Mintz in Boston.

We've rounded up articles and resources from SHRM Online and other trusted media outlets on paid family and medical leave.

First Filing Date

Under the Massachusetts Paid Family and Medical Leave Law, many employees and some independent contractors in the state will be entitled to take paid time off for qualifying events beginning Jan. 1, 2021. In order to fund the program, payroll deductions and employer contributions began on Oct. 31 and must be submitted to the state for the first quarter by Jan. 31, 2020. All businesses with covered workers need to submit employee payroll contributions to the state and businesses with at least 25 covered workers must make additional contributions.

(Massachusetts Department of Family and Medical Leave)

Establishing a Private Plan

Employers can opt out of collecting and remitting contributions to the state if they establish a private plan—but the private plan must provide employee benefits and rights that are at least as generous as those available under the state program. Establishing a private plan could result in cost savings for employers and help them to maintain some control over leaves of absence and preserve existing practices and policies. Employers will need to apply annually to the Massachusetts Department of Paid Family and Medical Leave for an exemption.

(The National Law Review)

Who Is Covered?

The new law's final regulations adopted the definition of "employment" that is used under Massachusetts unemployment laws. As a result, 24 categories of employees are now exempt from the paid family leave program. Of those 24 categories, among the most notable are:

• Fully commission-based real estate brokers and salespeople and insurance agents and solicitors classified as W-2 employees.
• Students who perform work for a school, college or university.
• Employees of churches or organizations operated primarily for religious purposes.
• Student nurses working for a hospital or a nurses' training school or interns working in a hospital following a four-year course in a medical school.

Employees working in the U.S. under foreign work visas (such as H1-B, H2-B, O-1 and O-2 visas) are covered by the law and are subject to employee contributions if they otherwise qualify as a covered individual.

(SHRM Online)

[SHRM members-only resources on Massachusetts Paid Family and Medical Leave]

Multistate Employers Face Challenges

As new paid leave laws pop up in more states, multistate employers will have to develop a compliance strategy. Employers can choose to follow the most generous paid-leave policy nationwide or have different paid-leave benefits based on location. If they choose the latter option, "it's often bad for employee relations" when employees learn that their access to paid leave is less than co-workers' in other states, noted Jonathan A. Segal, an attorney with Duane Morris in Philadelphia. While there are also administrative and legal issues in overseeing different policies in different states, "your employee relations issues may be bigger than your legal issues," he noted. A uniform national policy on paid family leave could resolve many of the challenges now faced by multijurisdictional employers.

(SHRM Online)

More Businesses Offer Paid Leave

Many employers are enhancing their benefits so they can recruit and retain top talent in a tight labor market. The number of employers offering family leave above the time required by the federal Family and Medical Leave Act increased by 6 percentage points, according to the Society for Human Resource Management's (SHRM's) 2019 Employee Benefits survey. Additionally, while paid leave for new fathers has gone up only slightly since 2018, it has seen a steady rise over the past five years (up 14 percentage points) and is now within 4 percentage points of paid leave for new mothers, the most common type of paid leave for new parents.

(SHRM Online)