With the start of the new year also came the implementation of the Massachusetts Paid Family and Medical Leave Act.
Since employees are now eligible to take paid leave under the PFML Act, Massachusetts employers should be aware of their obligations under the law, including as spelled out in guidance recently issued by the Massachusetts Department of Family and Medical Leave, the agency responsible for administering the statute and paying benefits to employees taking leave under it.
Summary of PFML Act
As of Jan. 1, 2021, employers across Massachusetts are required to provide up to 26 weeks of paid, job-protected leave annually to their employees (and, in some cases, to independent contractors) for certain family-related or medical reasons:
- Up to 12 weeks of paid family leave may be taken to bond with a newborn child, bond with a child after adoption or foster care placement, or manage family affairs when a family member is on active duty in the armed forces.
- Up to 20 weeks of paid medical leave may be taken to manage an employee’s own serious health condition, including chronic conditions, requiring treatment by a health care provider.
- Up to 26 weeks of paid family leave may be taken to care for a family member who is a covered service member undergoing medical treatment, or otherwise to address consequences of a serious health condition relating to the family member’s military service.
Beginning on July 1, 2021, employees will also be eligible for up to 12 weeks of paid family leave annually to care for a family member with a serious health condition.
The weekly benefit amount for an employee on PFML will be determined through a formula based on both the employee’s average weekly wage and the average weekly wage throughout Massachusetts. The initial maximum weekly benefit amount will be capped at $850, with this number to be adjusted annually.
Benefit payments will be made through a special state trust fund, which will be funded through mandated payroll tax contributions by employers and employees.
Alternatively, an employer may obtain an exemption from participation in the state trust fund by adopting an approved private plan providing equally (or more) favorable PFML benefits to its employees. Many employers have adopted private plans through approved insurance carriers, though employers can also self-insure for this purpose.
Employers are required to provide employees with written notice of their rights and benefits under the PFML Act, as well as display a PFML workplace poster. A newly updated version of the workplace poster, effective Nov. 17, 2020, is available on the Department of Family and Medical Leave’s website.
Recent DFML guidance
The Department of Family and Medical Leave has periodically issued guidance regarding the many facets of the PFML Act. The most recently issued guidance addresses employer accounts on the DFML’s website, intermittent leave and employer reimbursements, and also updates various frequently asked questions.
- Employer accounts
The DFML has released information on how an employer can create an account on the DFML’s website, which will allow the employer to review and manage PFML applications submitted by covered individuals. Each participating employer will also be required to designate and provide to the DFML the contact information for a leave administrator. To create a PFML account, an employer should call the DFML’s contact center at (833) 344-7365.
- Intermittent and reduced-schedule leave
The DFML’s guidance clarifies that for leave taken intermittently or on a reduced-schedule basis (i) because of one’s own serious health condition, (ii) to care for a family member with a serious health condition, (iii) to care for a covered servicemember with a serious injury or illness, or (iv) for a qualifying exigency, the increments used to track leave under an employer’s policy may not exceed one hour. This applies to PFML policies under both the state program and approved private plans.
For claims administered by the DFML under the state program, increments of leave must be measurable in 15-minute multiples. A covered individual must submit a request for intermittent or reduced-schedule leave with the applicable increments established by the employer’s policy; otherwise, the DFML will default to 15-minute increments.
Intermittent leave and leave on a reduced-schedule basis will be paid by the DFML in increments of at least 15 minutes, and only when an employee has accumulated eight hours of leave time or more than 30 calendar days have elapsed since the initial taking of such leave.
- Employer reimbursements
An employer that administers PFML under the state program and also provides employees with paid disability, family or medical leave benefits, equivalent to the benefits available under the PFML, may be eligible for reimbursement from the DFML for those paid benefits. Payments for accrued vacation, sick or personal time, however, will not be eligible for reimbursement. Similarly, employers with approved private PFML plans will not be eligible for reimbursement.
To qualify for reimbursement, the employer’s policy or program must provide for payments to be made to a covered individual in an amount equal to or greater than what the individual would have received from the DFML for a qualifying reason under the PFML. An employer will not be eligible for reimbursement if a covered individual received payments directly from the DFML for the same time period identified in the reimbursement application.
The DFML’s recent guidance details how employers can submit requests for reimbursement under such an arrangement.
The DFML has also updated its FAQs to address retroactive contributions, supplementation of PFML benefits through accrued paid time off, and the interaction between employer-provided benefits and benefits provided under the PFML.
- Retroactive contributions
In regard to retroactive contribution requirements for an employer that has terminated a private plan exemption, the DFML’s FAQs clarify that the employer will be responsible for remitting 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. Therefore, an employer with a private plan that was initially approved prior to Jan. 1, 2021, is required to go through at least one renewal cycle before terminating its private plan, in order to avoid owing retroactive contributions.
If an employer fails to maintain an approved private plan or has its approval withdrawn by the DFML, the DFML may assess a monetary penalty, and the employer may be required to repay the DFML the total amount of benefits paid to covered individuals during the period of time over which the employer failed to maintain its private plan.
- Supplementation of PFML benefits
The FAQs also confirm the DFML’s position that employees who receive PFML benefits through the state program cannot “top off” their benefits by using accrued paid time off from their employer for the same time period during which they are receiving PFML benefits.
However, this restriction does not apply to employers with approved private plans. Under a private plan, an employer may allow employees to supplement their PFML benefit payments with accrued paid time off.
Lastly, employees who purchase private disability policies that are not funded by their employer may collect disability payments under such policies without having their PFML benefits reduced. This applies both to PFML benefits provided through the state program and to benefits paid under a private plan.
An employee has the right to file an appeal with the DFML if the employee is denied PFML benefits under his or her employer’s approved private plan. However, it is still unclear exactly how this appeal process will work.
Even with the DFML’s recent guidance, a number of important issues under the PFML Act remain to be clarified.
For instance, an employee has the right to file an appeal with the DFML if the employee is denied PFML benefits under his or her employer’s approved private plan. However, it is still unclear exactly how this appeal process will work and what steps will be taken by the DFML upon receipt of an appeal.
Additionally, guidance has yet to be provided for employers with approved private plans on how to hold employee contributions prior to payment of benefits.
Finally, the DFML has not yet addressed how PFML leave will be counted for school employees and employees who work on a seasonal basis. Under the federal Family and Medical Leave Act, or FMLA, employees are considered to be on leave only during time periods when they would otherwise be expected to work. (For instance, for school employees, FMLA leave does not include summer breaks.) Since the PFML regulations mirror the FMLA in many respects, the DFML may interpret the PFML in the same way on this issue.
Jacqueline M. Fogg practices at Schwartz Hannum in Andover, Massachusetts, which represents management in labor and employment law matters, and educational institutions in labor, employment and education law matters.