The Massachusetts Paid Family and Medical Leave (PFML) program will begin in 2021, when Massachusetts will offer paid family and medical leave benefits to eligible workers. This will be funded by contributions paid by employees and certain employers through payroll deductions, which will begin on July 1, 2019. The makeup of the client’s workforce will determine if they may be responsible for remitting contributions for both their Massachusetts W-2 employees (full-time, part-time, seasonal) and Massachusetts 1099-MISC contractors.
Determining Eligible Employees
If you had 25 or more covered individuals in the prior year, you are subject to the employer portion. You will need to notify ConnectPay by June 15th 2019. We will not calculate the employer portion unless you notify us that you are subject.
ConnectPay will begin withholding the W-2 payroll deductions of the premiums, payments, and reporting of the MA PFML effective July 1, 2019.
It is your responsibility to inform us by June 15th whether your 1099-MISC contractors are counted, triggering the employer’s contribution for W-2 Employees. ConnectPay will not decide this for you. This current year’s withholding will be determined by the employee count from the previous calendar year. The configuration of your workforce (Massachusetts W-2 employees and Massachusetts 1099-MISC contractors) will determine whether 1099-MISC contractors are covered this year. The MA PFML website can offer clarification on how to count employees at DFML -Counting Individuals. If more than 50 percent of your workforce last year was made up of Massachusetts 1099-MISC contractors, those contractors count toward the total number of covered individuals in your workforce. Our Operations Team is also available to make an appointment to discuss this with you.
You are exempt from paying the employer share of the premiums if you have fewer than 25 W-2 employees/1099-MISC contractors. Your employee contributions and information, however, still need to be reported and submitted to the Department of Family and Medical Leave. ConnectPay will handle the W-2 portion of the requirement.
MA PFML Premium Rates
The total premium will be 0.63 percent of gross wages per employee up to the Social Security (OASDI) wage base ($132,900 in 2019) starting in third quarter 2019. Annually, not later than October 1, the agency will set the contribution rate for the upcoming calendar year.
Family Leave and Medical Leave make up two separate parts of this leave. The Family Leave portion is paid 100% by the employee, and is 17.5 percent of the total premium. The Medical Leave is 82.5 percent of the total premium. 40 percent of the Medical portion is paid by employee, 60 percent paid by the employer (if applicable). Employers can elect to cover some, or all, of the employee portion of both premiums.
ConnectPay will be supporting the payment and reporting process due quarterly. This will start with third quarter of 2019, due on October 31.
Client Set Up
ConnectPay is automatically setting you up for MA PFML for your first payroll with a check date of July 1, 2019, or later as follows:
MA PFML breakdown of employee deductions and employer payments for businesses with less than 25 employees:
|
Benefit Type |
Employer |
Employee |
|
Family Leave |
0 |
100% |
|
Medical Leave |
0 |
40% |
We can make changes to these percentages; you may want to make changes if:
- You know you will be required to pay the 60 percent of the Medical Leave premium.
- You know you want to pay a percentage or all of your employees’ Family Leave premium.
- You know you want to pay a percentage or all of your employees’ Medical Leave premium.
Please let your Payroll Specialist know by June 15th if changes are needed to any of the premium percentages before you process your first payroll of third quarter 2019.
If You Already Offer Family and Medical Leave Benefits
You will be able to apply for annual exemptions from making contributions for both medical leave and family leave if you offer a private plan. Your plan must be at least as generous as what is required under the new PFML law. Your employees will not be covered by the state PFML plan if your business receives this exemption.
Beginning on Monday, April 29, 2019, exemption applications are available on MassTaxConnect.
Please let your payroll specialist know if you are exempt from the state MA PFML program as soon as you have confirmation.
Self Employed
As a self-employed individual, you aren’t required to participate in the state’s PFML program. However, you may elect to purchase coverage. If you do so, you will be responsible for paying the full 0.63 percent contribution rate for both family and medical leave.
Self Employed S-Corps who do not wish to contribute should contact their dedicated client service representative prior to June 15th.
Returns and Payments
Taxpay Clients (the vast majority)
ConnectPay will begin collecting MA PFML contributions starting with payrolls processed with a July 1, 2019, check date. We will remit contributions and returns on your behalf by the due date. The payments and returns will be remitted by October 31, 2019 for the third quarter to this new agency at the MA DOR.
For the few Tax Prep Clients – 1099
You will need to remit returns and payments through the MassTaxConnect system by October 31, 2019, for third quarter.
IMPORTANT : Notifying W-2 Employees/1099-MISC Contractors
Massachusetts employers are required to notify their workforce about the state’s PFML program, including its benefits and protections that apply to them. This notification includes:
Step 1: Workplace Compliance Poster
All Massachusetts employers must display the new Paid Family and Medical Leave mandatory workplace poster approved by the Department of Family and Medical Leave (DFML). The poster explains the benefits available under the PFML law. They must post this poster at their workplace in a location where it can be easily read.
The poster must be available in English and each language that is the primary language of five or more individuals in their workforce if such translations are made available from the Department of Family and Medical Leave (DFML).
Step 2: Written Notice Requirements
On or before June 30, 2019, Employers and Covered Business Entities are required to provide written notice to their current workforce of PFML benefits, contribution rates, and other provisions as outlined in M.G.L. c. 175M sec. 4
- Employers may download a template of this notice provided by DFML or create their own with all the required elements. The current notice is provided below:
For more information about the notice, click HERE.
Percentages for businesses with less than 25 employees:
Percentages for businesses with 25 or more employees:
Employee Benefits
Eligible employees may be entitled to receive benefits for qualified leaves starting in 2021 under the Massachusetts PFML program. For more information about employee benefits, click HERE
If you have any questions, or want to change any of the MA PFML percentages, please contact your payroll specialist.
Sincerely,
The ConnectPay Team
