Massachusetts is now operating an innovative paid family and medical leave (PFML) benefits system for employees and eligible self-employed individuals.
What is Massachusetts Paid Family and Medical Leave (PFML)?
The state of Massachusetts passed an Act providing paid family leave and medical leave to covered individuals. MA PFML is providing most benefits to employees and eligible self-employed workers who opt-in.
Massachusetts PFML is funded by a new payroll tax for contributions with employer and employee portions. Payroll tax deductions began in October 2019.
How Do Individuals Apply for Massachusetts Paid Family Leave?
Covered individuals provide notice to their employer before applying to receive PFML benefits.
Eligible self-employed individuals can opt-in to Massachusetts paid family leave if they apply through MassTaxConnect and pay the full contribution of 0.75% for family and medical leave. Self-employed who opt-in must remain enrolled in PFML for at least three years.
What does Massachusetts Paid Family and Medical Leave Cover?
For Massachusetts paid medical leave, the law relates to a covered individual’s serious health condition. Beginning July 1, 2021, PFML will also cover care of “family members” (defined in the Act) with a serious health condition.
MA paid family leave also includes bonding with a baby born into the family or adopting or fostering a child. If doctor-certified medical problems arise during pregnancy or recovery from childbirth, then PFML may be taken by a covered individual.
Massachusetts PFML can apply to preparation for deployment and serious medical conditions of U.S. service members deployed in foreign countries.
How Many Weeks of Massachusetts PFML Can Be Taken?
A covered individual can take up to 20 weeks of medical leave in a benefit year, but the combined amount of paid family leave and medical leave may not exceed 26 weeks. Generally, the family leave limit is 12 weeks, but that family leave limit is 26 weeks to take care of an eligible service member.
How are Benefits for Massachusetts Paid Family Leave Funded?
PFML employee payroll taxes primarily fund the benefits for Massachusetts Paid Family and Medical Leave. In 2021, the payroll tax rate for PFML is up to 0.75% of eligible wages, which includes both Massachusetts paid family leave and medical leave.
Eligible wages for employees are limited by the same income cap ($142,800 in 2021) used for computing U.S. federal Social Security payroll taxes.
Currently, the maximum amount that can be taken as a payroll deduction for PFML is 38 cents per $100 in eligible wages.
Benefits eligibility for self-employed individuals starts after paying contributions for two of the last four calendar quarters. Another self-employed eligibility requirement is income of $5,100 or more, which is at least 30 times more than weekly benefits for paid family and medical leave (see MA PFML calculator).
Contributions for PFML go to the Massachusetts Family and Employment Security Trust Fund to pay PFML benefits to covered individuals and cover department administrative costs related to the program.
How Do Contributions for Massachusetts Paid Family and Medical Leave Work?
Annually on October 1st, the state of Massachusetts issues the next calendar year’s rate to cover PFML benefits. The 2021 eligible wage contribution rate for Massachusetts paid family and medical leave is 0.75%, which can be split between an employee and employer contribution. The employee portion is deducted from payroll as a tax. The employer remits total contributions to the state of Massachusetts.
For employers with 25 or more covered individuals, of the 0.75% of eligible wages total for Massachusetts PFML contributions, 0.62% is for the medical leave contribution, and 0.13% is for the family leave contribution. For medical leave, the minimum employer share is 60%, and the covered individual share is a maximum of 40%. For family leave, the minimum employer share is 0%, and the maximum covered individual share is 100%.
Employers with fewer than 25 covered individuals don’t have to pay the employer share of the medical leave contribution, paying 0.378% of eligible wages instead. They may elect to cover all or part of the covered individuals’ share.
According to the regulations, employers may offer a state-approved private paid family leave or paid medical leave plan (or both) instead of the Massachusetts PFML plan.
