As we have previously reported, since June 2019, the Massachusetts Department of Family and Medical Leave (the “DFML”) has proposed and adopted several “technical changes” and clarifications to the Massachusetts Paid Family and Medical Leave Law (the “PFML”). Our analysis of these proposals and revisions may be found here, here, and here. As part of the ongoing “technical changes,” the DFML recently published new proposed amendments (“New Proposed Amendments”) to the regulations governing the PFML (the “Regulations”). The New Proposed Amendments incorporate new definitions of key terms and provide, among other things, guidance regarding the requirements for private plan exemptions. Additionally, the New Proposed Amendments present information pertaining to applications for benefits, exclusions, and requirements under the law.
As a reminder, PFML benefits will become available beginning on January 1, 2021, with full benefits available by July 1, 2021. The following summary contains details of significant substantive changes provided in the New Proposed Amendments.
Identifying When a 1099-MISC Contractor is a ‘Covered Individual’
The PFML requires Massachusetts employers to report their total workforce count to the DFML, but only employers with 25 or more “covered individuals” need to withhold and remit contributions to the PFML program. The New Proposed Amendments seek to codify the DFML’s October 2019 guidance regarding whether an independent contractor is a “covered individual” for the purposes of meeting the headcount threshold. Thus, if the New Proposed Amendments are adopted, employers would not count properly classified self-employed individuals or contract workers as part of an employer’s workforce. Accordingly, the definition of a “covered contract worker” would be amended to include individuals (1) for whom the employer is required to report payment for services on IRS Form 1099-MISC; (2) for whom an employer is required to remit contributions to the Family and Employment Security Trust Fund as required by the PFML; (3) who performs services as an individual entity in Massachusetts; (4) who resides in Massachusetts; and (5) who is not classified as an independent contractor pursuant to the Massachusetts unemployment statute.
Applications and Requirements for Private Plan Exemptions
Employers that currently provide paid leave benefits to their workers may apply for an exemption to the contribution requirement to make contributions for medical leave coverage, family leave coverage, or both. The New Proposed Amendments clarify that an employer may not apply for an exemption that only covers a portion of its covered workforce. Thus, in order to qualify for an exemption from the PFML contribution requirements, all covered individuals must be included in an employer’s private plan.
Further, the New Proposed Amendments provide three additional requirements for an employer to qualify for an exemption from the PFML requirement to collect, remit, and pay contributions. The additional exemption requirements include:
- The employer must provide for an appeals process with the private plan administrator before the employee may appeal directly to the DFML. The individual appeals process must afford the individual at least 10 calendar days to submit an appeal, and must extend the appeals filing period if the individual establishes that circumstances outside of their control prevented the filling of an appeal within the required time period. Whether the extenuating circumstances warrant an extension for filing the appeal will be determined at the DFML’s discretion.
- As part of any determination regarding a covered individual’s entitlement to benefits under a private plan, the employer must provide a notice of rights under both the private plan and the PFML.
- Notwithstanding the financial eligibility requirements to receive PFML benefits, the private plan must calculate a covered individual’s weekly benefit amount based on the wages or qualified earnings earned with the employer at the time of an application for benefits.
Applications for Benefits and Approval Process
Under the New Proposed Amendments, a covered individual will be required to give not less than 30 days’ notice of the anticipated start date of their leave to their employer. Proof of the notice to the employer must be provided to the DFML. If a delay occurs as the result of circumstances beyond a covered individual’s control, notice must be given as soon as practicable. The New Proposed Amendments further provide that the DFML will not accept an application for benefits unless notice to the employer has been provided. Unlike previous iterations of the PFML Regulations, the New Proposed Amendments would allow, but not require, employers to apply for benefits on behalf of employees. Employers who choose this option must abide by the requirements and timelines dictated by the PFML.
Additionally, the current PFML Regulations provide that no PFML benefits are payable during an initial seven-day waiting period. The New Proposed Amendments clarify that the seven-day waiting period for family or medical leave benefits starts on the first day of leave taken for an approved application and runs for seven consecutive calendar days. The foregoing consecutive-day waiting period also applies even in cases of applications for intermittent leave. The New Proposed Amendments further provide for an exception to the mandatory seven-day waiting period for medical leave during pregnancy or recovery from a childbirth, if supported by a healthcare provider’s documentation that the medical leave is immediately followed by family leave.
Benefit Reductions and Paid Leave Reimbursements
The New Proposed Amendments expand upon the permissible reductions in weekly benefits amounts and/or leave allotments for covered individuals. As currently written, the PFML Regulations state that a covered individual’s weekly benefit amount will be reduced by the amount of wages that they receive through unemployment insurance, workers’ compensation, or disability benefits programs (such as Social Security benefits). Under the New Proposed Amendments, weekly benefit amount reductions, including leave allotment, will also be made for any benefits that the covered individual receives from their employer through an exempt private plan, or any wages received from another employer or through self-employment.
Furthermore, the New Proposed Amendments provide that an employer may qualify for reimbursement from the DFML for benefits it provides to covered individuals pursuant to the employer’s private paid temporary disability, family, or medical leave policy. Employers will not, however, be eligible for reimbursement for payments made to a covered individual who elects to use other accrued benefits, such as sick leave or vacation time.
Retaliation Presumption Narrowed
As currently drafted, the PFML Regulations state that any negative change to an employee’s status or adverse employment action during or within six months of a leave taken pursuant to the PFML creates a presumption of retaliation. The New Proposed Amendments narrow the presumption, and clarify that subjectively perceived inconveniences that affect de minimis aspects of an employee’s work will not be considered a negative change under the PFML.
Get Involved and Stay Alert
Employers wishing to submit comments on the New Proposed Amendments can do so online. The DFML has also announced that it will hold public hearings on June 11, 2020. The public hearing(s) will either be online or in person, depending on the status of the Massachusetts COVID-19 response and emergency orders. Online registration to attend the public hearings is now open. Massachusetts employers should also continue to monitor the DFML’s website for important updates.