As we begin a new year, Massachusetts employers should start to plan for the new Massachusetts Paid Family Medical Leave law,which will begin to be implemented, in stages, starting in July. This law will cause sweeping changes.
Under the Paid Family Medical Leave law, Massachusetts employees, and in some cases, non-employees and former employees, will be entitled to receive, on an annual basis:
- Medical leave of up to 20 weeks for the covered individual’s own health condition,
- Family leave of generally up to 12 weeks to care for family members, and;
- Combined medical and family leave of up to 26 weeks.
For employers who are subject to the federal Family and Medical Leave Act (“FMLA”), many of the provisions of the new law will sound familiar. As under the FMLA, leave applies to time off for the employee’s own serious health condition and to time off in order to care for a family member with a serious health condition. The term “serious health condition” has the same definition as under the federal FMLA. In addition to covering conditions requiring in-patient stay in a medical facility, it applies to conditions requiring “continuing treatment” by a health care provider. The “continuing treatment” prong is broad and is expected to cover chronic conditions and conditions such as pregnancy, as well as conditions resulting in a short-term period of incapacity when combined with ongoing treatment by a healthcare provider.
In addition, and also consistent with FMLA provisions, family leave may also be used to bond with a child in connection with childbirth, adoption, or foster care placement, as well as for certain leaves associated with a family member’s military service. Under the FMLA, and the new Massachusetts law, leave to care for family members who were injured while performing military service is protected for 26 weeks.
The implementation of the paid leave provisions is delayed until 2021, but employers will be required to start making financial contributions to support the paid leave program starting on July 1, 2019. The law allows employers to deduct part of the required contributions from each employee’s wages. Employers with fewer than 25 employees do not have to pay the employer share of the cost. The initial contributions are set at 0.63 % of each employee’s wages.
The new law is modelled on the federal FMLA — but with some significant differences, including the following:
- Provides for payments: The FMLA mandates time off, but does not require that such time be paid. The Massachusetts law requires payment for the absences, to be administered by the newly formed Department of Family and Medical Leave. Payments will be based on an employee’s average weekly earnings, up to a maximum of $850 per week, with the maximum benefit adjusted periodically. The first seven calendar days of leave are not paid, but employees may elect to use accrued sick or vacation or other PTO for those days.
- Provides greater amount of protected leave: 12 weeks is required under the FMLA for leave for an employee’s own health condition and for most types of family leave. Under the Massachusetts law, 20 weeks is required where the leave is for a covered individual’s own health condition and 26 weeks for combined family and medical leave.
- Provides greater protection against terminations while on leave: Under the FMLA, an employer may refuse to reinstate an employee if the employer has grounds for ending the employment unrelated to the employee taking FMLA leave or if the employee is a“key” employee. In contrast, the Massachusetts law appears to narrow the grounds for denying reinstatement to changes in economic conditions or changes in operating conditions.
- Covers more employers: The FMLA is limited to employers with 50 or more employees within 75 miles of the work site. The Massachusetts law applies to all Massachusetts employers, regardless of size.
- Covers more employees: The FMLA applies only to employees who have worked at least one year and at least 1250 hours over the previous twelve months. The Massachusetts laws applies more expansively to any employee who, while working for Massachusetts employers, has earned enough money over the preceding year to meet the financial test for unemployment benefits.
- Covers some former employees and non-employees: The FMLA applies only to existing employees. The Massachusetts law provides for payments to former employees who meet the financial eligibility test at the time of their separation from employment and whose employment ended within 26 weeks of the start of the leave. The law also applies to independent contractors, when these individuals comprise more than 50% of an employer’s workforce, and to other self-employed individuals who elect coverage. Eligible former employees and self-employed individuals are entitled to the same leave payments as existing employees, but have no right to reinstatement.
- Provides for expanded definition of family member: In determining eligibility for family leave, the FMLA limits a family member to the covered employee’s spouse, child, and parent. The Massachusetts law includes these family members and also allows a covered individual to take family leave for domestic partners, parents of a spouse or domestic partner, grandchildren, grandparents, and siblings.
- Limits how employers track the benefit year: The FMLA allows employers to track absences under several different methods. The Massachusetts law requires employers to measure the benefit year going forward for 52 weeks from the Sunday immediately preceding the date that a covered individual first uses protected leave.
- Restricts employers from requiring employees to use paid time off while on protected leave: Under the FMLA, an employer may require an employee to use any paid sick time or vacation time or PTO while taking FMLA leave. The Massachusetts law prohibits employers from requiring employees to use such time concurrently. This means that the 40 hours of mandated Earned Sick Time under Massachusetts law (and any other sick leave or vacation benefits) are in addition to the leave available under the Massachusetts Paid Family Medical Leave law. Leave under the new law, however, is allowed to run concurrently with leave under the federal FMLA and with the 8 weeks of leave for childbirth or adoption under the Massachusetts Parental Leave law. To run concurrently with the FMLA, the leave must qualify for protection under both laws. As an example, an FMLA-eligible employee who takes 12 weeks’ leave under the Massachusetts law to care for a grandmother with a serious health condition will not have exhausted any FMLA time because grandmothers are not covered family members under the FMLA. As a result, this employee would be entitled to an additional 12 weeks’ leave for FMLA-permissible reasons.
Overall, there are significant differences between the FMLA and the Massachusetts law, which greatly expand entitlement to leave and the amount of available leave. The law will pose significant challenges for employers, particularly where an employee has a chronic health condition requiring a significant amount of time off each year.
What employers should be doing in 2019 to prepare for these changes: While the actual leave provisions do not go into effect until 2021, employers should be taking the following steps in the coming year: Employers should be on the lookout for draft regulations, to be issued by March 31, 2019. Employers who want to comment on the draft regulations will need to comply with the applicable comment period. Employers should pay special attention to the ways that the draft regulations address the use of intermittent leave, the grounds to deny reinstatement, and the establishment and handling of employee fraud. These areas have been problematic for employers trying to comply with the federal FMLA.
Employers will need to obtain notices of rights after they are prepared by the Department of Family and Medical Leave. Employers are required to post these notices and to provide copies of the notices to new employees and, in some cases, to self-employed individuals providing contracted services.
Employers with 25 or more employees will need to start making the required financial contributions as of July 2019.
Employers should review the final regulations, which are expected to be in place by July 1, 2019. Employers should then start to consider changes to their personnel policies and practices to comply with the law and regulations. For ease of administration, employers with FMLA policies should consider revising their FMLA policies to make the policies consistent with the new Massachusetts law. In making changes, employers will need to comply with FMLA requirements, such as providing at least 60 days’ notice of any change to the methodology for determining benefit year.
Overall, the Massachusetts Paid Family Medical Leave law is one of several significant changes affecting Massachusetts employers. Massachusetts employers should review their policies and practices to make sure that they are complying with this new law and also with the other new laws that went into effect over the past year, including those dealing with pregnancy accommodation (effective in April 1, 2018), equal pay rights (effective July 1, 2018), non-compete agreements (effective October 1, 2018), and permissible criminal history questions (effective October 13, 2018).