Massachusetts: Department of Family and Medical Leave Issues Important PFML Updates
By Amelia J. Holstrom - Skoler Abbott
October 4, 2023
The Massachusetts Department of Family and Medical Leave (Department) has been busy over the last several weeks and has issued some updates that are important for employers to know about. The Department administers the Paid Family and Medical Leave (PFML) law. Under that law, employees are eligible to take up to 26 work weeks of PFML each benefit year for various reasons, including leave for their own serious health conditions or the serious health condition of their family members and leave to bond with children after birth, adoption, or placement. Employees (and employers at companies with more than 24 employees) fund the PFML program through contributions deducted from their wages and employees who take PFML leave are paid a certain percentage of their regular pay up to a maximum based, in part, on the state’s Average Weekly Wage. In recent weeks, the Department issued two important updates regarding these two issues, along with its Fiscal Year 2023 Report.
The Contribution Rate is Increasing
Beginning on January 1, 2024, the PFML contribution rate for businesses with 25 or more employees is increasing from 0.63% of wages to 0.88%. Of the 0.88%, 0.18% applies to the family leave portion of the law and may be paid for solely by the employee. The remaining 0.70% is applicable to the medical leave portion of the law, of which 0.28% may be paid for by the employee, with the remaining 0.42% to be paid for by the employer.
Similarly, the PFML contribution rate for businesses with less than 25 employees is increasing from 0.318% to 0.46%. Employers under 25 employees may require the employee to pay the full 0.46% contribution.
Individual contributions are still capped by the Federal Social Security taxable maximum. In other words, PFML contributions are not paid by the employee or employer on any income over that maximum. For 2023, that maximum was $160,200. The maximum has not yet been set for 2024, but employers will need to pay attention to that number.
A New Notice is Now Required
Under the law, employers are required to give employee’s a written notice, which includes information on the contribution rates, among other things, at the time of hire and 30 days in advance of any contribution rate change. As a result, employers must provide notice of the new contribution rate to current employees by December 2, 2023. The Department has not yet issued its model notice, but employers can check here for it in the near future.
If you hire someone before January 1, 2024, but after you have already distributed the new notice to your current employees, you will need to give them both your current notice (with 2023 rates) and the new notice (with 2024 rates).
The Maximum Weekly Benefit is Increasing
PFML provides partial wage replacement for employees up to a maximum weekly payment based on a calculation involving the employee’s average weekly wage and the state’s Average Weekly Wage, which is calculated and published yearly. Initially, the maximum weekly payment was $850 per week. It has increased significantly since then. In 2023, it was $1,129.82. In 2024, the maximum weekly benefit amount is increasing to $1,144.90.
FY 2023 Report Sheds Light on Employee Use
The Department also issued its Fiscal Year 2023 (July 1, 2022-June 30, 2023) PFML Report. When compared to the FY 2022 Report, the 2023 Report sheds light on some significant differences in FY 2023 and some things that stayed the same. Here are the highlights:
In FY 2023, the Department approved 143,356 applications for PFML. This is a 27.39% increase in approved applications over FY 2022. The majority of those – 49.36% – were for an employee’s own serious health condition. Leave associated with recovery from child birth and/or pregnancy represented 13.19% of approved applications. Notably, 62.88% of individuals who had an approved medical claim related to recovery from child birth also had an approved family leave claim for bonding. Family leave to bond with a child following birth, adoption or foster care placement accounted for 27.37% of approved applications and leave for a family member’s serious health condition represented 10.17% of approved applications. A small amount of approved applications were for military exigency leave and leave for care for a service member.
The report indicates that the Department denied 16.27% of applications for various reasons, including that the individual had not satisfied the financial eligibility test, worked for an employer with a private plan, failed to submit appropriate documentation, did not apply for bonding leave within one year of the birth, and did not notify their employer of their need for leave within the timelines set forth in the statute and regulations.
The report also includes demographics for approved claimants. Notably, just like in FY 2022, the age group with the most approved claims was 31-to-40-year-olds. Additionally, the report notes that the total number of claimants – just over 82,000 – for which demographic data is provided does not equal the total number of approved claims – more than 143,000 – because individuals can file more than one claim in a year.
Finally, the Average Weekly Wage of individuals who applied for PFML in FY 2023 was $1,155.48, which was more than 18% lower than the Average Weekly Wage of individuals who applied in FY 2022.
Employers should continue to check in on the Department’s website for the 2024 Contribution Notice and send that notice as outlined above no later than December 2, 2023.