Massachusetts: Department Issues Important PFML Updates

By Amelia J. Holstrom - Skoler, Abbott & Presser, P.C.

October 12, 2022

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 Massachusetts 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 in a benefit year for various reasons, including but not limited to leave for the employee’s own serious health condition or the serious health condition of a family member and leave to bond with a child 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 on 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 and its Fiscal Year 2022 Report.

The Contribution Rate is Decreasing

Beginning on January 1, 2023, the PFML contribution rate for businesses with 25 or more employees is decreasing from 0.68% of wages to 0.63%. Of the 0.63%, 0.11% applies to the family leave portion of the law and may be paid for solely by the employee. The remaining 0.52% is applicable to the medical leave portion of the law, of which 0.208% may be paid for by the employee, with the remaining 0.312% to be paid for by the employer.

Similarly, the PFML contribution rate for businesses with less than 25 employees is decreasing from 0.344% to 0.318%.  Employers under 25 employees may require the employee to pay the full 0.318% 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 2022, that maximum was $147,000.  The maximum has not yet been set for 2023, but employers will need to pay attention to that number.

A New Notice is Now Required

Under the law, employers are required to give employees a written notice, which includes information on the contribution rates, among other things, within 30 days of hire for new employees and 30 days in advance of any contribution rate change for current employees.  As a result, employers must provide notice to current employees by December 2, 2022 of the new contribution rate.  The Department has not yet issued its model notice, but employers can check here for it in the near future.

For employees hired before January 1, 2023, they will have to receive the notice with the 2022 rates and the new 2023 rates either within 30 days of their hire date or by December 2, 2022, whichever is later.

The Maximum Weekly Benefit is Increasing

PFML provides for 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 and in 2022 it was $1,084.31.  In 2023, the maximum weekly benefit will be $1,129.82.

FY 2022 Report Sheds Light of Employee Use

The Department also issued its Fiscal Year 2022 (July 1, 2021-June 30, 2022) PFML Report. It is difficult to compare the FY 2022 report to FY 2021, because FY 2021 only covered a period of six months from January 1, 2021 when the law went into effect to June 30, 2021.  Additionally, between January and June 30, 2021, employees could not yet take leave for a family member’s serious health condition as that piece of the law was not implemented until July 1, 2021. Nonetheless, the FY 2022 report does shed light on employee use of PFML over the last year.

In FY 2022, the Department approved 112,531 applications for PFML.  The majority of those – 59.31% – were for an employee’s own serious health condition.  Family leave to bond with a child following birth, adoption or foster care placement accounted for 30.61% of approved applications and leave for a family member’s serious health condition applied to 10.05% of approved applications.  A small amount of approved applications were for military exigency leave (0.04%) and leave for care for a service member (0.01%).

The report indicates that the Department denied 19.64% 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, 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 below 80,000 – for which demographic data is provided does not equal the total number of approved claims – more than 112,000 – because individuals can file more than one claim in a year. As a result, this data implies that more than 30,000 individuals applied for more than one type of leave in FY 2022.

Finally, the Average Weekly Wage of individuals who applied for PFML in FY 2022 was $1,421.80, which is roughly $73,900 annually.

Next Steps

Employers should continue to check in on the Department’s website for the 2023 Contribution Notice and send that notice as outlined above no later than December 2, 2022.

In the interim, we will continue to monitor any changes or proposed changes to the program and report on them here.

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