Delay of MA Paid Family & Medical Leave payroll tax deductions 

On June 11, state officials pushed back the deadline to start taking payroll deductions for PFML from July 1 to October 1. 

What happened? 

Last week, the state granted businesses a three-month delay before implementing the new paid family and medical leave program. These new taxes were supposed to kick in on July 1, but now they will begin on October 1, 2019.  Employee notice requirements have been delayed by 3 months as well and are now required by 9/30/19.

The postponement is to ensure that businesses have adequate time to implement the program and to accommodate some minor changes being made to its design.

Businesses taxes will increase to 0.75 percent of wages of each covered individual, from 0.63 percent, because of the delayed start. Those rates aren’t expected to last forever and may change in the fall of 2020.

Full information on the program is available here:  

Are there any issues my business should be aware of? 

Issues arise with the fact that the law leaves considerable room for interpretation. Many companies still have to decide how much of the new taxes they will pay, and how much should come out of their workers’ pay checks. Employers are required to pick up at least 60 percent of the medical leave portion of the tax but are not required to contribute toward the family leave benefit pool. Employers can choose to pay more than what the state requires. 

The law is designed to exempt companies that already offer more generous leave benefits than those required by the new state program (12 weeks of paid parental leave, and 20 weeks of paid medical leave) but eligible claimants will need to file for this exemption through The Department of Family and Medical Leave.  

More information can be found here:

It’s a complex issue, and Insource is here to help your organization through these changes. Want to learn more about how these contributions are calculated or how they may affect your organization or need help understanding the process? Contact us at insource@insourceservices.com or 781-235-1490.