The Massachusetts Department of Family and Medical Leave (DFML) has announced that effective January 1, 2022, the contribution rate for Paid Family and Medical Leave (PFML) will decrease to a rate of 0.68% of eligible wages. This rate is a decline from the program’s initial year of implementation that maintained an original contribution rate of 0.75% of eligible wages.
The total contribution percentage for PFML is broken down so that a set percentage is attributed to medical care and a set percentage is attributed to family care.
Employers with 25+ employees will be required to submit the full contribution to the DFML of 0.68% of eligible wages. However, employers can deduct a portion from the employee’s wages. For the family leave contribution, employers may withhold up to 100% of the family leave contribution which equates to 0.12% of eligible wages. For the medical leave contribution, employers may withhold up to 40% of the medical leave contribution which equates to 0.224% of eligible wages. In addition, employers are responsible for paying 0.336% of eligible wages directly. This is referred to as the “employer share.”
Employers with less than 25 employees, must collect and submit an effective contribution rate of 0.244% of eligible wages. According to the DFML, employers may withhold 0.12% of eligible wages relating to the family medical leave contribution and 0.224% of eligible wages for the medical leave contribution. However, employers of under the 25-employee count threshold are not required to pay the “employer share” for the medical leave contribution. Instead, said employers are given the opportunity to elect to cover either some or all the covered individual’s share.
To assist employers with determining their Paid Family Medical Leave contributions, the state has released a resource that will aid in answering two questions that are pertinent to determining responsibility:
- Whether or not the company’s 1099-MISC contractors are considered covered individuals.
- Whether or not the company is responsible for paying a share of the contributions.
Next Steps for Employers
In order to prepare for the January 1, 2022, effective date, employers should ensure their Paid Family and Medical Leave notices, policies, and payroll has been updated to reflect the withholdings, contribution rate, and benefit amounts.
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