Massachusetts Gov. Baker signs law affecting Paid Family Leave & Minimum Wage Bills
Massachusetts Governor Baker signed on June 28 an Act relative to minimum wage and paid family medical leave. The bill will increase the minimum wage over the next five years and create a new paid family and medical leave program in Massachusetts.
The law also introduces a new Paid Family and Medical Leave program for Massachusetts employers and employees that will be effective January 1, 2021.
* All Massachusetts employers are covered by the new laws.
* The new program will allow employees who contribute to the program the ability to take paid leave for up to 12 weeks a year to care for a family member or bond with a new child, 20 weeks a year to deal with a personal medical issue, and up to 26 weeks to deal with an emergency related to deployment of a family member for military service.
* Weekly benefit amounts will be calculated as a percentage of the employee’s average weekly wage, with a maximum weekly benefit of $850. Self-employed persons may opt into the program.
* For the law to apply to municipal employees, the city or town involved must vote to accept the program.
* Employers will be required to post notice of the new program and to provide written information about the new program to new hires within 30 days.
* Any employee who meets the financial eligibility requirements for unemployment compensation will qualify for paid family and medical leave benefits. In most cases, leave may be taken intermittently or on a reduced schedule basis.
* Employers must continue employee health insurance benefits and employer premium contributions during any period of family or medical leave.
* Employers must restore employees who return from leave to their previous, or an equivalent, position, with the same status, pay, benefits and seniority, barring intervening layoffs or changed operating conditions.
* Employers may not retaliate or discriminate against employees for exercising their rights under the new law, may not otherwise interfere with their exercise of those rights, and may not retaliate or discriminate against employees for filing a civil complaint to enforce such rights.
* Employees will have three years to sue an employer for a violation of the new law. (Employers found liable may be ordered to reinstate the employee and to pay three times the employee’s lost wages and benefits, plus reasonable attorneys’ fees and costs.)
* The program will be administered by a new state agency, the Department of Family and Medical Leave, and will be paid for by mandatory employer contributions to a state trust fund. Employers may require employees to pay a portion of those contributions, and employers with fewer than 25 employees are exempt from paying the employer share of the contributions.
* Employers will pay the tax at the initial rate of .63%. The treasurer and receiver for the new Family and Employment Security Trust Fund would set employer contribution rates each year.
* Employers could not deduct more than 40% of the contributions from an employee’s wages for medical leave. However, employers could deduct up to 100% of the contributions from an employee’s wages for family leave.
* Employers will have the option of providing equivalent benefits to their employees through an approved private plan or self-insurance.
* The new department must craft proposed regulations by March 31, 2019 and will start collecting the new tax on July 1, 2019.
The minimum wage bill will also gradually raise the Commonwealth’s minimum wage to $15/hour over five years, with an initial increase taking effect in January 2019 with the following increases:
• $12.00 in 2019
• $12.75 in 2020
• $13.50 in 2021
• $14.25 in 2022
• $15.00 in 2023
Included, will be a raise to the minimum base wage rate for tipped workers, up to $6.75, that will also phase in over a 5-year period commencing in January of 2019. Wage policies for Sunday and Holiday pay are also reformed and brought in line with most other states across the country.
As more information becomes available Webber & Grinnell Employee Benefits will keep you apprised.