September 4, 2019
Paid Family and Medical Leave (PFML) has gone through the wringer in preparation for its implementation. BizChecks has stayed on top of all the changes, and we are happy to provide you with a final update.
The Department of Family and Medical Leave (DFML) has clarified and emphasized that contributions apply to all checks issu
ed beginning October 1, 2019. The pay period is no longer a consideration. Employers who average less than 25 employees must deduct and remit the contribution from their employees. The rate for an employees contribution is .378% of the first $132,900 in wages. Employers who average 25 or more employees must deduct and remit on behalf of their employees and also make an employer contribution of .372% on the first $132,900 in wages. BizChecks Payroll will automatically begin the employer and employee deductions beginning 10/1/19.
The definition of subject wages has been changed to align with the Mass Unemployment statute (M.G.L. 151A Section 6). Any employment excluded under unemployment law will be exempt from the PMFL contribution. Exempt employers have the option to opt in and must contact the state to do so. Below is a partial list of excluded employment:
Companies employing H2-A visa holders are exempt from remitting contributions for these visa holders to the DMFL. All other temporary worker visa programs are subject to the contribution requirements and those workers will be considered covered individuals.
The department has refined the definition of a Massachusetts 1099 contractor to “Generally, a Mass 1099 miscellaneous contractor is an individual or sole proprietor who resides and performs services in Massachusetts for whom employers are required to report payment for services on IRS form 1099-MISC. These individuals must be performing services in your trade or be regularly engaged to perform services for you”. The State has clarified that an LLC paid on a 1099 MISC. by FEIN cannot be considered a covered individual. Please be aware that if sole props. or individual contractors make up more than 50% of your workforce you are still required to deduct and remit the contribution from the 1099 contractor. BizChecks will be collecting this information from you at the end of each quarter in order to accurately prepare the new quarterly return for the DOR.
The Department of PFML has recently approved a private PFML Policy with a fully insured carrier. Companies interested in pursuing a private alternative to the state plan should reach out to their benefit broker for details. If you would like a referral to a benefit broker, please contact Larry Drago at email@example.com.
Written notices to employees/subject contractors are due back by September 30th. Employers are not required to submit these notices with the state but must keep them on file. Click here for all translated versions of written notices and the poster.
For additional information about the PFML law, click here to be directed to the Department of Paid Family and Medical Leave site. Also, don’t forget about our Compliance Corner videos. They are the perfect tool to help you stay up to date on the everchanging regulations.