The Massachusetts Paid Family and Medical Leave law (effective in 2021) requires employers to start making financial contributions to support the paid leave program starting on July 1, 2019. The law allows employers to deduct a part of the required contribution from each employee’s wages (along with an employer contribution*) to fund the program. The initial contributions are set at 0.63% of each employee’s wages.
On June 12th, the Governor, Charlie Baker, announced a three-month delay to the start of the payroll tax which would have begun July 1st. The delay is to help clarify the provisions of the program and to give employers adequate time to adjust and implement the program. The goal is to have the new tax in place by the fall. This delay comes in part due to the May 20th request from Associated Industries of Massachusetts (AIM) and various labor groups requesting the delay, as well as fixes to the policy that better align the law with the federal Family and Medical Leave Act.
*Employers with fewer than 25 employees do not have to pay the employer share of the cost.
Diversified Group will stay up-to-date on this issue and pass along any further developments.
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