June 14, 2019
Massachusetts Governor Charlie Baker (R) and legislators announced that they will delay implementation of the payroll tax for their new paid family and medical leave program until October 1, 2019.
The state’s paid family and medical leave program will require employers to provide workers with 12 weeks of paid family leave and 20 weeks of paid medical leave, with a maximum amount of paid leave employers would have to provide capped at 26 weeks per year.
It appears the deadline for employers to inform workers about opt-out plans remains June 30, 2019, barring another announcement is made before then.
Employer and employee payroll taxes will likely increase. Because the delay will not reduce total contributions paid to the state’s new leave trust fund, the state will increase the contribution rate from 0.63% to 0.75% of wages.
Program benefits are still set to begin January 1, 2021.
Takeaway: Although the state will have three more months to finalize the pending draft regulations and for insurers to create private insurance plans for the "private exemption" provided by the law, it is not clear if that is enough time for policymakers to eliminate all the confusion surrounding the paid leave program.