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October 2022: Massachusetts Announces New Contribution Rates and Benefit Amounts for 2023

19 Oct

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Update Applicable to:
All businesses with 25 or more employees in the state of Massachusetts.

What happened?
The Massachusetts Department of Family and Medical Leave (DFML) has announced its annual updates to contribution rates and maximum weekly benefit amounts under the Massachusetts Paid Family and Medical Leave (PFML) Law for 2023.

What are the details?
The Massachusetts Department of Family and Medical Leave administers the Paid Family and Medical Leave (PFML) law. Under the law, employees are eligible to take up to 26 work weeks of PFML in a benefit year for various reasons, including but not limited to leave for the employee’s serious health condition or the serious health condition of a family member and leave to bond with a child after birth, adoption, or placement.

Beginning on January 1, 2023, the PFML contribution rate for businesses with 25 or more employees decreases from 0.68% of wages to 0.63%. Of the 0.63%, 0.11% applies to the family leave portion of the law and may be paid for solely by the employee. The remaining 0.52% applies to the medical leave portion of the law, of which 0.208% may be paid for by the employee, with the remaining 0.312% to be paid for by the employer.

Similarly, the PFML contribution rate for businesses with less than 25 employees decreases from 0.344% to 0.318%. Employers under 25 employees may require the employee to pay the full 0.318% contribution.

The Federal Social Security taxable maximum still caps individual contributions. In other words, PFML contributions are not paid by the employee or employer on any income over that maximum. For 2022, that maximum was $147,000. The maximum has not yet been set for 2023, but employers must pay attention to that number.

A New Notice is Now Required
Under the law, employers are required to give employees a written notice, which includes information on the contribution rates, among other things, within 30 days of hire for new employees and 30 days before any contribution rate change for current employees. As a result, employers must notify current employees of the new contribution rate by December 2, 2022. The Department has not yet issued its model notice, but employers can check here for it soon.

Employees hired before January 1, 2023, will have to receive the notice with the 2022 and the new 2023 rates either within 30 days of their hire date or by December 2, 2022, whichever is later.

The Maximum Weekly Benefit is Increasing
PFML provides for partial wage replacement for employees up to a maximum weekly payment based on a calculation involving the employee’s average weekly wage and the state’s Average Weekly Wage, which is calculated and published yearly. Initially, the maximum weekly payment was $850 per week. It has increased significantly since, and in 2022 it was $1,084.31. In 2023, the maximum weekly benefit will be $1,129.82

For more information, please see the links below:

Massachusetts Model Notice Resource Website

Article 1 – Article 2

What do employers need to do?
Employers with 25 or more employees should review the links above and ensure they follow new notice requirements by December 2, 2022.

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This communication is intended solely for the purpose of conveying information. The present post might incorporate hyperlinks directing readers to websites managed by third-party entities. The inclusion of any links within this communication is meant to serve as points of reference and could encompass opinion articles from various law firms, articles from HR associations, official websites, news releases, and documents of government agencies, and other relevant third-party sources. Vensure has no authority over these external websites and bears no responsibility for their content. Furthermore, Vensure does not endorse the materials present on these websites. The contents of this communication should not be interpreted as legal advice or as a legal standpoint concerning specific facts or scenarios. Nor should it be deemed an exhaustive compilation of facts potentially pertinent to federal, state, or local laws. It is strongly advised that employers solicit legal guidance from an employment attorney when undertaking actions in response to any legal updates provided. This is due to the possibility of future alterations occurring in federal, state, and local laws, regulations, as well as the directives and guidelines issued by governing agencies. These changes may transpire at any given time, potentially rendering certain portions of the content within this update void or inaccurate.

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