Last summer, Governor Baker signed “An Act Relative to Minimum Wage, Paid Family Medical Leave, and the Sales Tax Holiday” (H.4640), which in part created a new Paid Family and Medical Leave program in the Commonwealth. We provided further program details here.
The program was slated to be funded by a payroll tax on employers starting July 1, 2019. Under the Act, the Department of Family and Medical Leave would collect a 0.63% payroll tax on employers to fund the estimated $800 million Paid Family and Medical Leave program.
However, on June 11, 2019, the Governor and state legislators announced agreement on a three-month delay in the implementation of the program. The extension would delay employer contributions until October 1, 2019 and gives employers more time to understand the rules and inform its employees.
The legislature must still pass a bill to implement the delay, so employers should still work towards implementing compliance with the Act. Assuming such a bill is implemented, however, employers will obtain some welcome summertime relief to plan and prepare for implementation of the Act.
We will continue to monitor developments concerning the Paid Family and Medical Leave program and will provide further updates as more information becomes available. As always, Murtha lawyers are available to help Massachusetts businesses regarding their obligations under the program and other relevant employment laws.