(Last Updated On: October 31, 2023)
Following our recent blog on the MCAD’s updates to the Massachusetts Parental Leave Act (MPLA), we’re back to shed light on several significant changes introduced by the state Department of Family and Medical Leave and the Massachusetts legislature to the Paid Family and Medical Leave Act (PFMLA). These updates are crucial for both employers and employees to understand, as they directly impact the benefits and responsibilities associated with the act.
Supplementing PFMLA Benefits with Accrued Paid Leave
Previously, employees couldn’t use their accrued paid leave, such as PTO, sick time, or vacation, while receiving benefits from the PFMLA program. This often meant that employees on paid leave took home less than their regular weekly pay. However, as of November 1st, employees can now “top off” or supplement their weekly benefits with any available accrued paid leave. This allows employees to bridge the gap between their PFMLA benefits and their usual earnings until their accrued paid leave is exhausted. It’s worth noting that employers cannot mandate employees to use their accrued paid leave either before or during their PFMLA benefits period. We anticipate further guidance from the Department on how to calculate and incorporate these accrued paid leave benefits.
Increase in Maximum Weekly Benefit
Effective January 1, 2024, there will be a slight bump in the maximum weekly benefit an eligible employee can receive under the PFMLA. The new maximum weekly benefit will be $1,144.90, up from $1,129.82 in 2023. This benefit is calculated at 64% of the state average weekly wage. The individual benefits for an employee are determined using a formula based on the individual average weekly wage, the state average weekly wage for Massachusetts workers, the benefit year, and the type of leave the employee is taking.
Changes in Tax Rate
Another significant update effective January 1, 2024, is the increase in the tax rate. For employers with 25 or more covered employees, the combined contribution rate will increase from 0.63% to 0.88% of eligible employee wages. For smaller employers with fewer than 25 employees, the contribution requirement increases from 0.318% to 0.46%. The split between the employer and employee contributions will also be adjusted accordingly.
2 Key Benefits of the Updated PFMLA
The recent changes to the PFMLA are not just procedural updates; they represent a significant step forward in ensuring that Massachusetts employees have the support they need during crucial times in their lives. Here are three benefits of these updates.
1. Enhanced Financial Support
By allowing employees the discretion to supplement their PFMLA benefits with accrued paid leave, the financial strain often associated with taking extended leave is reduced. This means that an employee taking time off to care for a sick parent or an injured spouse won’t have to worry as much about making ends meet. They can focus on the well-being of their loved ones without the added stress of a reduced paycheck.
2. Fair Compensation
The rise in the maximum weekly benefit aligns employee compensation more closely with the state’s average weekly wage. This is especially beneficial for those who might be taking leave for extended periods, such as for the birth or adoption of a child. The financial stability provided by this increase can make a significant difference during such transformative life events.
The recent updates to the PFMLA underscore Massachusetts’ commitment to supporting its workforce during life’s challenging moments. Don’t hesitate to reach out to us if you have questions about PFMLA. Knowledge is power, and understanding your rights and benefits under this act can make all the difference when life throws a curveball.
