Governor Charlie Baker, House Speaker Robert DeLeo and Senate President Karen Spilka have agreed in principal to temporarily delay the Paid Family Leave (PFL) tax collection, which is currently scheduled to commence July 1. According to their joint statement, the required collection will commence October 1. It is necessary that this be documented in legislation. Additional information will be provided, if and when this happens.
Whether legislation will change other aspects of the Paid Family Leave law remains to be seen. Every indication is that it will continue to become available January 1, 2021 for baby bonding, military exigency and the individual’s own serious health condition and July 1, 2021 to care for a family member with a serious health condition.
Employers should continue their efforts to ensure compliance with the law. To that end, the Department of Family and Medical Leave has provided a guide entitled Prepare for Paid Family and Medical Leave. While this guidance does not break new ground, it does clarify a few points as follows:
- At this point and unless delayed by legislation, the employer is to post a notice by June 30 as well as provide individual notice and consent, which allows the employee to acknowledge or decline receipt of the information, also by June 30. This guide clarifies that the individual notice can be provided electronically and that if an individual fails to consent, the employer will be deemed to have satisfied its obligation as long as it can show that it provided the notice to all affected individuals.
- The workplace poster can be found here. Additional information about the individual notice as well as the individual notice can be found here.
- This guidance affirms that the employer’s obligation to provide the notice to independent contractors only arises if over 50% of the employer’s population is made up of independent contractors.
- Lastly, the guide clarifies that employer size is determined as of the prior calendar year. Therefore for 2019, employer size is determined based on its population in the 2018 calendar year. Employer size is important for a number of reasons such as whether the employer has any obligation to contribute toward the PFL tax.
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Karen R. McLeese is Vice President of Employee Benefit Regulatory Affairs for CBIZ Benefits & Insurance Servhereices, Inc., a division of CBIZ, Inc. She serves as in-house counsel, with particular emphasis on monitoring and interpreting state and federal employee benefits law. Ms. McLeese is based in the Kansas City office.
The information contained herein is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations. The information contained herein is provided as general guidance and may be affected by changes in law or regulation. The information contained herein is not intended to replace or substitute for accounting or other professional advice. Attorneys or tax advisors must be consulted for assistance in specific situations.
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