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Latest Compliance News

Massachusetts Paid Family and Medical Leave reminder

10/03/19

Author: ADP Admin/Wednesday, October 9, 2019/Categories: Compliance Corner

We would like to remind you that effective Oct. 1, 2019, all Massachusetts employers, unless excluded by exception, will be required to participate in the statewide Paid Family Leave Insurance (FLI) and Medical Leave Insurance (MLI) program. Employers will have the responsibility of reporting wages and other information for their workforce each quarter to the Department of Family and Medical Leave. 

ADP® is committed to assisting you as you prepare for this new program. To help you prepare for compliance, we encourage you to review the Massachusetts website. 

Important information and updates 
Massachusetts will be assigning a new identification number (ID), specifically for this program. In October, you will automatically be registered and sent the ID either by e-mail or regular U.S. mail. This ID will not be required for the first reports or deposits that are due by Jan. 31, 2020. No action is required at this time. 

Recently, Massachusetts clarified the rules for counting a 1099-MISC worker as part of your total number of covered individuals for the purposes of contributions and reporting. In addition to the individual worker meeting specific criteria, 1099-MISC workers count only if 1099-MISC workers make up more than 50% of your total Massachusetts workforce (MA W-2 employees and MA 1099-MISC workers combined). Otherwise, an employer is not required to contribute or report on 1099-MISC workers. We recommend that you refer to the Massachusetts website for specific details. 

Action items 
The Paid Family Leave Insurance (FLI) and Medical Leave Insurance (MLI) program is funded through premiums paid by employers and covered individuals. Employers may withhold these premiums from an individual’s paycheck or pay some or all of the premium on their behalf. Employers must remit premiums on a quarterly basis.
  • The initial total premium percentage is 0.75% of gross wages paid up to the Social Security wage limit shared by the employer and covered individual.
  • The initial MLI contribution will be 0.62% of gross wages. Up to 40% of the contribution may be deducted from a covered individual’s wages (0.248%).
  • The initial FLI contribution will be 0.13% of gross wages. Up to 100% of the contribution may be deducted from a covered individual’s wages.
  • Premium withholding is capped at the Social Security wage base of $132,900 in 2019.
  • ADP will begin withholding required premiums for all payroll processed with pay dates on or after Oct. 1, 2019.
  • The premiums for the family leave portion and the medical leave portion will be calculated and withheld separately.
  • For an example of how the withholdings for the premium is calculated, please refer to the Massachusetts Paid Family and Medical Leave website.
  • Ineligible workers will need to be excluded from the calculations.
We expect the Massachusetts Department of Family and Medical Leave to release additional guidance. We strongly recommend that you refer to the Massachusetts website regularly for these details. 

Should you need any assistance as you prepare for this change, please reach out to your dedicated Service Team.