In November 2023, the Massachusetts Department of Family and Medical Leave (DFML) announced changes to its Paid Family and Medical Leave (PFML) program. With these changes, Massachusetts employers may need to revise their policies and practices regarding supplementing or “topping off” PFML benefits with employer-provided, accrued paid leave. Additionally, employers should expect their PFML contribution rates to increase in 2024.

PFML Overview

The Massachusetts PFML law provides covered individuals with paid family and medical leave as follows:

• Up to 20 weeks of paid medical leave in a benefit year if they have a serious health condition that incapacitates them from work.
• Up to 12 weeks of paid family leave in a benefit year related to the birth, adoption, or foster care placement of a child, to care for a family member with a serious health condition, or because of a qualifying exigency arising out of the fact that a family member is on active duty or has been notified of an impending call to active duty in the Armed Forces.
• Up to 26 weeks of paid family leave in a benefit year to care for a family member who is a covered service member with a serious health condition.

Employees can take up to 26 total weeks of paid family and medical leave in a single benefit year. A covered individual’s average weekly earnings will determine their benefit amount, and weekly benefits are capped by the DFML. In 2024, the maximum weekly benefit is $1,149.90.

Previous Rule on “Topping Off” PFML Benefits

Before the November 2023 change, employees generally could not supplement or “top off” their PFML benefits with employer-provided, accrued benefits, like paid time off (PTO). This rule was met with confusion and frustration among employers and employees as it meant that an employee could not use PTO (such as vacation or sick time) to make up the difference between their regular pay and the weekly PFML cap. There were some exceptions for employer-provided benefits through exempt private plans.

New Rule on “Topping Off” PFML Benefits

Now, employees can supplement or “top off” their PFML benefits with any employer-provided, accrued PTO. Specifically, an employee can supplement the weekly capped PFML benefits with their PTO, up to a total amount equal to the employee’s individual average weekly wage. Calculated by the DFML, the average weekly wage is the average amount the employee earned per week in the two quarters in which the employee earned the most (or the one quarter, if the employee only worked in two or fewer quarters).

Employers should not report any topping-off of benefits to the DFML. However, employers must tell employees that they have the option to use their accrued PTO to supplement their PFML benefits in accordance with the above-described procedure. Ultimately, employers cannot approve or deny an employee’s decision to top off PFML benefits. The decision whether to engage in “topping off” is solely in the employee’s discretion, according to the DFML.

PFML Benefit and Contribution Rates Increasing in 2024

Effective January 1, 2024, Massachusetts PFML benefit and contribution rates increased. First, the maximum weekly employee benefit amount is increasing from $1,129.82 to $1,149.90. Next, for employers with more than 24 employees, the contribution rate will increase from 0.63% to 0.88% of eligible wages. For employers with 24 or fewer employees, the contribution rate will increase from 0.318% to 0.46% of eligible wages. 

Employer Takeaways

Given this PTO “topping off” change, employers should revisit their written PFML and PTO policies to ensure clarity regarding supplementing PFML benefits with PTO or other employer-provided benefits (such as short term disability benefits). Employers should also be sure that human resources employees are informed of this update. Employers that use third parties to administer their PFML policies should consult with these service providers to account for this update.

The DFML FAQ for topping off issues can be found here.