The Massachusetts Department of Family and Medical Leave (the “Department”) recently issued two updates to Massachusetts Paid Family and Medical Leave (“MA PFML”).  The first update, effective November 1, 2023, offers employees the choice to supplement or “top off” their MA PFML benefits with accrued paid leave – an option not previously available under the Commonwealth’s plan (the “Public Plan”).  The second update, effective January 1, 2024, increases the employer contribution rate and weekly benefit amount available to covered employees. It is important that employers navigating MA PFML benefits understand the obligations imposed by these two changes, which are further detailed below. For additional information on MA PFML and employer responsibilities, see our prior posts here, here, here, and here.  

Employers Must Provide the Option to “Top Off” MA PFML Benefits

Starting on November 1, 2023, MA PFML now provides covered employees with the option to elect to supplement or “top off” their MA PFML benefit with accrued paid leave (e.g., vacation, sick time, or other available paid time off) to receive up to 100% of wages during leave. This right applies to employees who receive MA PFML benefits through the Public Plan and those who participate in their employer’s private plan. 

Previously, the option to “top off” was only available to those employees who received MA PFML benefits under their employer’s qualifying private plan and, even then, only if the employer provided the option to “top off.”  Employees subject to the Public Plan could only use accrued paid leave during the seven-day unpaid waiting period before their MA PFML benefits kicked in, otherwise MA PFML wage replacement benefits could not be “topped-off” with other paid leave benefits. Further, the use of any accrued paid leave under the Public Plan was limited to one block of time at the beginning or end of the MA PFML leave period.  This recent update to MA PFML renders these restrictions moot.  

Regardless of the type of plan at issue, MA PFML will now allow employees to choose whether they want to “top off” their MA PFML benefit with accrued leave or reserve their leave for use at another time.  Employers whose private plans do not allow for “topping off” must amend their plans to bring them into compliance with this new rule.  While employers are required to provide the “top off” option to employees, employers have no authority to approve or deny an employee’s decision to top off their MA PFML benefits; such decision is in the employee’s sole discretion.

MA PFML Contribution Rates and Weekly Benefit Amounts Increase in 2024

The Department also announced its annual update to MA PFML contribution rates and weekly benefit amounts, which will become effective January 1, 2024.  For the first time in two years, the employer contribution rate will increase.  For employers with 25 or more employees, the contribution rate will increase from 0.63% to 0.88% of eligible wages and for employers with fewer than 25 employees, the contribution rate will increase from 0.318% to 0.46% of eligible wages.  At the same time, the maximum weekly benefit amount for employees will also increase from $1,129.82 to $1,149.90. 

Impact on Employers

With this updated guidance, employers with MA PFML private plans should review those plans, along with their current practices and procedures for granting MA PFML leave, and ensure that they are in compliance with the law. The newly implemented “top off” requirement is likely to cause some administrative burdens for employers who must now consider a number of issues, such as: what is the smallest vacation, sick time or paid time off increment that the employer allows under its current policies or applicable law? How does the employer calculate vacation, sick time, or paid time off for salaried exempt employees so that they too can “top off” their PFML benefit? What are the required changes to a private plan, and when do those changes need to be implemented if a plan has already been approved? Employers are encouraged to consult with counsel to discuss the Department’s recent updates, and review any required modifications to an existing PFML private plan and/or vacation, sick time or paid time off policy.   In light of the increases to the contribution rate, employers currently participating in the Public Plan may want to explore the option of a private fully insured or self-funded plan.