On June 28, Massachusetts Governor Charlie Baker signed a comprehensive bill requiring employers in the state to provide workers with paid family and medical leave. The bill, titled “An Act Relative to Minimum Wage, Paid Family Medical Leave and the Sales Tax Holiday,” also sets a schedule to increase the state’s minimum wage to $15 per hour by 2023 and phase out time-and-a-half pay on Sundays and holidays.
The enactment of the bill, which will take effect on July 1, 2019, gives Massachusetts one of the most generous paid family and medical leave programs in the country, rivaling legislation passed in California, Hawaii, New Jersey, New York, Rhode Island, Washington and Washington, D.C. The bill establishes a Department of Family and Medical Leave within Massachusetts’s Executive Office of Labor and Workforce Development, which will be responsible for administering the paid leave program.
The comprehensive leave provisions require all Massachusetts employers, regardless of size, to provide workers in the state with the ability to take up to 12 weeks of paid family leave per year and up to 20 weeks of paid medical leave per year for the employee’s own serious health condition. At a maximum, employees are entitled to use 26 weeks of paid leave per year.
As defined in the bill, an employee may take paid family leave for any of the following reasons:
- To care for a family member with a serious health condition.
- “Family member” includes an employee’s domestic partner, grandchildren, grandparents and siblings, as well as the parents of a spouse or domestic partner
- “Serious health condition” is defined as an illness, injury, impairment, or physical or mental condition that involves (i) inpatient care in a hospital, hospice or residential medical facility, or (ii) continuing treatment by a health care provider
- To bond with the employee’s child during the first 12 months after birth or the first 12 months after the placement of the child for adoption or foster care.
- Because of any qualifying exigency arising out of the fact that a family member is on active duty or has been notified of an impending call or order to active duty in the armed forces.
- In order to care for a family member who is a covered service member with a serious injury or illness incurred or aggravated in the line of duty; an employee taking paid family leave for this reason is entitled to take up to 26 weeks per year.
Employees are required to provide at least 30 days’ advance notice of their intent to utilize personal or medical leave, which must include the anticipated start date, the anticipated length of the leave and the expected date of return. If an employee’s need to use leave is unforeseen or the employee is unable to provide 30 days’ advance notice, the employee must provide notice as soon as practicable if the delay is for reasons beyond the employee’s control.
The bill also establishes the Family and Medical Leave Trust Fund, which will be used to fund the program and compensate workers when they use paid leave. After a seven-day waiting period, employees on paid leave will earn 80 percent of their wages up to 50 percent of the state average weekly wage, and then 50 percent of their wages above that amount, up to maximum of $850 per week. To fund the Family and Medical Leave Trust Fund, Massachusetts will institute a new 0.63 payroll tax, with the cost split 50-50 between employers and employees.
In addition to mandating paid family and medical leave, the bill will also raise Massachusetts’s basic minimum wage from the current $11 per hour to $15 per hour by Jan. 1, 2023. Beginning Jan. 1, 2019, the minimum wage will increase to $12 per hour. The minimum wage will then increase by 75 cents on Jan. 1 of every subsequent year until it reaches $15 per hour on Jan. 1, 2023. Massachusetts now joins California, Washington, D.C., and New York as having passed legislation increasing the minimum wage to $15 per hour. Similarly, tipped workers in Massachusetts will also see an increase in their minimum wage from the current $3.75 per hour to $6.75 per hour by 2023. On Jan. 1, 2019, the tipped minimum wage will increase to $4.35 per hour. Thereafter, the tipped minimum wage will increase by 60 cents on January 1 of every subsequent year until it reaches $6.75 per hour on Jan. 1, 2023.
Simultaneous with these increases, Massachusetts will phase out the requirement that workers receive time-and-a-half pay on Sundays and holidays over the next five years.
The bottom line
Employers should review their existing paid leave policies and prepare to adopt the necessary changes to their handbooks and payroll systems. Although the bill does not go into effect until July 1, 2019, employers should be prepared to understand the various requirements, including when an employee may take paid leave and the notice requirements for doing so. Employers should also become familiar with how paid leave and the impending increases to Massachusetts’s minimum and tipped wages will impact their workforce and overall budget.
Should you have any questions, please contact the BakerHostetler Employment team for more information.