By Mary O’Neal, Esq.
I have been reading about a new law that will raise minimum wages in Massachusetts and require employers to provide paid family and medical leave to employees. Can you explain what is going on? On June 28, 2018, Charlie Baker signed into law An Act Relative to Minimum Wage, Paid Family Medical Leave and the Sales Tax Holiday. Deemed the “Grand Bargain,” the law keeps Massachusetts at the forefront of providing greater employee rights and protections for its residents. The law follows other significant legislative changes regarding employee leave and wages, including the Earned Sick Time law that became effective on July 1, 2015, the Pregnant Workers Fairness Act that became effective on April 1, 2018, and the amendments to the Equal Pay Act that became effective on July 1, 2018. While many of the changes to the minimum wage are gradual and the implementation of paid family and medical leave will not occur immediately, employers should take note of the new law now and start planning how to comply. How the Act specifically interacts with other federal and Massachusetts leave laws, including the federal Family and Medical Leave Act of 1993 and the Massachusetts parental leave law, will be the subject of future Law at Work columns. Paid Family & Medical Leave: What is it and how will it work? Massachusetts is now one of six states, along with Washington D.C., to provide paid family and medical leave to its residents. The law covers nearly all private sector employees, and provides for benefit payments to begin on January 1, 2021. These benefits will be paid from a trust fund the newly created Department of Family & Medical Leave (“Department”) is charged with implementing. The rate of the benefits will be based on a calculation that factors the “state average weekly wage” and the employee’s average weekly wage, with a maximum weekly benefit of $850. Key provisions in the Act are the following. • How much time? Employers must provide up to 12 weeks of job-protected family leave and up to 20 weeks of job-protected medical leave for their own serious health needs (with a combined maximum of 26 weeks in any year). The law also provides for up to 26 weeks of job-protected leave to care for veterans or service members injured or sick as a result of their military service. • How may family leave be used? Family leave may be used to bond with a new child (including a child placed for foster care or adoption), to care for a seriously ill family member, or to address the impact of a family member’s military deployment. Significantly, the definition of family is broadly defined to include not only spouses, children, and parents, but also parents-in-law, domestic partners, grandchildren, grandparents, and siblings. • What conditions qualify for medical leave? Medical leave may be used by anyone with a “serious health condition,” which is defined as “an illness, injury, impairment or physical or mental condition that involves” either inpatient care in a hospital, hospice or residential medical facility or continuing treatment by a healthcare provider. • What about paid sick and vacation time? Employers cannot require employees seeking to take paid family and medical leave to exhaust other forms of paid time off prior to or during the use of the paid family and medical leave. This is similar to the Massachusetts Parental Leave Act, which prohibits employers from requiring employees taking leave to use their accrued paid leave during parental leave. • What must employers tell their employees? The law requires employers to post a notice prepared or approved by the Department that provides notice of the benefits. Employers also must issue to each employee, within 30 days of their start date, written information about the availability of benefits and how to file a claim for benefits. • Where does the money come from? Employers with 25 or more employees are required to contribute 0.63 percent of each employee’s wages starting on July 1, 2019. This 0.63 percent payroll tax may be split between the employer and the employee, depending on the type of leave. An employer may deduct 40 percent from the employee’s wages for medical leave and may deduct 100 percent from the employee’s wages for family leave. How these contributions will be paid will need to be clarified in the regulations the Department will issue. • What happens when the employee returns from leave? The employee must return to the employee’s previous position or an equivalent position, with the same status, pay, employment benefits, length of service credit, and seniority, barring intervening layoffs or changed operating conditions. In other words, leave under the Act is “job protected” leave. Anything else? Employers are required to maintain an employee’s existing health insurance benefits during the employee’s leave, as if they had not taken such leave. Employers may not retaliate against an employee for using paid family or medical leave. Any negative change in status, pay, benefits, seniority, status or other terms or conditions of employment that occurs within six months of an employee’s return is presumed to be retaliatory. An employer may overcome the presumption only if it can demonstrate by clear and convincing evidence that it would have taken the same action even if the employee had not taken leave. The penalties are stiff if an employer is found to have retaliated against an employee who took leave— the employer may be required to pay three times the employee’s lost wages plus attorneys’ fees and costs. Interactions with other laws If paid leave taken under the Act also qualifies as protected leave under the (federal) Family While many of the changes to the minimum wage are gradual and the implementation of paid family and medical leave will not occur immediately, employers should take note of the new law now and start planning how to comply. capeplymouthbusiness.com | August 2018 | Cape & Plymouth Business 43 Business Toolbox and Medical Leave Act or the Massachusetts Parental Leave Act, the paid leave taken under the Act will run concurrently with, and not in addition to, such protected leave. Minimum wage changes: Additions and subtractions The new law raises the minimum wage gradually from $11 to $15 per hour until January 1, 2023, making Massachusetts one of three states, together with Washington D.C., to enact legislation that will provide a $15 per hour minimum wage. While 2023 may seem far off, the first increase to $12 per hour is less than six months away, on January 1, 2019. The minimum wage will increase by an additional 75-cents each year until 2023. Employees paid a tipped wage will also see an increase to the minimum wage from $3.75 to $6.75 per hour, with rates increasing in 60-cent increments. The law also updates the Massachusetts blue laws to eliminate the obligation of retail employers to pay time-and-one-half for hours worked on Sundays and holidays. Beginning in 2019, that premium wage will be reduced by 10 percent each year until it is eliminated in 2023. What should employers do now? There are a number of steps employers can take now to prepare for the phased implementation of the law. First, start to make arrangements to comply with the $12 minimum wage that will become effective on January 1, 2019 and stay aware of the annual changes to the minimum wage increases and the Sunday and holiday reductions for retail employers. Second, review payroll to determine the proper family and medical leave contributions and make arrangements for making the employer’s contribution. Third, start reviewing employee handbooks and policies regarding leave and be prepared to update those policies and prepare the notice to employees about their right to be paid for family and medical leave. Fourth, employers should expect regulatory guidance regarding the paid family and medical provisions of the law by March 31, 2019. Mary O’Neal, Esq., is a partner in the Boston law