Associated Industries of Massachusetts (AIM) today submitted to state regulators recommendations intended to clarify the impending rules for paid family and medical leave.
The recommendations range from aligning the definitions of paid leave with those of the federal Family and Medical Leave Act (FMLA) to defining the conditions under which employers may opt out of the state program and use a private insurance plan. More than 500 AIM member employers submitted comments to the association while the state Executive Office of Labor and Work Force Development conducted listening sessions on the issue.
AIM also suggested for the first time the possibility of postponing the July 1 implementation of contributions to paid family and medical leave if the system is not ready.
“Our overriding objective throughout this process is to ensure that the new program is launched efficiently, with minimal confusion or disruption for employers or their employees. We are particularly concerned for our smaller employers for whom any new state mandate is challenging given their staffing levels,” AIM Executive Vice President John Regan noted in his comments to the new Department of Family and Medical Leave.
“Keeping this in mind, we are committed to staying in close communication with you, the Legislature, and the advocates with whom we have worked previously regarding the need for some delay which would ensure a first-class launch of this important program.”
Regan commended state officials for listening to the suggestions of employers and others before developing draft regulations for the leave law passed by the Legislature and signed by Governor Baker last year. The administration has conducted listening sessions in Boston, Springfield, Lawrence, Worcester, Greenfield, Hyannis, Fall River and Pittsfield, with more sessions scheduled this week in Northbridge and Fitchburg.
The sweeping paid leave law provides workers with 12 weeks of family leave and 20 weeks of personal medical leave. Workers on paid leave will earn 80 percent of their wages up to 50 percent of the state average weekly wage, then 50 percent of wages above that amount, up to an $850 cap.
“Ensuring that these regulations provide clarity for employers and employees about how this new law will be implemented by the agency and operationalized by employers is a monumental task both for state government and the private sector. We must continue to work collaboratively to get this right, because the risk of getting it wrong is intolerable,” Regan wrote.
AIM’s comments offer 12 specific suggestions:
- Alignment with FMLA: Definitions wherever possible should be aligned with those of the FMLA to lessen compliance burdens. Using FMLA definitions makes it easier for employers and employees to avoid confusion. It was agreed during legislative negotiations last year that definitions should be aligned with FMLA, especially because significant case law and clarity around law is already available.
- Private-plan option: More clarity should be given to how this provision would work, including when aplan would need to be approved and what employers are to do if private plans are not available by July 1.
- Abuse: As proposed, the definitions, and other aspects of the proposed regulations, must set clear expectations for both the employer and employee and must provide clarity regarding employers' ability to address abuse.
- Former employee coverage: The bill states that former employees have the right to job-protected leave and that they can take that leave on an intermittent or reduced schedule. How does that work when they are no longer employed? Accruals: As proposed, the regulations would allow an individual to accrue benefits while on leave, which is different than the earned sick time regulations and different from standard practices.
- Covered Individual: As proposed, many temporary workers, vendors and subcontractors with their own companies being issued a 1099 will be captured by this and possibly required to make double payments.
- Benefit tracking and stacking: Regulations must provide clarity regarding how an employer can track the leave and make clear that benefit stacking with unemployment, workers compensation insurance and other benefits is not permitted.
- Job protection: The law provides for job protection, which was enabled by the statute. However, there are several instances, especially in temporary work, where back-filling and rapidly changing business environments would create an enormous cost and compliance burden.
- Health insurance contributions while on leave: As proposed, the regulations do not provide a mechanism for employees to contribute to ongoing health-care coverage or a process by which an employer may transition and employee from current health-care coverage to COBRA per current practices.
- Multiple employers: How will benefits be administered when an employee is employed on a part-time basis by two or more employers? Specifically, when one employer opts out of the state program and the other does not.
- Payroll Tax:May employers elect to cover the employee portion of the payroll tax for some classes of employees but not all classes of employees?
- Timing of payroll tax: Large employers typically pay insurance premiums on or about the month for which the insurance coverage applies. The pre-payment of the payroll tax is problematic in the sense that it will be impossible for an employer to know if they are going to self-insure or use a private plan for January 1, 2021 by July 1, 2019. Likewise, insurance companies will not have developed private plans in time for July 1, 2019
- Appealing a Private-Plan Denial:allowing individuals to appeal private plan denials will result in all private plan denials being appealed, thus reducing the administrative efficiencies of offering private plans.
AIM submitted to the state a relined version of the proposed regulations with all the comments proposed by AIM members.
Employers who wish to review the relined document or who wish to receive regular updates on paid family and medical leave may contact Brad MacDougall, firstname.lastname@example.org.