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MA Paid Family and Medical Leave: Updates on 1099 Workers and Private Plan Exemption

On June 17, 2019, the Massachusetts Department of Family and Medical Leave (DFML) posted final regulations, that went into effect as of July 1st.

1099 Workers

The MA Department of Family and Medical Leave has recently updated guidance on the inclusion of 1099-MISC workers with respect to the new leave law. This new guidance may provide welcome relief for some employers as it reduces the potential number of these workers within your organization that need to be considered covered individuals. A worker that is classified as a “true 1099” independent contractor is not considered a covered worker.

What does this mean? If a 1099-MISC worker can pass the three-part test under the MA Unemployment Statute than the employer is not required to consider the individual as a covered worker. The test criteria for the work of an independent contractor are as follows.

The work performed by the contractor:

  1. Is done without the direction and control of the employer; and
  2. Is performed outside the usual course of the employer’s business; and
  3. Is done by someone who has their own, independent business or trade doing that kind of work.

Conversely, if a worker is not able to pass this test than the worker is not considered an independent contractor. The employer is required to consider this worker when counting their workforce. If these workers comprise more than 50% of your workforce, they must be considered covered workers.

Private Plan Exemption Update

Applying for a private plan exemption should be a little less confusing now that the state will be requesting a “Declaration of Insurance” as the supporting documentation. The Declaration will be available from the insurer that the employer has selected to insure, or administer, private plan coverage. It serves as proof of future coverage for a plan that meets all of the requirements prescribed in the regulations. Declarations are now available from 10 insurers with more to be released over the next couple of weeks.

The declaration should be submitted along with your exemption form that is completed on the MassTaxConnect portal. As of October 1st your portal will feature a new Paid Family and Medical Leave account. In this new section, you will find the link to submit your application for an exemption. We strongly advise that employers obtain the declaration prior to filing for an exemption.

Key Dates Remain:

  • September 30, 2019: Deadline for distributing acknowledgment notices to employees
  • October 1, 2019: Payroll deductions begin for employers accessing the public plan
  • December 20, 2019: Submission deadline for private plan exemption applications
  • January 31, 2020: Final day to remit Q4 2019 contributions through MassTaxConnect

To learn more on the MA Paid Family & Medical Leave law, or other FMLA laws that might affect your business, contact your  local OneDigital Strategist.

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