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Massachusetts Paid Family & Medical Leave Rates Updated for 2022

The Department of Family and Medical Leave (DFML) has released next year’s MA Paid Family and Medical Leave contribution rates and weekly benefit amounts under the Paid Family and Medical Leave law, effective January 1, 2022.

 

NEW WEEKLY MAXIMUM BENEFIT AMOUNT

The MA Paid Family & Medical Leave weekly maximum benefit amount will increase from the current rate of $850 per week to a rate of $1,084.31 in 2022. This increase of more than 27% is determined by the PFML legislation that created the mandate.

NEW CONTRIBUTION RATES BASED ON STATE AVERAGE WEEKLY WAGE UPDATE

Employers with 25 or More Covered Individuals:
The new rate for the MA PFML Public Plan* will reduce from 0.75% to 0.68% of eligible wages. The combined contribution between the covered individual’s  rates breaks down to a medical rate of 0.56% and a family rate of 0.12%.

Employers with Less than 25 Covered Individuals:
The contribution amount for employers with fewer than 25 employees has been reduced to 0.34% of eligible wages for Calendar Year 2022 and may withhold up to 0.12% of eligible wages for an employee’s family leave contribution and 0.22% of eligible wages for an employee’s medical leave contribution. Employers with less than 25 covered individuals are not required to pay a share of the contribution but may do so at their discretion.

Employers with Private Plan Exemptions:
For employers with private plan exemptions, if the plan is insured, then the insurer will be releasing a new contribution rate for calendar year 2022 within the next few weeks . This rate may be different than the State’s public plan option, which is tied to changes in the state average weekly wage.

  • Employers with private plans can require employees to contribute to the cost of coverage, provided that the rates for employees are no greater than what their rates would be if they were participating in the State’s public plan.
  • Groups that have exemptions for the current year will need to renew their exemption in order to continue maintaining a private plan in the new calendar year 2022.

Employer Contribution Models:
There are no changes to the MA PFML contribution models that employers are required to follow.
Employers may require a portion of the benefit contributions be paid by employees up to the following levels:

  • Medical Leave:
    • Maximum Contribution Rate Paid by Employee: Up to 40% of the medical leave contribution can be paid by the employee.
    • Minimum Contribution Rate from Employer: Employers are required to contribute no less than 60% of the contribution rate. However, employers have the option to cover more than 60%.
  • Family Leave:
    • Up to 100% of the family leave contribution can be paid by the employee. Employers may pay a portion, or all, at their option.

HOW WERE THESE NEW RATES CALCULATED?

The changes to the PFML Public Plan rates are to accommodate contribution percentages needing to be met to account for the annual increase of the Massachusetts state average weekly wage (SAWW). In other words, the funds that go towards DFML are impacted by changes in SAWW based on wage contribution percentages being met, accounting for the increase to the SAWW.

As of October 1, 2021, the Massachusetts Executive Office of Labor and Workforce Development announced that the new state average weekly wage in Massachusetts has been set to $1,694.24 per week – from last year’s rate of $1,487.78 per week - and will take effect on January 1, 2022. This increase was fueled by employers increasing employee wages in response to the battle for retaining and finding top talent, besides the increase in the state minimum wage. In addition, many workers who lost employment over the past year due to the pandemic had earnings that were below the state average weekly wage. This pulled their wages out of the calculation which further increased the reported average.

Changes made to the PFML maximum weekly benefit amount were determined by the PFML legislation mandate. However, the paid leave law requires that after the first year of being on a workforce, the maximum weekly benefit amount be derived from the SAWW that is published on October 1st of each year.

If you're seeking to explore MA PFML Private Plan options, or have any questions, contact your local OneDigital advisor or the author, Darren Ambler, directly.

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