Under the new Massachusetts Paid Family and Medical Leave Law, M.G.L c. 175M (“MAPFML”), employees and other covered individuals in the Commonwealth will be entitled to a generous set of new paid family and medical leave benefits and rights beginning January 1, 2021. While no benefits are available under the MAPFML until 2021, the Commonwealth is requiring employers to file quarterly employment and wage detail reports and make quarterly contributions to fund MAPFML benefits far in advance of 2021. More specifically, the first quarterly reports and contributions to the Commonwealth’s MAPFML fund (i.e. to cover the period from October 1 to December 31, 2019) must be remitted on or before January 31, 2020.
In light of this approaching deadline, the following are the key steps relating to these quarterly reporting and contribution requirements.
Which Employers Must Remit Reports and Contributions on or before January 31, 2020?
In general, all Massachusetts employers and covered business entities are required to file quarterly reports with the Commonwealth, and employers and covered business entities with an average total workforce of at least 25 covered persons are required to remit quarterly contributions. (Note that, while not addressed in this post, self-employed individuals electing to participate in MAPFML must also remit reports and contributions quarterly).
Note, however, employers or covered business entities with an approved private plan exemption for both the family and medical leave programs need not file quarterly reports or remit contributions to the Department. Employers who received a private plan exemption for only one of the two leave programs (e.g. for medical leave but not for family leave) must submit quarterly reports and contributions with respect to the program for which an exemption was not received.
Please see our prior posts for more information on filing for a private plan exemption.
What Are the Key Reporting and Remittance Steps?
- Before beginning the quarterly reporting process, entities required to remit reports and/or contributions should gather all required submission information. This information includes the first and last name, the social security number, 2019 fourth quarter wage information, and the deduction for the medical contribution and the family contribution for each employee (or contractor, if applicable) employed by or engaged with the entity between October 1, 2019 and December 31, 2019.
- Entities required to report and/or remit must register for MassTaxConnect. In order to do so, entities need their MassTaxConnect username and password, as well as the date of their first payroll (i.e. October 1, 2019). The Department of Family and Medical Leave (the “Department”) has provided helpful instruction here: Register for Paid Family and Medical Leave contributions. Please note that the portal may have auto-registered the organization for a Paid Family and Medical Leave account type.
- Once registered and organized, entities required to report and/or remit must file a return providing requested information about its workforce and remit a contribution reflecting amounts owed for the period running from October 1, 2019 through December 31, 2019. The required information is provided in Step 1 above. Please note that entities should report 2019 fourth quarter wages in both the ‘Eligible YTD Wages’ and the ‘Wages This Quarter’ boxes on the MassTaxConnect return, as contributions were only withheld from fourth quarter earnings. The Department has provided detailed guidance here: File a Return and Remit a Contribution, as well as specific video guidance on how to upload this information by entering the information by individual employee, or uploading in bulk or excel.
- Once the employer or covered business entity has filed its workforce reporting information, MassTaxConnect will identify the appropriate tax due (a reflection of the number of employees/contractors and the earned wages), and request payment. Entities required to remit contributions can make an electronic payment from a checking or savings account, or make a credit or debit card payment. Once payment is made, the system will provide verification that the file was submitted and payment was made.
- Filers should print and keep a copy of this verification for their records. MassTaxConnect will also email the employer or covered business entity with the confirmation number and other details confirming submission.
What to Do Now
Entities doing business in Massachusetts should carefully review whether filing and remittance of contributions is required and, if so, start preparing for this process immediately (and file no later than January 31, 2020).
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Special thanks to Laura A. Mullery, Vice President Compliance, Employee Benefits Team Leader, Fred C. Church, Inc. for calling this process to our attention.