Massachusetts employers should be on notice of two significant changes to the state’s Paid Family and Medical Leave program that will significantly impact employers in the Commonwealth.  

New Benefit: “Topping Off” – Effective 11/1/23 

During most paid leave, workers only receive a portion of their normal salary.  Topping off will allow workers on leave to get their full salary in the form of state provided PMFL benefits + employer provided paid time off.  

Currently, topping off is available for employees whose companies get their PFML coverage through a private plan, but not for those participating in the state plan. This new requirement will take effect almost immediately and will begin in less than one month on November 1, 2023. 

Topping off is optional and will be at the discretion of the employee taking the qualified leave. The employee can choose to top off or save their paid time off for later. Employers must grant requests to accommodate topping off. AIM anticipates that employers will receive a notice from the state describing the employee’s compensation on leave and the employer will be responsible for calculating the difference and then pay the employee for the paid time off. 

For example, employee A will receive 80% of her salary in PMFL benefits from the state during her leave. Employee A can use her vacation time to supplement her leave. She will use 1/5 of a vacation day per day or 1 full vacation day per week to reach 100% wage replacement.  

The Legislature adopted the same provision in last year’s budget. However, Governor Baker vetoed the proposal, and the Legislature did not override that veto. This year Governor Healey amended the proposal to make topping off retroactive to July 1, of 2023. The AIM Government Affairs team was able to defeat this confusing and burdensome proposal.  

AIM anticipates that the Department of Family and Medical Leave (DFML) will be issuing additional guidance on how to comply with new requirements. AIM will share that information as soon as it is available.  

Topping off was, again, approved in this year’s budget and is just now becoming law due to the Governor’s amendment and the Legislature’s rejection of that amendment. 

New PFML Tax Rate – Effective Date 1/1/2024 

Last week, Department of Family and Medical Leave (DFML) announced the new contribution rate for 2024 will be a 0.88% assessment on eligible employee wages. This represents a 40% increase from the 0.63% rate in 2023.  

Every year, DFML must reassess the contribution rate which is paid for by both employers and employees and set a new rate for the following year. The Department assesses the total benefits paid during the previous year and the amount remaining in the Family and Employment Security Trust Fund (Trust Fund). As a rule, the Trust Fund must attempt to collect 140% of the previous year’s expenses.  

PFML is a relatively new program, and more workers are becoming aware of it and are now utilizing the benefit. AIM anticipates the reason behind the significant spike in the rate is because DFML anticipates 20% more benefits to be paid out next year.  

The AIM Government Affairs Team will be closely monitoring this situation and are conveying our concerns with the drastic increase in PFML costs for 2024 to the Healey-Driscoll Administration.  

For questions or comments, please contact Sam Larson at slarson@AIMnet.org