On October 17, 2023, the Massachusetts legislature approved changes to the Massachusetts Paid Family and Medical Leave (PFML) program allowing employees to supplement or “top off” their PFML benefits with with any available accrued paid leave (sick time, vacation, PTO, personal time, etc.) without reducing their PFML benefits. Although Cocoon prepares employee pay statements to identify estimated employer-provided pay under paid leave policies, Cocoon’s pay statements do not currently reflect employer-provided pay based on an employee’s use of the type of accrued paid time referenced in this PFML amendment. If your company provides employees this type of accrued paid time and employees on PFML choose to use it to top off PFML benefits, you will need to administer those payments with your internal team and/or payroll provider. We hope the following helps you better understand and prepare for this important MA PFML development.
Background
Previously, an employee’s use of accrued paid time during PFML leave would reduce their weekly PMFL benefit. Employees whose applications for PFML benefits are filed on or after November 1, 2023, may now choose to top off their PFML benefits with any available accrued paid time (sick time, vacation, PTO, personal time, etc.) without reducing their weekly benefit. If the application is filed on or after November 1, 2023, applications filed retroactively for a leave that began before November 1, 2023, are eligible for topping off. Massachusetts provides information on this change on its PMFL website.
For employees who choose to use accrued paid time to top off their PFML benefits, the combined weekly sum of PFML benefits and employer-provided paid leave benefits cannot exceed the employee’s Individual Average Weekly Wage (IAWW). Employers are responsible for ensuring compliance with this requirement.
Some observations
Employees have been and remain able to receive top off pay through a paid leave policy.
MA PFML appears to allow employees to elect to use accrued paid time as top-off pay as a matter of right (meaning they need not obtain their employer’s permission). However, federal FMLA may run concurrently with MA PFML and FMLA only permits use of accrued paid time as top-off pay if both the employer and employee agree to the top-off (source). Employers should determine what position they will take during overlapping PFML and FMLA leave periods.
An employee’s IAWW is a specific calculation that is viewable by registered Department of Family and Medical Leave (DFML) Leave Administrators. The IAWW may or may not be the same as the amount an employee or employer considers to be an employee’s regular weekly wages.
Registered DFML Leave Administrators should also be able to view any PFML payments
Authorized Cocoon Admins can view any estimated private insurance payments on their Cocoon dashboard
Cocoon’s pay statements do not reflect employee use of accrued paid time during leaves and Cocoon does not maintain records of employee paid time accruals.
Potential impact on your company
Facilitating top off pay through the use of accrued paid time may prove challenging for some employers. The following are some potential employer jobs to be done in connection with this development.
In preparation for employee requests to top off PFML with accrued paid time:
Determine if there are any PFML obligation or company inclination to inform employees of their right to use accrued paid time to top off PFML benefits
Determine if paid time policies provide employees paid time to top off PFML benefits.
Employers who have unlimited PTO policies may, in particular, need to review their unlimited PTO policy to assess whether employees may top off pay by using unlimited PTO benefits.
Determine if the company will permit use of accrued paid time as top off pay during overlapping PFML/FMLA periods
Develop a process to evaluate an employee’s available accrued paid time balance
Identify internal responsibility for calculating top off pay; Cocoon estimates for employer may be a starting point
Identify internal responsibility for monitoring PFML and/or private insurance payments to ensure employee’s combined weekly sum of PFML benefits and employer-provided paid leave benefits does not exceed the employee’s IAWW
Develop a repayment process for any top off overages
Upon an employee’s request to top off PFML with accrued paid time:
Calculate the amount of accrued paid leave to use as top-off pay by reviewing information on PFML benefits and any private insurance payments.
Ensure payroll includes top off pay
Ensure employee’s paid time usage is reflected in the employee's paid time balance
Monitor employee’s PFML and private insurance benefits for PFML leave period to identify any top off overages:
Identify employee’s IAWW
Identify employee’s PFML payments
Identify employee’s private insurance payments
Identify all employer-provided paid leave (through paid leave policies and any accrued paid time)
Calculate employee’s combined weekly sum of PFML, private insurance benefits and employer-provided paid leave benefits
Compare with employee’s IAWW to determine if there is any weekly overage
Implement repayment process for any top off overages
FAQs
Do I, as an employer, need to register as a Department of Family and Medical Leave (DFML) Administrator?
All employers should already have an internal person registered as a DFML Administrator. This individual would have been the one to grant Cocoon access to their MA PFML portal in order to assist in employer verification of MA PFML claims.
If I top up my employees to 100% for the duration of their MA PFML, do I need to do anything differently?
No, this amendment does not require any additional steps in those instances. However, it may be helpful to confirm whether there may be instances when your paid leave policies might not overlap fully with all PFML qualifying leaves. For example, an employee’s PFML leave period could potentially be longer than the period covered by many employer paid leave policies; PFML may cover leaves that are not covered under some employer paid leave policies; or PFML may cover some employees who are not eligible for paid leave under a company’s paid leave policies. It would be helpful to consider whether those circumstances are possible for your employees. If so, you may want to consider whether and how your accrued paid time policies should be applied in applicable PFML leave periods.
My company has an unlimited PTO balance to be used for sick and vacation time. Employees are expected to get approval from their manager if they need to take time out for 3 days. Do I need to do anything differently here?
Yes. First, you should determine whether and how your unlimited PTO policies apply to periods of PFML and other required periods of paid or unpaid leave. Many employers design PTO policies to avoid or limit their use during extended leave periods. Second, any required approval under your unlimited PTO policies likely only applies to the employee’s ability to receive employer-provided PTO, not the employee’s right to receive leave and pay under PFML and/or leave under other applicable laws such as FMLA.
What else should I be doing to prepare for this PFML change?
Applying paid time policies to leave periods can be tricky. Cocoon encourages you to review your paid time policies’ application to PFML and other qualifying leaves with legal counsel.
We hope you find this information useful. It is meant for general informational purposes only. Cocoon is not a law firm and this material is not intended as legal advice. Cocoon encourages you to work with your legal counsel to assess your obligations with regard to employee use of accrued paid time during MA PFML.