Employers Need to Know the Facts on Paid Family and Medical Leave

Avoiding the Pitfalls

Tim Netkovick calls it the “kicker” in the law — and it’s a kick that could bruise an unsuspecting employer.

The law in question is the state’s new Paid Family and Medical Leave (PFML) law, portions of which went into effect on Jan. 1, with others to follow on July 1. The law essentially makes Massachusetts the most generous state in the country when it comes to allowing workers to take leave for medical and family-care reasons.

And employers need to be careful how they respond to claims, said Netkovick, an attorney with the Royal Law Firm in Springfield.

“If somebody has utilized PFML, there is what I call a kicker in that statute that says, if there’s any adverse action taken against the employee within a certain period of time, then it’s presumed to be in retaliation,” he told BusinessWest.

Indeed, if an employee challenges an employer’s actions following leave taken under the PFML law, the burden is on the company to prove there was some justifiable reason for taking the adverse action that had nothing to do with the leave request.

“The law does have a very strong anti-retaliation provision baked in. Often, these types of laws do have an anti-retaliation provision, but this one is a little unique,” said John Gannon, an attorney with Skoler, Abbott & Presser in Springfield.

“If an employer does take some kind of negative action against the employee — termination, suspension, demotion, even a negative performance review — within six months of the last day they took leave, there is a presumption that the employer retaliated,” he explained. “The employer can rebut that presumption, showing the motive for the decision is not linked in any way to paid family or medical leave use, but it does open the door to more potential litigation in this area.”

It’s a challenge to prove the action was justifiable, though not impossible, Netkovick said. Still, it’s not a headache employers really want to deal with.

“That’s a challenge we’ve seen come up a few times, where there were issues with the employment relationship before that, and then, all of a sudden, someone goes out on PFML leave,” he said. “There’s not really a lot of guidance on that yet. It might be assumed to be in retaliation, but if you can show something concrete that has happened, hopefully you can get someone to agree with you in the court system. You have to make sure you have your documents in order.”

The PFML law runs concurrently with other applicable state and federal leave laws, such as the federal Family and Medical Leave Act (FMLA) and the Massachusetts Parental Leave Act. Similar to the federal FMLA, a Massachusetts employee who returns to work after taking leave under PFML law must be returned to same or similar position as he or she had prior to their leave.

The new law requires employers to provide eligible employees up to 26 total weeks of leave in a benefit year. Currently, employees may be entitled to up to 20 weeks of paid leave to manage their own serious health condition, and may also receive up to 12 weeks of paid leave to bond with a child who is newly born, adopted, or placed in foster care, and up to 26 weeks to care for a family member in the Armed Forces.

On July 1, employees will also be able to receive up to 12 weeks to care for a family member — the employee’s spouse, domestic partner, child, parent, sibling, grandparent, parent of a spouse, or parent of a domestic partner — with a serious health condition.

“There’s a department called the Department of Family and Medical Leave that oversees this whole program, and approves and denies claims,” Gannon said. “They’ve done a pretty effective job of getting the word out there about this program, particularly back in 2020 and early 2021 when it was going live. I remember seeing radio ads, print advertising, a lot of online ads as well.”

As a result, employees tended to know about it, and many held off on, say, elective surgery or put off parental leave for a newborn until after Jan. 1, so they could access the full benefits of the new law, he noted. “We did see a spike [in taking leave] in January and February, and we anticipate we’ll see another spike in July or August of this year when the family-leave components go live, and employees can take leave to care for family members with serious health conditions.”

 

A Rising Need

Patrick Leary, vice president of Work Benefits Research at LIMRA in Windsor, Conn., noted that interest in PFML started to rise several years ago, but has accelerated in recent years, especialy last year.

“More people became caregivers for their parents or other family members affected by COVID,” Leary said. “On top of that, parents took leave to care for their children when remote learning kept them at home.”

Peter Miller, a partner with Millbrook Benefits and Insurance Services in Springfield, added that Massachusetts’ PFML law offers benefits similar to a short-term disability benefit, but won’t replace the need for employers to provide short-term disability insurance.

Leave under the PFML program applies to most W-2 employees in Massachusetts, regardless of whether they are full-time, part-time, or seasonal. Unlike the federal FMLA, the Massachusetts PFML law says an employee is not required to work for a minimum length of time in order to be eligible for leave. However, an employee must meet minimum-threshold earning requirements in order to be eligible for leave under the law.

Notice requirements for the new law work both ways; employers must provide written notice of the PFML program to all employees within 30 days of the employee’s start date, while employees must inform their employers of their need to take leave under the law at least 30 days before the start of the leave, and before filing an application for leave with the state. Where reasons beyond an employee’s control prevent them from giving such advance notice, they must inform their employer as soon as is practical.

Employers don’t have to offer their workers the state benefit; they can opt out of it and apply for an exemption from paying PFML contributions, but only if they purchase a private plan with benefits that are as generous as the state’s plan, and which provide the same job protections, including the anti-retaliation provisions.

“You have two options — you can deal with the state Department of Family Leave they set up, or you can have your own third-party administrator,” Netkovick said. “The private plan has to be set up to match the state plan. There’s no requirement it has to be better, but it has to at least match with the state plan.”

One reason a company might do so is because a third-policy benefits administrator offered that service, and the employer may prefer communicating with that entity over dealing with the state.

Gannon agreed. “One of the perceived advantages to going with private plans is that you do have a little more control over the administration of the plan,” he said, noting that it can be frustrating when the state gets it wrong — for instance, if an employee has been granted 22 weeks of leave rather than 20 because of an administrative error, to cite a hypothetical example.

“There’s nothing you can do to reverse that, which is frustrating for employers,” he told BusinessWest. “With private plans, at least in theory, you can reach out to the plan administrator and ask, ‘why did you approve this for 22 weeks as opposed to 20?’ With the state, it’s more challenging to do that.”

One thing is clear — in allowing employees to take amounts of leave not typical across the country, the state is layering on an additional staffing challenge at a time when companies in myriad industries are already challenged by worker shortages.

“If the state department or your third-party administrator makes the determination this person qualifies under PFML, then there’s really not much you can do,” Netkovick said. “I know that’s created staffing issues for a couple of our clients, but they’ve been able to work that out. If there’s some kind of mandated ratio, I could see that becoming an issue — you might have to hire people on a temporary basis.”

Gannon agreed it can be a hurdle, particularly since employees are eligible for leave starting from day one on the job.

“It has been a challenge from a staffing perspective, especially these days,” he said. “Staffing would be a challenge without all these job-protected forms of leave, and now we have PFML, too.”

 

Know the Facts

One key requirement of the PFML law is that employers need to put it in writing for their workforce.

“It doesn’t have to be in the handbook, but it has to be in writing, advising people of their rights under PFML and the qualifications,” Netkovick said, adding that some companies have made it a part of the handbook because they were revising that manual anyway. “But others have made it as a standalone policy that everyone has to sign off on.”

Gannon has also seen employers approach the communication question in different ways. “We’ve had clients doing a complete update of their handbook, not just to make sure they’re compliant with this law, but to determine whether other policies need to be changed,” he said, such as call-out procedures that give an employer enough time to manage absences from a staffing perspective.

Of course, those written policies need to make clear the anti-retaliation elements of the law, too. If an employee files a lawsuit against an employer for violation of the PFML law and the employer is found to be in violation, numerous remedies are available to the employee, including reinstatement to the same or similar position, three times the lost wages and benefits, and even the employee’s attorney’s fees.

That’s why training managers and supervisors on all aspects of the law is especially important, Gannon said. “They’re the ones who may not realize how strong the anti-retaliation provisions are. Depending on the size of the business, an employer may rely on managers and supervisors, and if they unknowingly retaliate against someone, it could be a problem for the entire organization. It’s important for those in supervisory or managerial roles to understand the law and how strong those anti-retaliation provisions are.”

Netkovick agreed, adding that yearly trainings on all aspects of workplace law, including Paid Family and Medical Leave, is a good idea.

“Companies need to be aware of that retaliation provision — I think that’s the key,” he said. “It’s worthwhile to keep that in mind at the beginning, so you know what the lay of the land is in case something comes up after the fact.”

 

Joseph Bednar can be reached at [email protected]