Baker Signs A Delay Of Paid Leave Payroll Tax Into Law

Gov. Charlie Baker made quick work of a bill imposing a three-month delay to the start of a payroll tax to fund paid family and medical leave benefits for all Massachusetts workers, signing it within 90 minutes of its final legislative vote.

The law delays until Oct. 1 the start of payroll tax contributions to fund the estimated $800 million paid family and medical leave program launched so workers can more easily take care of themselves and their families without facing financial crises.

The fledgling Department of Family and Medical Leave planned to begin collecting a 0.63% payroll tax from employers July 1 to fund the program, but business and advocacy groups raised concerns about their ability to prepare for the new tax.

A joint statement issued by the governor, House speaker and Senate president earlier this week committing to the delay was meant to give employers a measure of certainty about what will be expected of them once those contributions begin.

Though Baker administration officials confirmed that they had proposed to increase the payroll tax rate from 0.63% to 0.75% in order to collect the same amount of money in a shorter period of time, the new law does not appear to have altered the tax rate.

The new law calls for up to 12 weeks of job-protected paid leave to care for a seriously ill or injured family member, to care for a new child, or to meet family needs arising from a family member's active duty military service. It also authorizes up to 20 weeks of job-protected paid leave to recover from a worker's own serious illness or injury, or to care for a seriously ill or injured service member.

The new law does not delay benefits, which will become available on Jan. 1, 2021 for workers seeking time off to bond with a new child, take care of a sick or injured service member, or to tend to a serious personal health condition.

On July 1, 2021, benefits will be made available for workers to care for a family member with a serious health condition.