Paid Family and Medical Leave Not Ready for Prime Time in Massachusetts, Supporters Say

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The soon-to-be-implemented paid family and medical leave tax in Massachusetts has so many problems that its supporters are calling for a three-month delay in implementing it, and many state legislators who approved the bill last year agree.

A coalition of labor and business groups who negotiated the so-called “grand bargain” last summer recently called for state legislators to delay the 0.63 percent payroll tax until October 1 instead of July 1, as currently provided by the new state law.

Fifty-two state legislators signed a letter earlier this week supporting the proposed delay, according to State House News Service.

Governor Charlie Baker, a Republican, signed the paid family and medical leave bill in June 2018.

Earlier this week Baker told State House News Service that the new state Department of Family and Medical Leave is ready to start collecting the new payroll tax from employers on July 1 to provide an estimated $800 million for the new program, which is designed to allow employees who qualify to take leave in the event of a serious personal or family problem without leaving them destitute.

“We’ve done the work to be ready. The systems are in place, the operating model is up,” Baker said, according to State House News Service.

But the governor also acknowledged a delay may be in the works.

“We’ve talked with these guys about it a bit over the course of the past few days. I’m expecting and anticipating that everybody knows that if we’re going to do something about this, we probably need to do it this week,” Baker said, according to State House News Service.

The coalition of supporters wants a $3.5 million appropriation “In order to ensure that there is a smooth roll out,” according to a letter signed by coalition members May 20.

“This appropriation would support the department’s communication and outreach plan to employers and individuals,” the letter states.

Supporters of the delay also want formal guidance from the Massachusetts Department of Revenue on the tax implications of the benefit, pending a ruling by the federal Internal Revenue Service.

They also say the legislation needs clarifications, including a change that would make it clear that taking intermittent leave or a period shorter than the maximum allowable reduces the remaining leave available to a worker. Another proposed change would make it clear that that an employee can take leave for a serious health condition if it “makes the covered individual unable to perform the functions of the covered individual’s job,” according to the May 20 letter.

The May 20 letter was signed by Debra Fastino, executive director of the Coalition for Social Justice and co-chairman of Raise Up Massachusetts; John R. Regan of Associated Industries of Massachusetts; J.D. Chesloff of the Massachusetts Business Roundtable ; Elizabeth Whiteway, senior attorney of Greater Boston Legal Services; Carolyn Ryan of the Greater Boston Chamber of Commerce; Chris Condon, political director of Service Employees International Union Local 509 and a member of the steering committee of Raise Up Massachusetts; Nancy Creed of the Springfield Regional Chamber; and Jesse Mermell, president of the Alliance for Business Leadership and a member of the steering committee of Raise Up Massachusetts.

The groups represented hammered out the so-called “grand bargain” last summer that provided support for a sharp increase in the minimum wage and the creation of the forthcoming paid-family-and-medical-leave program, in exchange for concessions to businesses, including the elimination of mandatory time-and-a-half pay on Sundays to wage workers and the creation of two sales-tax holidays a year.