2018 was a monumental year for Massachusetts legislation and 2019 will be the year to prepare for the implementation of new laws and practices. But the first step to making changes is to gain a proper understand of new legislation.
If you’ve paid any attention to the local news over the past year, then you know that Massachusetts has been a trailblazing force in an effort to improve working conditions for employees. Passed in July of last year, the Grand Bargain (An act relative to minimum wage, paid family medical leave and the sales tax holiday) sets a new standard for the quality of employee care.
If the gradual increase in minimum wage and sales tax holiday aren’t incentive enough, unprecedented improvements in parental leave opportunities are sure to please employees. Here’s everything you need to know.
Department of Family and Medical Leave
With changes as radical as the ones necessitated by the Grand Bargain, legislators have called for the creation of an entirely new department: The Department of Family and Medical Leave.
Developed as a division of the Workforce and Labor Department, this new department will oversee the administration of the paid leave program.
The paid leave program covers a variety of needs, from leave to care of ill family members to caring for a family member who is a covered servicemember. Nevertheless, the details of this new legislation should be especially exciting for all new parents.
Benefits for New Parents
Primarily, the shift from “maternity leave” to “parental leave” sets a more inclusive precedent for paid leave. This law takes into account the fact that fathers are just as important in the child-bonding process and allows leave for both parents.
The benefits afforded by the Grand Bargain are what some sources are calling a “victory” for fathers and mothers alike.
While some generous legislation in states like Washington outlined a paid leave for up to 18 weeks for mothers with pregnancy-related complications, Massachusetts’ new law offers an incredible 20 weeks of paid leave.
Outside of any pregnancy-related issues, the act allows for 12 weeks of paid leave for parents to bond with a new child. Furthermore, this new legislation allows paid leave for adoptions and the arrangement of foster care for a new child.
In terms of compensation, new parents are to receive 80 percent of their usual wages, up to half of Massachusetts’ average weekly wage, and half of the employee’s own weekly wage after that (up to $850 per week).
Changes for Businesses
These new updates to HR and payroll practices mean that your HR and payroll professionals need to stay on their toes to remain in compliance.
The changes brought about by The Grand Bargain and the accompanying Department of Family and Medical Leave mean some specific changes in payroll. According to this new act, starting in July of 2019, businesses of 25 or more people are required to begin contributing .63 percent of an employee’s earnings to a leave trust fund but will be able to offset the contribution by deductions of employees wages- 40% for medical leave and up to 100% for family leave. Small businesses less than 25 employees will not be required to contribute.
For human resource professionals, the Grand Bargain Act now requires that all businesses post notices about the new changes in leave practices and that all new employees are notified of their options for paid leave within 30 days of hiring. Failure to comply with this mandate can result in hefty fines for businesses. Whether it is through an update to your employee handbook, a faculty meeting, or new training for HR professionals, it is paramount that all employees are properly informed of these new changes so that they fully understand their rights.
New legislation of any kind can be a mixed bag of excitement and anxiety. To reap the benefits of these improved conditions for employees and avoid the consequences of falling out of compliance, contact the payroll and HR experts at Commonwealth Payroll & HR. Call us today at (978) 599-1500.