Paid Family Leave and Your Small Business
Paid Family Leave- a Game Changer for Small EmployersUntil this year, only businesses with more than 50 employees had to pay attention to mandatory family and medical leave under federal law, which has historically always been unpaid leave. Two changes in the last year mean businesses of any size in Massachusetts need to address leave policies for their employees.
One change was COVID-19. For at least a little while longer, businesses of all sizes need to comply with the Families First Coronavirus Relief Act, which mandates partially paid leave for certain situations relating to the coronavirus. You can read more about COVID-related family leave here. The second took effect January 1, 2021, and is a permanent change. That is the roll out of the new Massachusetts Paid Family and Medical Leave program. Though you are not responsible as a small employer for funding the paid leave, there are important aspects of the law that you need to be aware of as a small business owner. A misstep on these requirements could leave your business vulnerable to expensive employee lawsuits, and potentially crippling liability. |
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Massachusetts Paid Family Leave Basics
The PFLMA is funded by employee contributions through payroll deductions, which began in the fall of 2019. Employers with more than 25 employees had to bear a portion of those contributions, but smaller employers were allowed to remit those contributions 100% from employee earnings. These funds will be used, much like payments into the unemployment fund, to provide the paid weekly benefit to eligible workers.
Employees who are eligible may take up to 12 weeks per benefit year for family leave (for example, birth or adoption of a child, care for an ill family member who is in military service, and after July 1, 2021, care for a family member with a serious health condition). They may also take up to 20 weeks for their own serious health condition. Total leave in a benefit year for any purpose cannot exceed 26 weeks.
Though you do not have to directly pay employees while they are on leave, it is important to remember that this is job-protected leave. That means when the employee returns, they must be reinstated to their original position or its equivalent. It also means the leave cannot affect their seniority, advancement, or accrual of sick or vacation time. If you provide health insurance or other benefits to your employees, you must also continue those benefits during the leave for the employee who is on leave.
Employees who are eligible may take up to 12 weeks per benefit year for family leave (for example, birth or adoption of a child, care for an ill family member who is in military service, and after July 1, 2021, care for a family member with a serious health condition). They may also take up to 20 weeks for their own serious health condition. Total leave in a benefit year for any purpose cannot exceed 26 weeks.
Though you do not have to directly pay employees while they are on leave, it is important to remember that this is job-protected leave. That means when the employee returns, they must be reinstated to their original position or its equivalent. It also means the leave cannot affect their seniority, advancement, or accrual of sick or vacation time. If you provide health insurance or other benefits to your employees, you must also continue those benefits during the leave for the employee who is on leave.
What You Need to Know About Retaliation
The Massachusetts Paid Family Leave law makes it illegal to retaliate against an employee for taking leave under the PFLM program. One challenge for small businesses is that "retaliation" may cover a broader range of things than you might assume.
For example, imagine you have an employee on leave for the full 26 weeks. This is half a year- a long time for a small business to operate without a key employee, at least without some changes. You may reorganize other people's roles in that six months, and in the process of doing so realize that you can actually operate with fewer employees. You may hire and train a replacement for that time period and not want to lose your investment in that person by letting them go at the end of the employee's leave. In either situation, though you do not have to put the employee in exactly the position they were in before leave, you are required to find a comparable role for them at the same compensation when they return.
You also need to consider what to do if an employee who was already struggling with job performance requests and takes PFML. The new law presumes that if a termination or demotion occurs within 6 months of a leave, the reason was retaliatory. Put another way, unless you can prove by clear and convincing evidence that you would have taken the same job action in the same way without the leave, that employee could recover damages from you, and potentially triple damages under the PFMLA.
For example, imagine you have an employee on leave for the full 26 weeks. This is half a year- a long time for a small business to operate without a key employee, at least without some changes. You may reorganize other people's roles in that six months, and in the process of doing so realize that you can actually operate with fewer employees. You may hire and train a replacement for that time period and not want to lose your investment in that person by letting them go at the end of the employee's leave. In either situation, though you do not have to put the employee in exactly the position they were in before leave, you are required to find a comparable role for them at the same compensation when they return.
You also need to consider what to do if an employee who was already struggling with job performance requests and takes PFML. The new law presumes that if a termination or demotion occurs within 6 months of a leave, the reason was retaliatory. Put another way, unless you can prove by clear and convincing evidence that you would have taken the same job action in the same way without the leave, that employee could recover damages from you, and potentially triple damages under the PFMLA.
How You Can Protect Your Business from PFMLA Liability
The first, and most important, thing to do as a business owner is to make sure you have a basic understanding about how the process works. The state has published an employer's guide to paid family and medical leave. This is a good resource for understanding the basics, reviewing some frequently asked questions, and downloading the notices you are required to post in the workplace.
Second, consider establishing and documenting a process for handling leaves requested by employees. This will help ensure that the people managing the process know the steps the employer has to take, including the process for bringing an employee back to work that complies with the PFMLA.
Third, consider reviewing and revising your employment policies, especially feedback and discipline policies, for all employees. The mental notes you took to yourself about an under-performing employee are likely not going to suffice as "clear and convincing evidence if that employee returns from leave and continues to struggle. Similarly, if you scramble at the time of termination or discipline to document all of the things that concerned you before the leave, it is likely to be seen by a judge or jury as an after-the-fact attempt to justify a retaliatory decision.
A regular practice of providing written feedback to all employees is not only a good management practice, but will ensure the record is clear about employee performance if and when a termination or disciplinary decision has to be made.
Also, the Department of Family and Medical Leave has adopted a rule that an employer's application of a preexisting employment rule or policy shall be deemed clear and convincing evidence to rebut the presumption of retaliation. This means it is critically important to be able to prove the existence of a pre-leave policy. For example, if employees can be terminated for unexcused absences, time card inaccuracies, repeated unsatisfactory reviews, or any other reason, you should have that in a written policy before anyone takes a leave.
Second, consider establishing and documenting a process for handling leaves requested by employees. This will help ensure that the people managing the process know the steps the employer has to take, including the process for bringing an employee back to work that complies with the PFMLA.
Third, consider reviewing and revising your employment policies, especially feedback and discipline policies, for all employees. The mental notes you took to yourself about an under-performing employee are likely not going to suffice as "clear and convincing evidence if that employee returns from leave and continues to struggle. Similarly, if you scramble at the time of termination or discipline to document all of the things that concerned you before the leave, it is likely to be seen by a judge or jury as an after-the-fact attempt to justify a retaliatory decision.
A regular practice of providing written feedback to all employees is not only a good management practice, but will ensure the record is clear about employee performance if and when a termination or disciplinary decision has to be made.
Also, the Department of Family and Medical Leave has adopted a rule that an employer's application of a preexisting employment rule or policy shall be deemed clear and convincing evidence to rebut the presumption of retaliation. This means it is critically important to be able to prove the existence of a pre-leave policy. For example, if employees can be terminated for unexcused absences, time card inaccuracies, repeated unsatisfactory reviews, or any other reason, you should have that in a written policy before anyone takes a leave.
How Our Employment Lawyers Can Help
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We can help you prepare for possible PFMLA leaves by reviewing your policies and practices, helping you put in place a system for compliance, and making sure you have provided the required notices to employees. Should a problem arise with a specific employee, we can also help you navigate that situation before you find yourself facing an actual or threatened lawsuit. You can use the button below to schedule a call back from a member of our team, or give us a call at 781-784-2322.
