Paid Family Leave and Your Small Business
Paid Family Leave- a Game Changer for Small Employers
In the past, only businesses with over 50 employees needed to consider mandatory family and medical leave under federal law, and it was traditionally unpaid. However, recent changes in Massachusetts have made it crucial for businesses of all sizes to address their leave policies.
Fully effective as of July 1, 2021, the Massachusetts Paid Family and Medical Leave program requires most employers, regardless of size, to provide job-protected family and medical leave to their employees.
While small employers aren't responsible for funding the paid leave, there are essential aspects of the law that you need to be aware of. Failing to do so could expose your business to costly employee lawsuits and potential liability.
Massachusetts Paid Family Leave Basics
The Massachusetts Paid Family and Medical Leave Act (PFLMA) is funded through employee contributions via payroll deductions. Employers with more than 25 employees had to share a portion of these contributions, while smaller employers could deduct 100% from employee earnings. These funds will be used, similar to payments into the unemployment fund, to provide a paid weekly benefit to eligible workers.
Eligible employees can take up to 12 weeks per benefit year for family leave, including the birth or adoption of a child, caring for an ill family member in military service, and after July 1, 2021, caring for a family member with a serious health condition. They can also take up to 20 weeks for their own serious health condition, but the total leave in a benefit year for any purpose cannot exceed 26 weeks.
While you don't have to pay employees directly during their leave, it's crucial to understand that this is job-protected leave. When the employee returns, they must be reinstated to their original position or an equivalent one. Leave should not impact their seniority, advancement, or accrual of sick or vacation time. If your business provides health insurance or other benefits, you must also continue those benefits during the employee's leave.
What You Need to Know About Retaliation
The Massachusetts Paid Family Leave law prohibits retaliation against an employee for taking leave under the PFLM program. Small businesses should note that "retaliation" may cover a broader range of actions than expected.
For example, if an employee is on leave for the full 26 weeks, a small business may need to make organizational changes during this time. If these changes result in not needing the employee upon their return, the business must find a comparable role with the same compensation.
Additionally, if an employee who was already struggling with job performance takes PFML, the law presumes any termination or demotion within six months of leave is retaliatory. To avoid potential damages, it's essential to handle such situations carefully.
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How You Can Protect Your Business
As a business owner, there are steps you can take to protect your business from liability under PFMLA:
- Understand the Process: Gain a basic understanding of how the PFML process works. The state offers an employer's guide to paid family and medical leave, which covers the basics and frequently asked questions.
- Establish a Leave Handling Process: Document a clear process for handling leave requests from employees. This ensures compliance with PFMLA guidelines, including the process for bringing an employee back to work.
- Review Employment Policies: Consider reviewing and revising your employment policies, especially feedback and discipline policies, for all employees. Clear, written feedback can serve as evidence of a legitimate reason for discipline or termination if an employee returns from leave and continues to struggle. Make sure to establish and document pre-leave policies that justify any actions taken.
Wondering How to Handle an Employee PFMLA Leave?
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