Late Tuesday evening, news broke from Beacon Hill that the payroll tax funding the Paid Family and Medical Leave Act – scheduled to take effect on July 1st – is being delayed three months to October 1, 2019.  According to a joint statement issued by Governor Baker, House Speaker DeLeo, and Senate President Spilka, the delay is intended “[t]o ensure businesses have adequate time to implement the state’s Paid Family and Medical Leave program….”  It is expected that the legislature will pass, and the Governor will sign, an emergency bill over the next few days to officially delay the implementation of the payroll tax.

The joint statement also foreshadowed the legislature’s intent to “adopt technical changes to clarify program design.”  At this time, it is not clear what “technical changes” the legislature is considering.  It appears, however, that to maintain the amount of pre-funding and not reduce total contributions paid to the new family and medical leave trust fund, the contribution rate will be increased from .63 percent to .75 percent of wages when withholding of contribution amounts begin on October 1, 2019.

We will continue to monitor all developments regarding the Paid Family and Medical Leave Act.  Please contact any member of the Labor, Employment and Employee Benefits Group if you have any questions.