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October 27, 2023

Supporters praise paid family and medical leave program while businesses eye contribution increase

A white woman with bangs and red glasses behind a podium that says Greater Boston Chamber of Commerce Photo | Courtesy of State House News Service Senate President Karen Spilka at a Greater Boston Chamber of Commerce breakfast

Elected officials and advocates cheered the state's paid family and medical leave program Tuesday and said they hoped increased awareness would lead to more employees taking advantage of the system, which approved more than 143,000 payouts last fiscal year.

Meanwhile, rising application numbers are set to play into a 39 percent hike in the program's employer contribution rate in 2024, as PFML enters its third year in existence, according to a Department of Family and Medical Leave spokesman.

In fiscal year 2023, the agency saw a 38 percent increase in benefit payments over fiscal 2022, the spokesman said, citing outreach efforts to potential claimants as a diver of the increase. A total of around $1.6 billion in benefits were paid out during PFML's first two years, and the department expects to see a 20 percent increase in payments in the current fiscal year.

Around 3.3 million workers in the Bay State are eligible to participate in PFML, which offers Massachusetts workers paid, job-protected leave to care for newborn or newly-adopted children, ill family members, or to take care of their own illnesses or injuries. The program was established in 2018 under the so-called Grand Bargain law, compromise legislation hashed out with buy-in from unions, advocacy groups, and the business community, and took effect during the first half of 2021.

Newly-elected Mass. AFL-CIO President Chrissy Lynch, one of the speakers at the State House event celebrating more than two years of PFML's operation, recalled how "valuable" it was to take care of her newborn children "without worrying about paying the bills." Lynch had that ability thanks to a union contract. She said that "every single worker deserves that peace of mind," now offered through PFML.

Jon Hurst of the Retailers Association of Massachusetts attended the celebratory press conference, and said afterwards that he "found it curious" no one mentioned the impending employer contribution increase, which is set to take effect Jan. 1.

The Department of Family and Medical Leave's director, William Alpine, fixed the 2024 contribution rate earlier this month, raising it to 0.88 percent of employee wages -- a 39 percent increase from the current 0.63 percent rate -- according to an agency spokesman.

In other words, if an employee earns $1,000 per week, the employer's contribution would rise from $6.30 per week to $8.80 per week.

Employees and certain employers contribute toward a state trust fund that covers the benefits, and factors considered in the rate-setting process include benefits approved during the prior year and the balance of the kitty that the payouts come from.

"And of course that hits both employers but also workers, right out of their paychecks on payroll taxes," Hurst told the News Service. "So whether you use the system or not, in this time of high inflation and high interest rates, do we really want to be raising taxes on the backs of the working people? It's an open question. And certainly I think most taxpayers aren't going to want to see, year-in and year-out, 40 percent payroll tax increases out of their paychecks. I know small businesses don't want to see those types of payroll taxes going forward, either."

Small businesses with less than 25 eligible employees are not required to pay an employer share into the contribution, according to DFML.

Other speakers at Tuesday's event lauded Gov. Maura Healey's Oct. 17 sign-off on a new law to allow so-called "topping off" of PFML benefits.

Healey wrote in a letter to the Legislature earlier this year that the change would allow "employees to supplement their weekly PFML benefit amount with accrued vacation time, sick time, or other paid time off to collect their average weekly wage," a combination that would enable workers to "fully replace the income they otherwise would have received if not on leave."

The amount a claimant receives in PFML benefits is based on their average weekly wage, the state average weekly wage, the benefit year and the type of leave being taken. For 2023, the maximum weekly benefit is $1,129.82. In 2024, the maximum weekly benefit will be $1,149.90.

That latest adjustment to PFML will "guarantee that workers don't face financial ruin because life prevents them from working," Lynch told the small crowd at the State House event Tuesday.

"Is [the PFML program] perfect? Of course not," said Rep. Kenneth Gordon, who filed the "topping off" language as a budget amendment in April. "Because no program of this size can start up the way it ends up. There are going to be fixes that need to be made. Fixes have been made already to this system."

Gordon said the practice of "topping off" was prevented by "an interpretation" of the law by Gov. Charlie Baker's administration, which he called "completely illogical."

But Hurst, a key player in the 2018 compromise talks that spawned PFML, said the idea "was specifically not included in the Grand Bargain."

"Yet they're going back now and making changes. ... Now it's in there," Hurst said. "Made it sound like it was a misinterpretation by the Baker administration. No, it was not in the original law. So I'm very concerned that unless there is some balance going forward on this very costly law, we may wake up one day and have a system very similar to our worst-in-the-nation UI [unemployment insurance] system."

Some attendees, including Sen. Jason Lewis, were set to testify Tuesday afternoon on bills to make further changes to the budding paid leave program.

"The main thing is the program, we think, has been very successful -- but there is still more we can do to make sure that all workers who are eligible can take advantage of it," the Winchester Democrat told the News Service.

One of Lewis' bills included the "topping off" component, meaning that the idea's public committee hearing arrived seven days after it was signed into law. Other sections of the legislation (H 1888 / S 1197) still in play would require employers to provide a PFML application to workers who consider taking leave, and require the department to "provide more disaggregated data so we'd have a better understanding of who's taking the program, who's benefiting from it, and who's not benefiting from it," Lewis said.

Senate President Karen Spilka, who sponsored paid leave legislation more than a decade before its final passage, told attendees that it became a priority because of her own experience leaving a newborn child at home while she returned to work.

"We just could not afford any more time for me to be off, to be honest with you," the Ashland Democrat said. Describing her first day back at work at a state agency, which did not offer paid family leave at the time, she remembered longing to be with her son.

"I remember trying to copy something in the copy machine, and that machine got stuck. The paper got stuck. And I, in front of everybody, just started crying. They thought it was because of the copy machine and the paper. 'Oh, we'll fix it, we'll fix it, Karen.' ... It really was a hard time, and it just made me realize that no one should ever, ever have to be forced to choose between a paycheck and their family," Spilka said.

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