New Legislation Brings Relief to Massachusetts Employers, Offers COVID-19 Emergency Paid Sick Leave Program | Locke Lord LLP
Yesterday, Governor Charlie Baker enacted a bill that grants tax relief to Massachusetts employers.
The new legislation freezes employer contributions to the unemployment system for 2021 and 2022 and it also offers tax breaks to companies that have received some funding from the CARES Act. This is because it allows businesses to deduct canceled Paycheck Protection loan amounts when calculating their gross Massachusetts income for tax purposes.
In order to help the state repay interest on federal loans taken to cover deficits in the unemployment system, the law imposes a tax on employers. The tax amount is the reserve percentages in the employers ‘unemployment insurance account and is in addition to employers’ current contributions to the state unemployment program.
The bill presented to Governor Baker also included provisions for the establishment of a paid vacation program for employees who must be absent from work for reasons related to COVID-19. Governor Baker returned these articles to the Legislature with the following modifications:
- Require that employees who take paid COVID-19 sick leave receive at least their regular rate of pay, but not more than $ 850, or two-thirds of the paid family leave rate.
- Eliminate employer reimbursement provisions and create a tax credit for certain employers. This suggested provision would allow employers, who are not eligible for federal tax credits, to receive $ 40 per employee, even if the employee does not take time off.
- Set September 30, 2021 as the end date for the COVID-19 emergency sick leave program.
The COVID-19 emergency sick leave provisions passed by the legislature and forwarded to Governor Baker, now to be determined, required employers to provide paid sick leave to employees who must:
- Get tested or receive treatment for symptoms of COVID-19
- Quarantine due to positive diagnosis of COVID-19
- Receive a COVID-19 vaccine or recover from a vaccine-related illness
- Caring for a family member who is in quarantine due to a positive diagnosis of COVID-19
- Caring for a family member who is being treated for symptoms of COVID-19
- Being absent from work because the employee is unable to work remotely due to symptoms of COVID-19
- Taking time off work to comply with a quarantine order or other decision requiring the employee to stay home due to exposure to COVID-19
- Caring for a family member who is subject to a quarantine order or other stay-at-home directive due to exposure to COVID-19.
The number of hours of leave that an employer had to provide depended on the number of hours worked on average by an employee. An employee who worked full time (40 or more hours per week) could take up to forty hours of paid COVID-19 sick leave. An employee who has worked part-time (less than 40 hours per week) would be entitled to paid leave equal to the average number of hours worked per week over a two-week period. Finally, employees who worked irregular hours would have been entitled to a leave equal to the average number of hours per week that they worked during the six months before taking the leave or, if the employee did not not worked for the entire six months prior to taking the leave, in an amount equal to the average number of hours the employee reasonably expected to work per week at the time of hiring.
We will provide updates to this QuickStudy as the Legislature considers Governor Baker’s amendments and returns the bill to its desk.