BOSTON – Beacon Hill leaders are putting the brakes on the state’s new paid family and medical leave law to give businesses more time to comply with the program.
After weeks of prodding from business leaders, Gov. Charlie Baker, Senate President Karen Spilka, and House Speaker Robert DeLeo issued a statement late Tuesday saying the trio agreed to a three-month delay of required contributions under the Paid Family and Medical Leave Act “to ensure businesses have adequate time to implement” the program.
The Senate moved quickly Wednesday to approve the deal as part of a supplemental spending bill. It must still pass the House of Representatives before heading to Baker’s desk.
“This is a victory for the little guy,” said Bill Tinti, a Salem lawyer and legal adviser to the North Shore Chamber of Commerce, who said many small business owners weren’t prepared for the new law to go into effect. “Small businesses just don’t have the resources that big business have to implement such a complicated law. So this delay certainly will help.”
He pointed out that state regulations accompanying the paid leave law were only released by Attorney General Maura Healey’s office in April, and are not finalized.
“This delay will allow the regulations to become final, so that people can understand what the impact of this law will be and how it applies to them” Tinti said.
Under the law, which was set to go into effect on July 1, Massachusetts workers are eligible for up to 12 weeks of paid leave to care for a family member, or up to 20 weeks of paid leave due to illness. Workers and employers will share the cost of funding the program through a new payroll deduction, similar to the way unemployment insurance is handled.
The program is mandated under the so-called “grand bargain” agreement signed by Baker last year. In addition to creating paid leave, the deal hikes the minimum and sub-minimum wages, requires an annual two-day sales tax holiday, and phases out a law requiring retailers to pay workers time-and-a-half on Sundays and holidays.
Last week, a bipartisan group of lawmakers, business and labor leaders wrote to Baker, DeLeo and Spilka, asking them to delay implementation of the law.
“Delaying implementation will allow all stakeholders to better understand the mechanics of the law and better position employers to be in full compliance on day one,” said Sen. Barry Finegold, D-Andover, one of more than 50 lawmakers who signed onto the letter. “This is simply too important an issue to rush.”
Pro-business groups praised the agreement but warned that implementation will still be a long road for employers and the state.
“Ultimately, everyone agrees that the timing of this new law has made it very difficult for employers, employees and for the marketplace, which is trying to come up with private sector alternatives to the state program,” said Chris Geehern, executive vice president of Associated Industries of Massachusetts, a business lobbying group.
Geehern said making the law effective will require a whole new bureaucracy.
“The state is creating, from scratch, a program on the scale of the $1 billion unemployment insurance system,” he said. “To do that, in essentially less than a year, is a tall order.”
The Senate bill earmarks $3.5 million for the newly created state Department of Family and Medical Leave, which will oversee the program, while clarifying several requirements of the law and adding provisions to fine employers who fail or refuse to make contributions when it goes into effect on the new Oct. 1 implementation date.
Chris Carlozzi, Massachusetts director of the National Federation of Independent Business, said most business leaders would prefer the law be repealed.
“Many of the fears and concerns that business leaders have about the new law will still be in place after three months,” he said. “They aren’t going away.”
Carlozzi said a new wrinkle is that the payroll tax might need to be increased to make sure it is solvent, with a three month delay reducing the amount collections for the year.
“The state is required to ensure that the fund is solvent,” he said. “So the concern is that contribution rate will have to increase to keep the fund where it was supposed to be.”
Christian M. Wade covers the Massachusetts Statehouse for North of Boston Media Group’s newspapers and websites. Email him at firstname.lastname@example.org.