The Massachusetts Department of Family and Medical Leave (the Department or DFML) is auditing employers and covered business entities for compliance with certain required notifications to the workforce generally (i.e., workplace posters) and covered individuals specifically (i.e., employee acknowledgements).
This alert is directed to Massachusetts employers providing Paid Family & Medical Leave (PFML) benefits through the Commonwealth’s PFML State-plan through the DFML.
The Department initiates the process by emailing a 5-page “Notice of Audit into Compliance With Mandatory Notice Requirements Warning: Possible Civil Fine for Violations or for not Responding to this Notice” (the Audit Letter) to the employer or covered business entity. The Audit Letter consists of two parts; the first part describes its purpose, what the Department is demanding and deadline for compliance. The second part starts on page 3 “Employer or Covered Business Entity Response to DFML Audit Form” (the Response Transmittal).
There are reports that an issue with notice of the audit is that it appears the email address on file with MassTaxConnect designated there as the tax administrator is the person to whom the Audit Letter is sent. That person may or may not be the same person designated as the “administrator” in the employer/covered business entity account created with the DFML – a different information system – used to review PFML applications, etc. This Department-specific employer account would have been set up through https://paidleave.mass.gov/login/.
If these reports are correct, the MassTaxConnect person may no longer be working for or otherwise representing the employer and as such, the employer/covered business entity may not be aware of the existence of the Audit Letter or, receipt of the Audit Letter may be delayed.
Deadline for Response:
No later than 21 calendar days from the date of the Audit Letter.
Information and Documents Department is Demanding:
The response is to include answers on the Response Transmittal such as information about each “business address” where the employer/covered business entity has at least one employee or self-employed individual that performs work in Massachusetts.
The response is required to include with the Response Transmittal documents and information regarding:
- The Workplace Poster on PFML
Item required: what the Response Transmittal calls the “Workplace Poster” described as the posting on each of the employer/covered business entity premises prepared or approved by the Department providing notice of PFML benefits.
How to produce to the Department: a scanned or digital picture, or copy.
- The “Template/Form” used containing acknowledgement of receipt of information about PFML from employee/self-employed individuals
Item required: what the Response Transmittal calls the “Written Notice (a.k.a. PFML details provided to each member of workforce)” and described as the “form or template” used “most recent[ly]” to notify the employer/covered business entity’s workforce individually with the information called out in G. L. c. 175M, § 4(a). More on the “Written Notice” below.
How to produce to the Department: a scanned or digital picture, or copy of the form or template used most recently.
- The Certification
With the above, and on the Response Transmittal, a person is then required to date, sign and “certify” that the answers and documents provided are true and accurate and that the person signing is authorized to sign on behalf of the employer or covered business entity, and timely file same.
How Audited Material to be Filed with Department:
By mail or uploaded to Department’s web portal “Employer or Covered Business Entity Response to DFML Investigation.”
Civil Penalties for Violations or for Failing to Respond:
By statute, the employer or covered business entity shall have the burden of demonstrating that it complied with the required notifications in § 4(a) and for any failure to comply, the civil penalty imposed shall be $50 per employee and per self-employed individual with whom it has contracted, and for each subsequent violation, a civil penalty of $300 per employee or self-employed individual.
Department’s Notification of Failure to Comply with Audit Request and Imposition of Fine:
If violations are determined, the Department closes the audit process by emailing a 3-page “Notice of Civil Fine for Failure to Comply With Mandatory Notice Requirements.” That notice indicates how the Department determined the employer/covered business entity failed to meet its burden, demands a civil fine, states a “formal invoice” will be sent at a later date and advises how, where and by when to request an appeal of the determination in lieu of paying the fine.
The total civil fine claimed by the Department is calculated based on the employer “being deemed to have [“X” number] of employees,” where X, is “a number determined using the average number of employees [the employer or covered business entity] had during each of the last four full quarters.”
Appeal Deadline and Administrative Hearing:
The decision will become final unless the employer/covered business entity contests the imposition of the civil penalty by appealing within ten calendar days of receipt of the Notice of Civil Fine, unless the tenth day falls on a Saturday, Sunday, or legal holiday; in which case the last day to appeal is the “business day next following the tenth day.” According to the Notice of Civil Fine, by timely appealing the determination and choosing a hearing, the matter will be adjudicated by administrative hearing held before a representative of the Department. The hearing will be held according to the administrative procedures for informal/fair hearings.
More on the “Written Notice” and Perfecting “Delivery” of the Written Notice of PFML for New Hires:
During the fall of each year, the Department publishes on its website the so-called “Written Notice,” for use as a template by the employer/covered business entity, if it so chooses. The Written Notice template is updated and revised by the Department including adjusted contribution rates and is geared to whether the workforce is above or below 25 employees/self-employed individuals. The Written Notice template is required to contain information about how and where to file for paid leave, rights to reinstatement, contribution deductions, etc.
The Written Notice, once customized for the particular employer/covered business entity, is to be “issue[d]” to the employee “not more than 30 days from the beginning date of the employee’s employment.” For self-employed individuals, the Written Notice is required to be “provide[d]” “at the time” the “contract” is made.
As noted, the burden will be on the employer/covered business entity to show it has delivered the required Written Notice to the required covered individuals. This is achieved by obtaining the employee/self-employed individual’s “written acknowledgement of receipt” evidenced by his/her printed name, signature and date on the Written Notice.[1]
Oddly, the Legislature wrote into the statute that if the employee/self-employed individual “refuses to sign such acknowledgement [contained in the Written Notice],” the employer/covered business entity is required to somehow get the individual to “sign[] a statement indicating” that he or she refused to acknowledge delivery of the Written Notice.
Possible Consequence of Failure to Obtain Signed Acknowledgement of the Written Notice:
If the employer/covered business entity doesn’t get a signed acknowledgement back from the employee/self-employed individual, or the “signed statement indicating the employee’s refusal to sign” the sanction is two-fold: (1) the normal requirement under the law to generally require the employee to give the employer 30 days’ notice prior to taking paid leave is waived (meaning no notice); and (2) the employer may have an issue in truthfully making the certification in the Response Transmittal, potentially resulting in the civil penalties outlined above.
Employer Action Plan – Readiness for Audit Letter:
| • | Verify and if Needed Update Contact Information in MassTaxConnect and Regularly Review and Update Representative Contact Information in this Portal |
| • | Make HR Aware of DFML Auditing and Critical Importance of Timely Response to Notices Received |
| • | Provide Compliant Workplace and Eligible Employees Notification of PFML (posters in English and if 5 or more employees or self employed individuals of that workplace whose primary language is not English, then other language if such poster is available from the Department; “Written Notice” for acknowledgement and annual rate-sheet notifications in his or her primary language) |
| • | Maintain Records of Written Acknowledgement of Written Notice of PFML for New-Hires |
Dated: Sudbury, MA
March 13, 2024
Andresen & Borovick, LLP
323 Boston Post Road
Sudbury, Massachusetts 01776
www.abmasslaw.com
Tel: (978) 443-6868
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[1] Note that if the business uses the Department’s template/form, in addition to the date/signature on the last page, there is a requirement on an earlier page of the Written Notice for the employee to initial next to the contribution tables for PFML withholdings from pay. In addition to the Written Notice template, the Department also prepares a “rate sheet” which the employer/covered business entity is required to be distributed to each covered individual annually. The rate sheet, unlike the Written Notice does not require acknowledgement of receipt.