Determining your total workforce
As a Massachusetts employer, your responsibility for making contributions under the Paid Family and Medical Leave (PFML) law (M.G.L. c. 175M) depends on the makeup of your workforce. To make sure you're correctly assessed for contributions, it's important that you properly report the size and makeup of your Massachusetts workforce to the Department of Family and Medical Leave.
Your total workforce includes:
- All Massachusetts W-2 employees (full-time, part-time, or seasonal). Generally, if you withhold other payroll contributions for a W-2 employee on MassTaxConnect, they should be counted. These employees don't need to reside in Massachusetts to be covered.
- All Massachusetts 1099-MISC contractors. An MA 1099-MISC contractor is an individual or sole proprietor who resides and performs services in Massachusetts for whom you are required to report payment for services on IRS Form 1099-MISC.
You'll always report your total workforce numbers, but you're only responsible for submitting contributions on behalf of members of your workforce who are covered individuals for the purposes of the PFML law.
Each quarter, you'll be required to remit the required employee contributions for all covered individuals in your MA workforce. You may deduct all or part of the required employee contribution from amounts you pay to covered individuals. If your MA workforce has fewer than 25 covered individuals, you are not responsible for paying the employer's contribution.
Counting MA 1099-MISC contractors as covered individuals
In order for a 1099-MISC contractor to be considered part of your MA workforce count, they must:
- Perform services as an individual entity
- Live in Massachusetts
- Perform services in Massachusetts
If a contractor meets these criteria, you should count them as a member of your MA workforce.
It's important to note that MA 1099-MISC contractors count toward your total number of covered individuals only if they make up more than 50% of your total MA workforce (MA W-2 employees and MA 1099-MISC contractors combined).
Note that only services provided that would otherwise require the issuance of a 1099-MISC are subject to contributions. For a full description of when a 1099-MISC is required, please refer to the IRS guidance on reporting payments to independent contractors.
For the purposes of counting your workforce, professional corporations (PCs), Limited Liability Companies (LLCs), Sole Member LLCs, partnerships, and corporations are not individuals and should not be included in your count, even if you make payments to them by 1099-MISC. Those types of business entities should not have withholdings taken by an employer.
Partial list of excluded employment
Certain types of employment that are excluded under section 6 of the unemployment statute are also excluded from the PFML law, including:
- Services performed for a son, daughter or spouse
- If under 18, services performed for one’s father or mother
- Services performed by inmates of penal institutions
- Employment in the railroad industry
- Services provided by real estate brokers/salespeople and insurance agents/solicitors in commission only jobs
- Newspaper sales and delivery by persons under 18
- Employment by churches and certain religious organizations
- Services of work-study students, student nurses and interns, work trainee programs administered by non-profit or public institutions
Please review Section 6 of MGL c. 151A for a complete list of excluded employment.
DFML hours of operation: 9 a.m.-5 p.m., DOR hours of operation: 8:30 a.m.-4:30 p.m.