Massachusetts Paid Family and Medical Leave: “Topping Off” Benefits is Determined by Employer Policy

Effective November 1, 2023, the Massachusetts Department of Family and Medical Leave (the “Department”) required employers to permit an employee, in the employee’s sole discretion, to supplement or “top off” their Massachusetts Paid Family and Medical Leave (“MA PFML”) benefit with any accrued paid leave (e.g., vacation, sick time, or other available paid time off) (together, “PTO”) so the employee could receive 100% of their regular wages during the MA PFML leave. This required employers whose Private Plans under MA PFML did not permit “topping off” to revise their plans accordingly.  We wrote about it here.

After becoming effective, the Department quietly updated its “topping off” guidance to appear to permit employees to make this election only if the employer’s policies permitted them to do so.  In other words, an employer policy, not an employee’s choice, now dictates whether “topping off” may occur. 

The Department’s “PFML frequently asked questions for employers” (“FAQs”) includes the following: 

• Can an employer policy determine whether and how an employee can use employer-provided sick time, vacation, or other PTO to top off their PFML benefits? An Employer’s policy may determine whether sick time, vacation, or other PTO can be used to top off their PFML benefits, provided such employer policy does not discriminate against employees for exercising their rights under the PFML program (M.G.L. c. 175M).

• What should employers tell employees about their top off options?  Employers should tell their employees that under the PFML law, they have the option to use their available accrued PTO to supplement their PFML benefits while on leave, up to the employee’s IAWW [Individual Average Weekly Wage].  Employers may communicate that PTO use is subject to the employer’s PTO policy, provided that PTO policy does not discriminate against an employee for exercising a right to which such employee is entitled to under the PFML program (M.G.L. c. 175M). 

• If my organization has an unlimited PTO policy, can an employee use it to top off PFML leave benefits? Consult your organization’s PTO policies. Employees may use accrued sick or vacation pay or other paid leave provided under an employer policy to top off PFML benefits up to their IAWW, subject to the accrual and use rules of an employer’s PTO policies and provided further that the employer’s PTO policy does not discriminate against an employee for exercising a right to which such employee is entitled to under the PFML program (M.G.L. c. 175M).

We anticipate that the Department will make additional modifications to its guidance, so that all communications on this issue are clear and consistent. As of the time of this posting, there are several public and employee-facing Department communications that conflict with its own updated guidance on this issue. By way of example only: 

• The same FAQs cited above also include the following: “If my organization has a private plan exemption for family leave and/or medical leave, does my private plan need to allow for top offs? Yes.” 

• Department guidance entitled “Benefit requirements for private paid leave plan exemptions” states that Private Plans “must provide the option for [] employees to top off their benefit amount using employer provided PTO.” 

• The MA PFML application paperwork sent by the Department to employers as of September 2024 states: “After an employee applies and is approved for PFML, they can use PTO (including vacation, sick days, and personal time) to supplement their benefit from [the Department] as long as the combined benefit amount ([MA PFML benefit] and PTO) does not exceed their [average weekly wages]” and links to a page on the Department’s website that discusses “topping off” without any of the detail provided on the FAQs making such entitlement subject to the employer’s policies.  

Modifications to the new guidance may also provide details on drafting and administering a PTO policy that – as stated in the above FAQs – “does not discriminate against an employee for exercising a right to which such employee is entitled under the PFML program.” In other words, an employer may not permit an employee to supplement their pay during a non-PFML leave but prohibit an employee from during so during a PFML leave. As always, and independent of any additional guidance, all PTO policies should be drafted in a way that are facially neutral and applied in a way that does not provide a lesser or greater benefit for employees in one or more protected classes. Employers are also prohibited from discriminating or retaliating against employees for requesting and/or using their MA PFML benefits. 

What does this all mean? Employers are no longer required to permit employees to “top off” an MA PFML benefit with accrued PTO, as long as this election is prohibited under the employer’s pre-existing policy and the denial is not discriminatory. 

What are employer options now? The Department has not offered any guidance on the details of such policies (a stark departure from the November 2023 update which dictated the approach for all employers). As it currently stands, employers will likely adopt a PTO policy that falls into either one of the following two categories regarding “topping off”: (1) policies that do not allow “topping off” during any leave of absence; or (2) policies that offer “topping off” as an option, where the use of “topping off” is in the sole discretion of the employee for any leave of absence. We expect the Department to issue additional guidance on this piece. 

What should employers do? While employers should begin considering what option might best suit their needs, it is possible that the Department issues additional guidance on PTO policies. In the meantime, employers should consider their preferred approach to “topping off” under MA PFML, review their PTO policies and procedures, and determine whether any modifications are required to align such policies and procedures with the employers’ preferred approach to “topping off” the MA PFML benefit. Employers should consider both private plan documents, as well as any employee-facing documents. 

Why would an employer-policy prohibit “topping off”? In practice, most employers with an accrued PTO policy will have good reason to preserve the PFML “top off” option as it serves the interest of both the employee (i.e., it provides for 100% wage replacement for a portion of a MA PFML leave) and the employer (i.e., it allows employees to draw down on the accrued PTO that may otherwise extend a leave of absence and/or require a more significant pay out at termination).  Note, however, that there are administrative burdens associated with this approach that may discourage employers from implementation. For example, where an employer does provide the “top off” option, the employer is responsible for both ensuring that the combined weekly sum of employer-provided paid leave benefits and PFML benefits does not exceed the employee’s average weekly wage and for managing any employer-provided payments that exceed an employee’s average weekly wage. 

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Mintz’s Employment practice is available to assist with MA PFML questions or compliance concerns you may have and will continue to provide additional guidance on MA PFML as issued by the Department.

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