By: Jen McCormick, Esq. Massachusetts Governor Charlie Baker signed landmark legislation on June 28, 2019. The legislation, referred to as the “Grand Bargain” Act will increase the minimum wage and create a generous paid leave program. Massachusetts employers should begin to prepare for the impact of this new paid leave program. The new paid leave program will be available for eligible individuals as of January 1, 2021. All private Massachusetts employers will need to provide eligible individuals with paid family and medical leave, funded via the payroll tax (discussed below). In general, eligible individuals include (a) current (full-time) employees of a Massachusetts employer; (b) self-employed individuals who elected coverage under the law and reported self-employment earnings; and (c) certain former employees. Generally, these individuals will be entitled to 12 weeks of paid family leave to (a) provide care for a family member due to the family member’s serious health condition; (b) bond with their child during the first 12 months after the child’s birth or during the first 12 months after placement of the child for adoption or foster care; or (c) attend to obligations arising because a family member is on active duty or been notified of an impending call to active duty in the United States armed forces. Upon return from paid leave, the individuals must be restored to their equivalent position with the same status, pay, benefits and seniority. Pursuant to the regulations, a new state agency (the Department of Family and Medical Leave) was created to assist in the administration of this new program. This agency is required to issue proposed regulations regarding the implementation and administrative processes for this new paid leave program by March 31, 2019. The new paid leave program will be funded by a mandatory .63% payroll tax contribution (as adjusted by the agency on an annual basis), which is to be collected by the agency. Employers and employees may contribute towards the cost of the tax. Note, however, that certain small employers will be exempt. The paid leave will be subject to a one-week waiting period during which no benefits will be paid, however, employees may (but are not required) to use other paid leave (i.e. sick or vacation time). Eligible individuals may receive up to a weekly benefit cap of $850 (as adjusted by the agency). In certain instances, paid leave taken under this program may also qualify under the Family Medical Leave Act (FMLA) or the Massachusetts Parental Leave Act. The new paid leave program is to run concurrent with those protected leaves. Importantly, pursuant to this program employers must maintain an employee’s existing health insurance for the leave. As the qualifications for this program do not necessarily align with those under FMLA, employers will need to review their existing employee handbooks and health insurance plans to ensure this will not create a gap in coverage. In addition, the regulations note that this program is not intended to interfere with any existing employer programs that may offer greater benefits. For impacted Massachusetts employers, in addition to reviewing current handbooks and materials, this regulation may create the opportunity to expand upon current benefit offerings to ensure compliance with the new law. For example, maybe an employer will want to investigate a self-funded paid leave program. Stay tuned as administrative regulations are expected in early 2019 to assist employers with the implementation of this new paid leave program.