Contributions

(1) Generally. (a) Contributions are the payments made to the Family and Employment Security Trust Fund established in M.G.L. c. 175M, § 7 by an employer, a covered business entity, an employee, a covered contract worker, or a self-employed individual electing coverage. (b) Beginning on October 1, 2019, the initial contribution rate shall be 0.75% of all wages or other qualifying earnings or payments, as limited by 258 CMR 2.05(1)(c) and (d). Annually, not later than October 1 si, the Director shall set the contribution rate for the upcoming calendar year, as required by M.G.L. c. 175M, § 7(e). (c) Contributions shall not be required for covered individuals' wages or other qualifying earnings or payments above the contribution and base limit established annually by the federal Social Security Administration for purposes of the Federal Old-age, Survivors, and Disability Insurance program limits pursuant to 42 U.S.C. 430. (d) An employer or covered business entity with an average total workforce in Massachusetts of fewer than 25 persons, including employees and covered contract workers, as determined by the method specified in 458 CMR 2.05(2), shall not be required to pay the employer portion of premiums for family and medical leave, as defined in 4 5 8 CMR 2. 0 5 ( 5). (2) Average Total Workforce Count. An employer or covered business entity shall annually determine its workforce count based on the previous calendar year by counting the number of employees, including full time, part-time, and seasonal employees on the payroll during each pay period and dividing by the number of pay periods. If an employer or covered business entity contracted with individuals for services during any pay period and is required to report the payment to such individuals on IRS Form 1099-MISC, those covered contract workers must be included in the count for the pay period. An employer or a covered business entity with an average total workforce that consists of more than 50% self-employed individuals for whom the employer is required to report payment for services on Internal Revenue Service form 1099-MISC shall count those self-employed individuals as covered contract workers for the purposes of determining the size of the employer's or covered business entity's average total workforce pursuant to 458 CMR 2.05(2). (3) Required Remittance of Contributions. An employer or covered business entity shall be required to remit contributions for all employees and covered contract workers. Notwithstanding the foregoing, the Department may refund contributions paid by or on behalf of an employee, covered contract worker, or self-employed individual who has elected coverage, where the contribution remitted was greater than required under M.G.L. c. 175M, or 458 CMR 2.00, or both. (4) Allocation of Contribution Rate between Family Leave and Medical Leave. The total contribution rate shall be allocated between the family leave contribution rate and the medical leave contribution rate. The rate allocation will be based on the Department's estimate of the anticipated costs of benefits and administration of the program. When the Department deems it necessary to do so, but no more than once a year, it may adjust the allocation of rates. (5) Allocation of Contributions between Employers and Employees and Covered Contract Workers. In accordance with applicable laws and regulations, including the required notice under M.G.L. c. 175M, § 4(a), an employer or a covered business entity may deduct up to certain defined percentages of the required medical leave and family leave contributions directly from wages or other qualifying payments made to an employee or covered contract worker. The employer's or covered business entity's portion of the contribution is that part of the full contribution amount not deducted from wages paid or other qualifying payments made to the employee or covered contract worker. The employer or covered business entity in all instances shall be responsible for paying and remitting the remainder of any required contribution not lawfully deducted from the employee or covered contract worker. (a) Medical Leave Contribution. An employer or covered business entity may deduct from an employee's wages or from qualifying payments made to a covered contract worker up to 40% of the medical leave contribution required for that employee or covered contract worker. (b) Family Leave Contribution. An employer or covered business entity may deduct from an employee's wages or from qualifying payments made to covered contract worker up to 100% of the family leave contribution required for that employee or covered contract worker. (c) An employer or covered business entity shall not deduct a greater percentage of the medical leave and family leave contributions than the maximum authorized by M.G.L. c. 175M, § 6(e)(1) and (2). An employer or covered business entity that opts to deduct a lower percentage of medical or family leave contributions than the maximum allowable deductions specified in 458 CMR 2.05(5)(a) and (b) shall still be required to remit the full amount of contribution amount owed pursuant to 458 CMR 2.05(6). (d) An employer or covered business entity may choose to deduct differing percentages from the wages or qualifying payments of different groups of covered individuals, but it shall not deduct more than the maximum percentages authorized by M.G.L. c. 175M, § 6(e)(1) and (2) from any employee or covered contract worker. (6) Remitting Contributions. Based on the quarterly Employment and Wage Detail Report filed by an employer, covered business entity, or self-employed individual electing coverage, the Department will calculate the total quarterly contribution amount owed. Contributions owed must be remitted to the Department through the Massachusetts Department of Revenue's MassTaxConnect system on or before the quarterly filing deadlines established by the Massachusetts Department of Revenue. 2.05: continued 458 CMR: DEPARTMENT OFFAMILY AND MEDICAL LEAVE (2) Average Total Workforce Count. An employer or covered business entity shall annually determine its workforce count based on the previous calendar year by counting the number of employees, including full time, part-time, and seasonal employees on the payroll during each pay period and dividing by the number of pay periods. If an employer or covered business entity contracted with individuals for services during any pay period and is required to report the payment to such individuals on IRS Form 1099-MISC, those covered contract workers must be included in the count for the pay period. An employer or a covered business entity with an average total workforce that consists of more than 50% self-employed individuals for whom the employer is required to report payment for services on Internal Revenue Service form 1099-MISC shall count those self-employed individuals as covered contract workers for the purposes of determining the size of the employer's or covered business entity's average total workforce pursuant to 458 CMR 2.05(2). (3) Required Remittance of Contributions. An employer or covered business entity shall be required to remit contributions for all employees and covered contract workers. Notwithstanding the foregoing, the Department may refund contributions paid by or on behalf of an employee, covered contract worker, or self-employed individual who has elected coverage, where the contribution remitted was greater than required under M.G.L. c. 175M, or 458 CMR 2.00, or both. (4) Allocation of Contribution Rate between Family Leave and Medical Leave. The total contribution rate shall be allocated between the family leave contribution rate and the medical leave contribution rate. The rate allocation will be based on the Department's estimate of the anticipated costs of benefits and administration of the program. When the Department deems it necessary to do so, but no more than once a year, it may adjust the allocation of rates. (5) Allocation of Contributions between Employers and Employees and Covered Contract Workers. In accordance with applicable laws and regulations, including the required notice under M.G.L. c. 175M, § 4(a), an employer or a covered business entity may deduct up to certain defined percentages of the required medical leave and family leave contributions directly from wages or other qualifying payments made to an employee or covered contract worker. The employer's or covered business entity's portion of the contribution is that part of the full contribution amount not deducted from wages paid or other qualifying payments made to the employee or covered contract worker. The employer or covered business entity in all instances shall be responsible for paying and remitting the remainder of any required contribution not lawfully deducted from the employee or covered contract worker. (a) Medical Leave Contribution. An employer or covered business entity may deduct from an employee's wages or from qualifying payments made to a covered contract worker up to 40% of the medical leave contribution required for that employee or covered contract worker. (b) Family Leave Contribution. An employer or covered business entity may deduct from an employee's wages or from qualifying payments made to covered contract worker up to 100% of the family leave contribution required for that employee or covered contract worker. (c) An employer or covered business entity shall not deduct a greater percentage of the medical leave and family leave contributions than the maximum authorized by M.G.L. c. 175M, § 6(e)(l) and (2). An employer or covered business entity that opts to deduct a lower percentage of medical or family leave contributions than the maximum allowable deductions specified in 458 CMR 2.05(5)(a) and (b) shall still be required to remit the full amount of contribution amount owed pursuant to 458 CMR 2.05(6). (d) An employer or covered business entity may choose to deduct differing percentages from the wages or qualifying payments of different groups of covered individuals, but it shall not deduct more than the maximum percentages authorized by M.G.L. c. 175M, § 6(e)(l) and (2) from any employee or covered contract worker. (6) Remitting Contributions. Based on the quarterly Employment and Wage Detail Report filed by an employer, covered business entity, or self-employed individual electing coverage, the Department will calculate the total quarterly contribution amount owed. Contributions owed must be remitted to the Department through the Massachusetts Department of Revenue's MassTaxConnect system on or before the quarterly filing deadlines established by the Massachusetts Department of Revenue. (7) Penalty. An employer or covered business entity who fails or refuses to make contributions as required in 458 CMR 2.05(6) shall be assessed an amount equal to its total annual payroll for employees and covered contract workers for each year or fraction thereof that it failed to comply multiplied by the then-current annual contribution rate required under M.G.L. c. 175M, § 6(a), in addition to the total amounts of benefits paid to covered individuals for whom it failed to make contributions. The Department may waive or modify any penalty or assessment imposed or due hereunder upon a showing of good cause. An employer or covered business entity that failed to properly assess the allowable deduction from an employee or covered contract worker or is assessed a charge against payroll for failure to remit required contributions or that is required to repay the Trust Fund the cost of benefits paid to covered individuals for whom it failed to make contributions shall not recoup any assessment or cost of repayment through charges against employees or covered individual.