Why is September 30 a critical date for Self-Insured Massachusetts Companies?
If you are a self-insured employer seeking an exemption from making Paid Family and Medical Leave (PFML)contributions, then you are required to provide a Surety Bond to guarantee benefits are provided to your employees. September 30, is a significant date for PFML bonds, as it signifies the end of the bond period for 2019.
Why do some organizations in MA need a PFML bond?
Instead of paying into the MA PFML fund, private organizations that are self-insured have the option to bond their PFML program. The paid leave is administered by the Family and Employment Security Trust Fund and requires both the employer and employee to contribute to the fund.
The current term of the PFML program expires on September 30. The new term begins October 1, 2020, and coinciding with this, any existing bonds will expire on September 30, 2020, and a new bond must be in place by October 1st.
As an example, we wrote the PFML bond for Smith College in 2019, and being a well-run organization, they were ahead of the deadline and we are renewing their bond this month (August) in order to assure that they would be covered come the end of the bond period.
In the existing bond form that you received from MA, there is a definite expiration date of September 30, 2020. The new bond form is now available to be issued effective October 1st with the term running out to December 31, 2021.
If your new bond is not set in place by October 1st, the Department of Family and Medical Leave (DFML) may seek to collect retroactive contributions using the surety bond you originally submitted. They may also pursue other collection actions permitted by law.
If you have a PFML bond from 2019, it is necessary that you renew it, and the sooner the better. Consider Metayer Bonding Associates to review your bond needs and help assure that your business is protected.