We think so.
Back in June 2018, the Massachusetts Legislature passed a bill dubbed the “Grand Bargain.” (This law is not a “bargain” for employers, never mind a grand one.) The law includes Paid Family and Medical Leave (PFML). On our Law @ Work blog we wrote about PFML, and you can read our summary here. In addition to providing employees with 26 weeks of paid, job-protected leave per benefit year for a number of reasons, PFML also requires employers to meet certain notification requirements and provides an opportunity for an employer to opt out of the law by instituting a private plan that meets specific requirements.
PFML, which employees can begin to take on January 1, 2021, is funded through mandatory payroll contributions that begin on October 1, 2019. Currently, the contribution is set at 0.75% of an employee’s eligible wages, but that will be adjusted on an annual basis, and employers should expect that percentage to increase. Because PFML covers two types of leave—medical leave and family leave—the state Department of Family and Medical Leave (DFML) has attributed a portion of the contribution (82.5%) to medical leave and the remainder (17.5%) to family leave. As if that wasn’t confusing enough, employers “may deduct up to” 100% of the family leave contribution and 40% of the medical leave contribution from an employee’s wages. Employers with 25 or more employees are required to pay the rest. Notably, employers are not required to make any deductions from an employees pay, and, have the discretion to pay some, or even all, of the employee’s portion.
So, with this level of discretion, are employers required to bargain with the union regarding the contribution? When it comes to wages, working hours, and/or terms and conditions of employment, a unionized employer is legally prevented from making a unilateral change without advance notice to the union and the opportunity to bargain.
Because it is within an employer’s power to determine the amount, up to the percentages set by law, it wants its employees to contribute toward PFML, the National Labor Relations Board is likely to take the position that employers must bargain with the union over the deduction. While it is our opinion that employers may only have to bargain over the impact of the deduction on an employee’s wages and other terms and conditions of employment, we cannot guarantee that the National Labor Relations Board won’t find that decisional bargaining is required. Those who have unionized workforces and do not bargain over the contribution amount could be subject to an unfair labor practice charge (ULP).
There are a couple of ways for employers to avoid facing a ULP: Once an employer gives the union notice of its plans regarding the amount of employee deductions, it can either ask the union if it wants to talk about them or wait for the union to demand bargaining. Either way, employers should be sure to notify the union of their intentions regarding the deductions before the deductions begin on October 1, 2019.
(This blog post was updated on June 19, 2019 to reflect recent changes in the law. On June 13, 2019, Governor Charlie Baker signed legislation that delayed by three months the Department of Family and Medical Leave’s collection of contributions from employers, from July 1, 2019 to October 1, 2019. You can learn about the delay and other recent developments here.)