Massachusetts has announced changes to the way Paid Family and Medical Leave (PFML) contributions may be allocated between employers and covered individuals beginning January 1, 2027, as new Massachusetts legislation (Chapter 101 of the Acts of 2026) shifts employer contributions from medical leave to family leave. While the total PFML contribution rate for 2027 has not yet been set, the state has established a new contribution structure that will affect how employers with 25 or more covered individuals share PFML costs with employees. Contribution rates for 2027 will be announced by October 1, 2026.
Contribution Rules Remain Unchanged for Smaller Employers
Employers with fewer than 25 covered individuals will continue to be responsible only for remitting PFML contributions withheld from covered individuals’ wages.
These employers:
- Are not required to make an employer contribution toward PFML; and
- May voluntarily choose to cover some or all of the employee portion of required contributions.
New Cost-Sharing Rules for Employers with 25 or More Covered Individuals
Beginning January 1, 2027, employers with 25 or more covered individuals will be subject to a revised contribution allocation structure for family leave contributions.
Family Leave Contributions
Under the new structure:
- Employers may withhold up to 40% of the family leave contribution from employees’ wages; and
- Employers must contribute the remaining 60%.
This represents a shift in how family leave costs are shared between employers and employees.
Medical Leave Contributions
For medical leave contributions:
- Employers may continue to withhold up to 100% of the medical leave contribution from covered individuals’ wages.
Total 2027 Contribution Rate Still Pending
The actual PFML contribution rate will be determined and published by the Department of Family and Medical Leave on or before October 1, 2026.
Employers Impacted
The changes primarily affect:
- Massachusetts employers with 25 or more covered individuals;
- Payroll and benefits administrators responsible for PFML deductions; and
- Employers evaluating PFML budgeting and workforce costs for 2027.
Employer Takeaway
Although the 2027 PFML contribution rate has not yet been announced, Massachusetts employers should begin preparing for the revised cost-sharing structure. Employers with 25 or more covered individuals should review payroll systems, budgeting assumptions, and employee communication materials to ensure they reflect the new family leave contribution allocation that takes effect January 1, 2027. Employers should also monitor for the state’s announcement of the final 2027 PFML contribution rate later this year.