Massachusetts quietly rewrote who pays for paid family and medical leave, and almost every summary of it circulating right now gets some part of it wrong. We went and read the statute and the amending act.
Here is what actually happened.
The change is two sentences long
Chapter 101 of the Acts of 2026, approved June 12, 2026, contains two sections that do nothing but swap a pair of numbers in G.L. c. 175M, § 6.
Section 25 strikes the figure “40” everywhere it appears in the relevant lines and replaces it with “100.” Section 26 strikes “100” and replaces it with “40.” That is the entire amendment.
To see why it matters, you have to know what those two numbers were doing.
What the law says now
Section 6 caps how much of each contribution an employer may pass to the employee, and it treats the two kinds of leave differently:
- Medical leave: an employer “shall not deduct more than 40 per cent” from the employee’s wages. The employer therefore funds at least 60 percent.
- Family leave: an employer “may deduct not more than 100 per cent” from the employee’s wages. The employer can fund none of it.
Separately, subsection (d) exempts employers with fewer than 25 employees in Massachusetts from paying the employer portion at all. Those smaller employers still remit the money; they just withhold the employee share and send it along.
What the swap does
Reverse the two figures and the obligation flips:
- Medical leave: employers may deduct up to 100 percent from employees.
- Family leave: employers may deduct no more than 40 percent, meaning the employer funds at least 60 percent.
So the mandatory employer contribution does not disappear. It moves, from the medical leave side of the ledger to the family leave side. Employers with 25 or more Massachusetts employees are the ones affected, because they are the only ones who owe an employer portion in the first place.
This is where most of the secondhand summaries go astray. Some describe the employer contribution as being eliminated, which it is not. Others describe the current 40 percent family leave cap as though it already applies, which it does not yet.
The part nobody is reporting
Section 43 of the same act is the provision that actually tells you what this means, and it has gone almost entirely uncovered.
It directs the Executive Office of Labor and Workforce Development, working with the Department of Family and Medical Leave, to issue public guidance on the changes in sections 25 and 26 and their impact on employers and employees in calendar year 2027. And it specifies what the department is supposed to accomplish with its rate-setting authority: administrative adjustments that ensure “the overall balance of employee and employer contribution levels remain unchanged while limiting the tax burdens on employees.”
Read that carefully. The Legislature is not trying to shift net cost from employees to employers or the reverse. It is directing the department to offset the swap through the annual rates so the aggregate split stays where it is, while improving the tax treatment for workers.
That reframes the whole change. It is a tax-efficiency maneuver dressed as a contribution reshuffle, not a cost shift. Section 43 also requires the department to report to the House and Senate Ways and Means Committees and the Joint Committee on Labor and Workforce Development within 30 days of making those adjustments.
What employers should do, and when
The date to watch is October 1, 2026. Under G.L. c. 175M, § 7(e), the department must set the following year’s contribution rates on or before October 1, effective the following January 1. The 2027 rates had not been published as of late August.
Those rates, plus the department’s section 43 guidance, are what will tell payroll what to actually withhold in January. Until both are out, an employer cannot responsibly reprogram anything.
Three practical steps in the meantime:
Count your Massachusetts employees. The 25-employee threshold is what determines whether you owe an employer portion at all, and covered contract workers count toward it.
Flag it with your payroll provider now rather than in December, because the withholding split between the two leave types is changing in opposite directions at once.
Wait for the actual rates before telling employees what changes. Because the department is directed to keep the overall balance level, the net effect on a given paycheck may be small even though the underlying allocation moved substantially.
Our full explainer on the program is here: Massachusetts Paid Family and Medical Leave, benefits and rates.
Common questions
Are employers no longer paying the medical leave contribution?
After the amendment, employers may deduct up to 100 percent of the medical leave contribution from employees. The employer’s mandatory share moves to family leave, where the employee deduction is capped at 40 percent. The employer contribution is relocated, not eliminated.
Does this apply to small employers?
Employers with fewer than 25 Massachusetts employees are exempt from the employer portion under G.L. c. 175M, § 6(d), and remain so. The change matters for employers at or above 25.
When does it take effect for payroll?
The act directs guidance addressing calendar year 2027. Contribution rates for 2027 must be set by October 1, 2026 under § 7(e) and take effect January 1.
Will my paycheck deduction go up?
Not necessarily. The Legislature directed the department to make administrative adjustments so the overall balance of employee and employer contributions stays unchanged, while limiting the tax burden on employees.
Where is this written?
Sections 25, 26, and 43 of Chapter 101 of the Acts of 2026, amending G.L. c. 175M, § 6.
General information, not legal or tax advice. Employers should confirm withholding against the department’s published 2027 rates and guidance before making payroll changes.