by John Schachter, EA
Employers with a Massachusetts workforce are required to implement an additional state payroll tax starting October 1, 2019. The tax is to pay for benefits that workers will be able to claim for family and medical leave starting in 2021. Employers must withhold the new tax from all employees. Certain employers must also withhold the tax from independent contractors. Employers must also display a workplace poster and get workers to sign an acknowledgment that they have been notified of the new benefits and the new tax. Some employers must pay at least a portion of the tax on workers’ behalf. If employers have adopted adequate private plans to provide similar benefits, they can be exempted from some of the requirements of the new law.
You can find lots more information, including links to downloadable posters and notice forms at https://www.mass.gov/orgs/
If you process payroll through an outside vendor, they should be able to help you implement the new law. However, the outside vendor won’t know about your independent contractors, who are definitely a factor in how the law will apply to you. And the law applies to those with zero employees and exclusively independent contractors. Questions? Ask John Schachter + Associates how to implement this new law for your business.