Massachusetts Increases the Minimum Wage to $15/hour, Eliminates Premium Pay Requirement for Sundays and Holidays

On June 28, 2018, Governor Baker signed into law “An Act Relative to Minimum Wage, Paid Family Medical Leave, and the Sales Tax Holiday” (the “Act”). The Act makes significant changes to Massachusetts law, including raising the Massachusetts minimum wage from $11/hour to $15/hour, eliminating Sunday and holiday premium pay requirements, and creating a mandatory state paid family and medical leave program.  The changes to minimum wage and premium pay requirements are discussed in more detail below.

Increase in the Massachusetts Minimum Wage from $11/hour to $15/hour

Under the Act, the Massachusetts minimum wage will increase incrementally from the current rate of $11/hour to $15/hour by 2023.  On January 1, 2019, the first increase will take effect, raising the minimum wage to $12/hour.  It will then increase thereafter each year by $0.75 every year until 2023, as follows:

Effective Date

Mandatory Hourly Rate

Current

$11.00/hour

January 1, 2019

$12.00/hour

January 1, 2020

$12.75/hour

January 1, 2021

$13.50/hour

January 1, 2022

$14.25/hour

January 1, 2023

$15.00/hour

The Act also incrementally raises the minimum wage for tipped workers in Massachusetts from the current rate of $3.75/hour to $6.75/hour by 2023, with an increase of $0.60 each year, as follows:

Effective Date

Mandatory Hourly Rate

Current

$3.75/hour

January 1, 2019

$4.35/hour

January 1, 2020

$4.95/hour

January 1, 2021

$5.55/hour

January 1, 2022

$6.15/hour

January 1, 2023

$6.75/hour

Phasing Out Sunday and Holiday Premium Pay

In a win for employers, the Act gradually phases out the current Sunday and holiday premium pay requirement for retailers.  Massachusetts’ “Blue Laws” require some businesses to pay employees extra (time-and-a-half) on Sundays and certain legal holidays. The Act eliminates this requirement over a five-year period, until completely eliminated in 2023, as follows:

Effective Date

Multiplier

Current

1.5

January 1, 2019

1.4

January 1, 2020

1.3

January 1, 2021

1.2

January 1, 2022

1.1

January 1, 2023

1.0

Recommendations

Prior to January 1, 2019, employers who compensate their employees at the current Massachusetts minimum wage rate of $11/hour, or $3.75/hour for tipped employees, should review their compensation practices and policies and prepare to incrementally increase the minimum wage paid to their employees in accordance with the Act.  Employers who are currently required to pay Sunday and holiday premiums to their employees should also review their compensation practices and policies before January 1, 2019, to ensure that they will reap the benefits of the gradual elimination of the Sunday and holiday premium pay requirement.

 

This Employment Law Alert is intended to keep readers current on matters affecting employment law and is not intended to be legal advice.  If you have any questions, please contact Walter Foster at 617.342.6853 or wfoster@eckertseamans.com.

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Walter M. Foster

Member - Boston