Q. Are there any new laws in Massachusetts that my company should be aware of?
A. Massachusetts Governor Charlie Baker recently signed a bill that will serve as a turning point for working families. Referred to as the “Grand Bargain,” the bill represents a compromise among legislators, labor, community and business groups. The four main components of the bill will significantly impact all Massachusetts employers with at least one employee over the next five years.
Minimum Wage Increases
Currently, the Massachusetts minimum wage is $11 per hour. Under the new law, the minimum wage will increase incrementally to $15 per hour in 2023, tying New York, California and Washington, D.C. as having the highest statewide minimum wage in the country. Beginning January 1, 2019, the Massachusetts minimum wage will increase to $12 per hour, and will increase each year thereafter in $0.75 increments until 2023: $12.75 in 2020, $13.50 in 2021, $14.25 in 2022, and $15 in 2023. The Massachusetts current tipped minimum wage of $3.75 per hour will increase in $0.60 increments each year until it reaches $6.75 in 2023.
Premium Pay for Sunday Work and Work on Legal Holidays
Currently under Massachusetts law, employers must pay premium pay of 1.5 times the hourly rate for work performed on Sundays and Massachusetts’ legally-recognized holidays. Under the new law, premium pay will be gradually phased out by 2023. Beginning January 1, 2019, workers will be paid 1.4 times their hourly rate as premium pay. The percentage will decrease annually by 10% until 2023, when workers will receive their regular hourly rate regardless of the day worked. Employers cannot require employees to work on Sundays or legally recognized holidays, nor can employees be punished for refusing to work on such days. Note: This decrease is for premium pay only, and is not to be confused with and does not relieve an employer of its obligation to pay one and one-half times an employee’s regular hourly rate for all hours worked in excess of 40 hours in a given work week.
Paid Family and Personal Medical Leave
Massachusetts will join New York, California, New Jersey, Rhode Island, Washington and Washington, D.C. in offering a paid family and medical leave program. Beginning in 2021, eligible employees will be permitted to take up to 12 weeks of job-protected paid leave to care for a sick family member or a newborn, up to 20 weeks of job-protected paid medical leave to attend to their own serious medical needs, and up to 26 weeks of job-protected paid family leave to care for a covered service member. However, an employee may only take a maximum of 26 weeks, in the aggregate, in a benefit year. Upon returning to work, employees must be restored to the same or equivalent positions held prior to taking leave. Employers will be required to post a notice regarding Paid Family and Personal Medical Leave, and newly hired employees must be provided with a notice of benefits within 30 days of their hire date. Note: Paid Family and Personal Medical Leave will run concurrently with leave taken under the Massachusetts Parental Leave Act and the federal Family and Medical Leave Act.
Additional Payroll Tax
The Massachusetts Paid Family and Personal Medical Leave Act will be financed through an additional 0.63% payroll tax, commencing July 1, 2019. Employers are required to deduct this additional tax from an employees’ wages and employers with more than 25 employees are responsible for contributing 60% of the contributions for personal medical leave. Note: Employers may elect to opt out of paying the employer portion of this payroll tax if they provide benefits that equal or exceed those provided by the Massachusetts Paid Family and Personal Medical Leave Program.