HR Update

HR Update: MASSACHUSETTS: INCREASED MINIMUM WAGE AND PAID FAMILY AND MEDICAL LEAVE

By August 9, 2018 No Comments

Although the Fight for $15 movement has not resulted in raising the federal minimum wage, the movement has had success at the state and local level. Similarly, national efforts to require paid family and medical leave have not succeeded, but states such as California, New Jersey, New York, and Rhode Island have enacted paid family and medical leave laws. Massachusetts is now joining this cohort. Recently, Massachusetts’ Governor, Charlie Baker, signed legislation that will, among other things, increase Massachusetts’ minimum wage to $15.00, eliminate Massachusetts’ blue laws, and establish a new state paid family and medical leave program.

 

Increase of Minimum Wage to $15.00

The increase in Massachusetts’ minimum wage from the current $11.00 per hour to $15.00 per hour will occur over five years with the initial increase taking effect January 1, 2019. The table below reflects the scheduled increases.

Date Standard Minimum Wage Tipped Minimum Wage
Currently $11.00 $3.75
January 1, 2019 $12.00 $4.35
January 1, 2020 $12.75 $4.95
January 1, 2021 $13.50 $5.55
January 1, 2022 $14.25 $6.15
January 1, 2023 $15.00 $6.75

 

Elimination of Sunday and Holiday Pay

Massachusetts blue laws generally require retailers that employ more than seven people to compensate nonexempt employees time and a half on Sundays and certain holidays. This requirement is being phased out over time as reflected in the table below.

Date Rate of Pay
Currently 1.5 times regular pay “time and a half”
January 1, 2019 1.4 times regular pay
January 1, 2020 1.3 times regular pay
January 1, 2021 1.2 times regular pay
January 1, 2022 1.1 times regular pay
January 1, 2023 Regular pay

 

Paid Family and Medical Leave for All Employees

Starting in 2021, the newly introduced Massachusetts Paid Family and Medical Leave program (“Massachusetts Program”) will provide eligible employees the ability to take paid leave for certain health and family related reasons. There are three notable differences between the federal Family and Medical Leave Act (“FMLA”) and the Massachusetts Program:

  1. While the FMLA applies to employers with 50 or more employees, the Massachusetts Program will apply to employers of all sizes.
  2. The Massachusetts Program has no minimum length of service or hours worked requirement.
  3. Unlike FMLA leave, the Massachusetts Program will provide eligible employees paid leave benefits.

Employer Contribution is Based on Size

Employers may take some relief in that they are not required to assume the entire financial burden for the program and paid leave benefits. Starting July 1, 2019, employees and employers with 25 or more employees will contribute to the Family and Employment Security Trust Fund from which paid leave benefits will be paid. The initial contribution rate will be .63 per cent of employees’ wages. Employers with fewer than 25 employees are not required to make contributions. However, employers of all sizes will be required to recognize leave taken under the program as being job-protected. In other words, an employee of any business is entitled to take Massachusetts paid leave without the risk of being terminated, losing health insurance benefits, or suffering retaliation.

 

Length of the Leave and Benefit Amount

Under the Massachusetts Program, employees are entitled to leave for up to 12 weeks a year to care for a family member or bond with a new child, up to 20 weeks a year to deal with a personal medical issue, and up to 26 weeks a year to deal with an emergency related to deployment of a family member for military service. An employee is limited to a combined maximum of 26 weeks of paid family and medical leave in the same year. Weekly benefit amounts will be calculated as a percentage of the employee’s average weekly wage, with a maximum weekly benefit capped at $850 and subject to an annual adjustment.

 

Important Dates

Due to the phased in nature of the law, there are a number of significant dates listed in the table below.

Date Events
January 1, 2019 Post a workplace notice about the program prepared or approved by the newly created Department of Family and Medical Leave (the “Department”).

 

Issue each employee written information provided or approved by the Department which provides information about the benefits and employer and employee contribution obligations.

July 1, 2019 Employer and employee contributions begin.
January 1, 2021 Leave benefits will be paid to eligible employees.

 

The Department is required to promulgate regulations necessary to implement the Paid Family and Medical Leave program no later than July 1, 2019. MBA will provide updated information as it becomes available.

 

Do you have questions about the upcoming changes to Massachusetts’ minimum wage, Sunday and holiday pay, or the upcoming Paid Family and Medical Leave program? Please contact one of our HR Consultants at 888-622-6460.

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