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New Minimum Wage Rate for Massachusetts Employees Effective January 1, 2020
By: Amanda Thibodeau
With the new year comes a new minimum wage rate for Massachusetts non-exempt employees. As of January 1, 2020 the minimum wage rate is now $12.75 per hour, and $4.95 per hour for tipped employees. Employers with Massachusetts-based non-exempt employees should update their payroll provider to reflect the increase – and be sure to use the new rate when calculating any earned overtime.
The change comes from a 2018 bill signed by Governor Baker that gradually increases the minimum wage rate until it reaches $15.00 per hour in 2023 ($6.75 per hour for tipped employees).
For more information, please contact Matthew Mitchell or Amanda Thibodeau.
2016 New Year’s News for Employers
As we approach the New Year there are a few important changes to keep in mind, as well as recommendations to get your employment law practices in order.
What are these changes?
- Minimum Wage Goes Up
- Earned Sick Leave Safe Harbor Ends
- Sexual Harassment Law Compliance
- Data Protection Compliance
For all the details read our Employment Law Alert.
If you have questions about any of the above suggestions, please contact Sandy Kahn or any member of MBBP’s Employment Law Group.
Massachusetts’ Minimum Wage Set to Increase
The minimum wage in Massachusetts is set to increase on January 1, 2015 for the first time since 2008. On June 26, 2014, Governor Deval Patrick signed a bill into law which will raise the hourly minimum wage for non-tipped employees from $8.00 an hour as follows:
- Beginning January 1, 2015, to $9.00.
- Beginning January 1, 2016, to $10.00.
- Beginning January 1, 2017, to $11.00.
The hourly minimum cash wage for tipped workers will increase from $2.63 to $3.00 an hour on January 1, 2015, and again to $3.75 an hour on January 1, 2017. As a result of these increases, Massachusetts’ minimum wage will be amongst the highest in the country.
Compliance with Massachusetts’ minimum wage laws is important since the failure to do so will result in a violation of the Massachusetts “Payment of Wages” statute, M.G.L. c.149, §148 (the “Wage Act”). Violations of the Wage Act carry a high price and are subject to mandatory treble (triple) damages and attorney’s fees, even if an employer has acted in good faith. Wage Act violations can also result in criminal penalties and civil liability for the employer as well for as the president, treasurer, and individual “officers and agents” of the employer.
For more information on the Massachusetts minimum wage increase or wage and hour compliance generally, contact a member of the Employment Law Group.
Are Your Commissioned Sales Employees Entitled to Minimum Wage and Overtime?
Many employers use commission payments to increase the productivity of their sales force. Commissioned sales people can earn significant compensation. But, are commissioned sales people also entitled to minimum wage and overtime?
The federal Fair Labor Standards Act(FLSA) establishes a minimum wage and requires that employers pay overtime, or 1.5 times the employee’s regular rate of pay, to employees who work more than 40 hours in a workweek. The FLSA’s minimum wage and overtime requirements apply to all employees, including commissioned employees, unless the employee comes within one of the statutory exemptions to the FLSA.
Many commissioned sales employees come within one of two statutory exemptions to the FLSA, the “outside sales exemption” or the “inside/retail sales exemption.” An employee is exempt under the outside sales exemption if the employee’s primary duty is making sales or obtaining orders or contracts for services or the use of facilities from paying clients or customers, and the employee is customarily and regularly engaged away from the employer’s place of business. Qualified outside sales people are exempt from both minimum wage and overtime requirements.
Commissioned sales people employed by a retail or service establishment are exempt from overtime (but not minimum wage) under the inside/retail sales exemption if (1) the employee’s regular rate of pay (including commissions) exceeds one and one-half times minimum wage and (2) more than half the employee’s total earnings are in the form of commissions.
If a commissioned sales employee does not come within one of these two narrowly defined exemptions (sales people will usuallynotqualify for other FLSA exemptions) the sales employee is not exempt and is entitled to overtime on top of commissions.
For help determining whether your sales force is exempt, or for more information on this topic, please contact a member of our Employment Law Group.
Minimum Wage Increases in 13 States
By: Robert Shea
Employers in 13 states begin 2014 with higher minimum wage requirements. Now, 21 states have minimum wage rates exceeding the federal minimum wage rate of $7.25 per hour. Here in New England, as of January 1, 2014, Connecticut’s minimum wage rate is $8.70 (and will go to $9.00 on January 1, 2015), Rhode Island’s rate is $8.00, and Vermont’s rate is $8.73. Minimum wage rates in Maine, Massachusetts and New Hampshire remain at $7.50, $8.00, and $7.25, respectively. Also, note New York’s minimum wage rate will go from $8.00 to $8.75 on December 31, 2014 and to $9.00 on December 31, 2015.
Minimum wage increases are also being discussed in several other states, including Massachusetts. Proposed legislation in Massachusetts would increase the minimum wage rate from $8.00 to $11.00 over three years. The minimum wage is also a hot topic on Capitol Hill where Democrats are seeking a significant increase in the federal minimum wage rate, which has been at its current rate of $7.25 per hour since 2009.
For more information on this topic, please contact MBBP’s Employment Law Group.
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