Massachusetts Is the Latest State to Raise Minimum Wage to $15, Enacts Paid Family Leave

Wednesday August 8th, 2018

Over the next five years, Massachusetts will incrementally increase its minimum hourly wage from $11 to $15. Legislation signed by Governor Charlie Baker (R) will increase the minimum wage by 75 cents on Jan. 1 of each year from 2019 to 2023. Beginning in 2019, the minimum wage will increase to $12 per hour, then to $12.75 in 2020, $13.50 in 2021, $14.25 in 2022, and $15 in 2023.

An increase to the minimum tipped wage will follow the same schedule, with 60-cent annual increments, resulting in a tipped wage minimum of $6.75 per hour on Jan. 1, 2023.

Massachusetts joins California, New York, and the District of Columbia in enacting the eventual $15 minimum. Economists estimate that roughly one-third of those employed in the Commonwealth—about one million workers—will see pay increases, including employees currently earning more than the minimum.

In addition to wage increases, workers can expect more generous paid family leave. Under a new program, workers would contribute to a program for paid family and medical leave and be eligible for up to 12 weeks of paid family leave or up to 20 weeks of paid medical leave to care for a personal or family injury or illness.

Though workers would be eligible for a maximum combined 26 weeks of paid leave in a single year, the program requires employers to guarantee that employees can return to their previous role or its equivalent with the same pay and benefits. Under family leave provisions, employees will be eligible to bond with a new child within the first year or to assist a family member with a serious health condition or who is called for active duty service in the military.

The paid leave program would be funded through a payroll tax of 0.63 percent, which is to be split evenly between employers and employees. Benefits will begin in 2021, but employees can expect to see the deduction—a percentage of salary capped at $850 per week—beginning in mid-2019. The Department of Family and Medical Leave, which will oversee the fund, is working on proposed regulations to establish contribution collection and filing procedures. Employers can expect the proposed regulations by March 31, 2019.

Self-employed individuals also are eligible to participate in the program.

Sales Tax Holiday, Sunday and Holiday Overtime

In order to get business leaders to support the legislation, the state law includes a gradual elimination of Sunday and holiday time-and-a-half pay for certain retail establishments and creates an annual sales tax holiday. The deal provides protections for employees, prohibiting punishment for refusal to work Sundays or holidays.

The sales tax holiday, which will be scheduled annually for two days in the month of August, will apply to most consumer goods.