Legislation has been enacted in Massachusetts that will increase the state minimum wage rate and affect tip credit amounts, and create a paid family and medical leave program funded by a payroll tax [H.B. 4640, L. 2018].
Minimum Wage
Effective January 1, 2019, the Massachusetts minimum wage will increase to $12 an hour from $11 an hour. It will increase to $12.75 an hour, effective January 1, 2020; to $13.50 an hour, effective January 1, 2021; to $14.25 an hour; effective January 1, 2022; and to $15 an hour, effective January 1, 2023. Note: Massachusetts uses the state minimum wage rate in the calculation of garnishment limits.
Tip Credit
The minimum cash wage paid to tipped employees will increase gradually to $6.75 an hour, effective January 1, 2023. This will cause changes to the tip credit, on the following schedule: to $7.50 an hour, effective January 1, 2019 (currently $7.25 an hour); to $7.80 an hour, effective January 1, 2020; to $7.95 an hour, effective January 1, 2021; to $8.10 an hour, effective January 1, 2022; and to $8.25, effective January 1, 2023.
Paid Family and Medical Leave Program Funded by Payroll Tax
Effective January 1, 2021, employers must provide “covered individuals” with paid family and medical leave. Eligible employees will be able to take up to 12 weeks of paid family leave for several reasons, including bonding with a new child or to care for a family member with a serious health condition. Eligible employees will be entitled to up to 20 weeks of paid medical leave for their own serious illnesses. Eligible employees will be entitled to up to 26 weeks of paid family leave to care for a family member who is a covered military service member.
Effective July 1, 2019, employers must begin collecting a payroll tax to fund the paid leave program. The payroll tax will include employer and employee contributions.
Interested in more state and local payroll coverage? APA’s PayState Update eNewsletter is perfect for you.
Photo courtesy of mass.gov.
