Massachusetts: New Guidance for Calculating Wages for Tipped Employees

APPLIES TO

All Employers of MA Tipped Employees

EFFECTIVE

January 1, 2019

QUESTIONS?

Contact HR On-Call

(888) 378-2456

The “Grand Bargain” added a clause to the service rate statute stating that an employer shall calculate the “amount required by clause (2) at the completion of each shift worked by the employee.” The Massachusetts Attorney General’s office recently released additional guidance on what this means.

Specifically, at the end of each shift, employers must compare the employee’s tips plus regular wage to the minimum wage to ensure that the employee has earned at least minimum wage for that shift, and pay the minimum wage rate if there is a shortfall in the next regular paycheck. Employers should note that the calculation is reviewed on a shift, not day, basis, and tips earned on one day cannot offset minimum wage shortfalls on other days. As of January 1, 2019, the minimum wage in Massachusetts is $12.00 per hour with a service rate of $4.35 per hour.  The service rate can be applied to any employee who earns more than $20 in tips per month.

Action Items

  1. Review the guidance here.
  2. Implement payroll review processes and procedures to monitor minimum wage compliance each shift worked, and ensure proper payment of wages consistent with the new guidance.
  3. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser.

© 2019 ManagEase

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