Massachusetts: Updates to Minimum Wage, Premium Pay, and Paid Family and Medical Leave

APPLIES TO

all Employers with MA Employees

EFFECTIVE

January 1, 2019 and January 1, 2021

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Governor Baker recently signed H.4640 into law. The “grand bargain” increases minimum wage, eliminates premium pay, and implements paid Family and Medical Leave.

Minimum Wage and Premium Pay Updates

By 2023, minimum wage will increase to $15.00 per hour and to $6.75 per hour for tipped employees. Minimum wage will next increase to $12.00 per hour on January 1, 2019. Also by 2023, premium pay will be eliminated. Starting January 1, 2019, employers’ requirement to pay retail employees time-and-a-half for working Sundays and certain holidays will decrease to 1.4 times the regular rate, and subsequently decreasing each year until it is eliminated entirely.

Paid Family and Medical Leave

Beginning January 1, 2021, employers will be required to provide current employees, employees who have been separated for 26 weeks or less, and self-employed independent contractors (where the independent contractors comprise more than 50 percent of the workforce), with 12 weeks of paid family leave and 20 weeks for paid medical leave (with a maximum combined benefit of 26 weeks per year) (1) to provide care for the employee or a family member due to their or their family member’s serious health condition; (2) to bond with a newborn, foster, or adopted child within the first 12 months of birth, placement, or adoption; (3) for needs arising out of the fact that a family member is on active duty or has been notified of an impending call to active duty in the u.s. armed forces; or (4) to care for a family member who is a covered service member.

Employees are required to provide 30 days’ advance notice of the need for leave, or as soon as practicable if the delay in notice is beyond the employee’s control. If the employer does not provide the required new hire notice (discussed below), the employee’s notice requirement is waived.

Once leave commences, payment of benefits is subject to a one-week delay during which time employees may use other paid leave, such as paid sick leave or vacation. However, employers may not require employees to exhaust other forms of paid time off prior to or in connection with taking paid family and medical leave. Leave may be taken intermittently, except for child bonding unless otherwise agreed to by the employer; this restriction does not apply to former employees or self-employed independent contractors. Leave runs concurrently with the federal Family and Medical Leave Act and the Massachusetts Parental Leave Act.

Employees who take leave must be returned to their same or equivalent position upon return, and employers must maintain employee benefits while on leave. Employers must post a required notice in English and any other language primarily spoken by 5 or more employees, and notify employees of their rights within 30 days of hire. Employers are required to obtain a signed acknowledgment of receipt of the notice from all employees, or a signed statement of refusal to sign the acknowledgment. Employers must also provide a required notice to self-employed independent contractors at the time they are contracted, describing how they may obtain paid family and medical leave benefits.

Employers are subject to strict anti-retaliation provisions for employees who use paid family and medical leave or file or participate in a claim based on such leave. Specifically, there is a rebuttable presumption of retaliation if any adverse action is taken against an employee’s terms and conditions of employment during leave or within six months of the employee’s return from leave. To rebut the presumption, an employer must be able to show with “clear and convincing” evidence that it would have taken the same action in the absence of the employee taking leave.

Beginning July 1, 2019, employers with 25 or more employees will begin paying 0.63% of each employee’s wages into a state trust fund for employer contributions.  Employers are required to pay 60% of the contribution for family leave, and employees must contribute 40%; however, employers are not required to pay any portion of the contribution for medical leave and may deduct the full amount from employees’ wages. Employers with less than 25 employees are exempt from paying the employer portion. Contributions are capped at the amount set by the Social Security Administration for contributions to the Old-Age, Survivors and Disability Insurance programs (currently $128,400). Employers have the option to provide equivalent benefits through an approved private plan or self-insurance.

Action Items

  1. Prepare to update payroll processes for increased minimum wage and decreased premium pay, and for paid family and medical leave deductions.
  2. Have employee handbooks updated to reflect paid family and medical leave requirements.
  3. Post required paid family and medical leave notice once available, and update minimum wage posters January 1, 2019.
  4. Implement required new hire notice and acknowledgment, and independent contractor notice.
  5. Review any disciplinary measures, taken during leave or in the six months following paid family and medical leave, with legal counsel to minimize retaliation claims.

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.

© 2018 ManagEase

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