Minimum Wage Hike and Paid Leave Program Coming to Massachusetts

A new law will soon take effect in Massachusetts, where employees will be eligible for paid family and medical leave and will also see an increase in the minimum wage. Governor Charlie Baker signed the bill on June 28, which will require all private employers in the state to offer paid family and medical leave by January 1, 2021, and will begin yearly increases to the state’s minimum wage that will result in a $15 an hour minimum as of January 1, 2023.

Paid Leave

As of January 1, 2021, employees will be eligible to take up to 12 weeks of paid family leave (up to 26 weeks in certain circumstances) and up to 20 weeks of paid medical leave a year. Any employee who meets the financial eligibility requirements for unemployment compensation will qualify for paid family and medical leave benefits. In most cases, leave may be taken intermittently or on a reduced-schedule basis.

Here are other details of the leave law:

  • Employers will be required to post notice of the new program and provide written information about it to new hires within 30 days.
  • Employers must continue employee health insurance benefits and premium contributions during any period of family or medical leave.
  • Employers must restore employees who return from leave to their previous or an equivalent position with the same status, pay, benefits, and seniority unless intervening layoffs or changed operating conditions have taken place.
  • Employers may not retaliate or discriminate against employees for exercising their rights under the new law, may not otherwise interfere with their exercise of those rights, and may not retaliate or discriminate against employees for filing a civil complaint to enforce such rights.

The antiretaliation provisions in the law mean that any negative change in the terms or conditions of employment that occur during a leave, within six months after an employee returns from leave, or within six months after an employee files a civil complaint is presumed to be unlawful retaliation. Employers can rebut the presumption only by clear and convincing evidence of an independent justification for the change.

Employees will have three years to sue an employer for a violation of the new law. Employers found liable may be ordered to reinstate the employee and pay three times the employee’s lost wages and benefits, plus reasonable attorneys’ fees and costs.

The leave program will be administered by a new state agency, the Department of Family and Medical Leave, and will be paid for by mandatory employer contributions to a state trust fund. Employers may require employees to pay a portion of those contributions, and employers with fewer than 25 employees are exempt from paying the employer share of the contributions. The new department must craft proposed regulations by March 31, 2019, and will start collecting the new tax on July 1, 2019.

The new law gives employers the option of providing equivalent benefits to their employees through an approved private plan or self-insurance.

Minimum Wage

The new law will increase the state’s minimum wage from $11 to $15 over the next five years. The minimum will increase to $12 an hour on January 1, 2019, and will then go up by 75 cents an hour every year until it hits $15 an hour on January 1, 2023.

The minimum wage for tipped employees, known as the “service rate,” will increase from $3.75 an hour to $6.75 an hour over the next five years, at a rate of 60 cents an hour every year.

‘Blue law’ Change

In addition to the minimum wage increase and family and medical leave program, the new law includes a change in the state’s “blue law.”

Under the law, mandatory time-and-a-half pay for employees who work in retail establishments on Sundays and certain holidays will gradually be eliminated. Retailers will see the overtime rate drop from 1.5 times the regular rate of pay to 1.4 times the regular rate on January 1, 2019, to 1.3 times on January 1, 2020, and so on, until January 1, 2023, when the mandatory overtime requirement is eliminated altogether.

John S. Gannon is a partner at the firm of Skoler, Abbott & Presser, P.C. John can be reached at 413-737-4753 or jgannon@skoler-abbott.com.

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