[co-author: Laura Franks, Law Clerk]

On June 28, 2018, Governor Charlie Baker signed “An Act Relative to Minimum Wage, Paid Family Medical Leave, and the Sales Tax Holiday” (HB 4640) into law. Last week, we covered three major changes the Act makes to Massachusetts law that employers should be aware of (available here). In short, the Act incrementally increases minimum wage for regular and tipped employees, gradually eliminates premium Sunday and holiday pay for retail workers, and institutes a paid family and medical leave program.

The Act, touted as a “grand bargain,” was designed, at least in part, as a bipartisan compromise to avoid comparable ballot questions this coming November. As a result, the legislation differs from the proposed ballot initiatives in several ways. Most notably, the ballot initiative did not contain a proposal to either decrease or eliminate premium Sunday and holiday pay for retail workers, as does the new law. There are also notable differences regarding the proposed minimum wage and paid leave proposals on the ballot initiatives, as compared to the new legislation:

Regular Minimum Wage

• Ballot Initiative
  • Incremental increases from $11.00 per hour to $15.00 per hour from 2019 to 2022 ($1.00 per year)
  • Annual increases adjusted for inflation after 2022
• HB 4640
  • Incremental increase from $11.00 to $15.00 per hour from 2019 to 2023 (between $0.25 per year and $1.00 per year)
  • No adjustments for inflation

Tipped Minimum Wage

• Ballot Initiative
  • Incremental increases from $3.75 per hour to $9.00 per hour from 2019 to 2022 ($1.30 per year)
  • Annual increases adjusted for inflation after 2022
• HB 4640
  • Incremental increases from $3.75 per hour to $6.75 per hour from 2019 to 2023 ($0.60 per year)
  • No adjustments for inflation

Paid Family and Medical Leave

• Ballot Initiative
  • Effective January 1, 2019
  • 16 weeks of paid family leave
  • 26 weeks of paid medical leave
  • 26 week maximum of combined paid family and medical leave per benefit year
  • Weekly wages of 90% of the employee’s regular wage, up to a maximum of $1,000.00 per week
• HB 4640
  • Effective January 1, 2021
  • 12 weeks of paid family leave
  • 20 weeks of paid medical leave
  • 26 week maximum of paid family and medical leave per benefit year
  • Weekly wages calculated based off a percentage of the state average weekly wage, up to a maximum of $850.00 per week

As January 1, 2019 approaches, the first effective date for the new legislation, we encourage employers to consult with counsel to prepare and ensure compliance. Proskauer will continue to provide updates and guidance as the staggered effective dates for the legislation’s various provisions approach.

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