On January 1, some important changes to Massachusetts employment law took effect. Below are the highlights:
Paid Family and Medical Leave
In 2018, Gov. Charlie Baker signed the so-called “Grand Bargain” legislation. Among other things, the Grand Bargain established a Department of Family and Medical Leave within the Executive Office of Labor and Workforce Development. The Department is responsible for administering Massachusetts’ paid family and medical leave program. The law requires employers to either submit and obtain approval of a private plan, or begin making payroll deductions and paying contributions to the state fund each calendar quarter.
The first quarter for which contributions are due covers the period October through December 2019. The tax filing for this period is due on January 31, 2020.
Minimum wage goes up, premium pay goes down
Another component of the Grand Bargain legislation raises the state minimum wage to $15 per hour by 2023. For 2020, the minimum wage is $12.75 per hour. For tipped employees, the 2020 minimum wage is $4.95 per hour and will increase to $6.75 per hour by 2023. In an attempt to offset the effect on employers of these minimum wage increases, the Grand Bargain phases out premium pay for certain legal holidays and Sundays. The premium rate for retail workers employed on Sundays, Memorial Day, the Fourth of July, and Labor Day is now 1.3 times the regular rate instead of the former 1.4 times the regular rate. Premium pay of 1.5 times the regular rate is still required for retail work performed on New Year’s Day, Veterans Day, and Columbus Day.
Changes to the minimum salary for certain exempt employees under federal law
This is not Massachusetts-specific, but we’re including it as a reminder. In September, the U.S. Department of Labor issued a Final Rule increasing the minimum salaries required for certain “white-collar” employees to be exempt under the Fair Labor Standards Act. These new FLSA salary thresholds took effect on January 1. Going forward, employees must be paid on a salary basis at least $684 per week, or $35,568 per year, to be classified as exempt under the executive, administrative, or some professional exemptions.