This is a detailed analysis of the new minimum wage law and how employers must respond. It was developed by the firm Hirsch Roberts Weinstein LLP.
The minimum wage in Massachusetts increased to $9.00 an hour as of January 1, 2015. The law, amending M.G.L. Ch.151, also includes increases in the minimum service rate payable to tipped employees, and exemptions for seasonal camp counselors and counselor trainees. New regulations implementing the wage increase and other changes took effect on January 16, 2015. After HRW attorneys testified at a public hearing regarding the proposed regulations, several of the firm’s recommendations were included in the final regulations. Significant changes in the amended law and new regulations are discussed below.
Minimum Wage and Overtime Rates
As noted above, the Massachusetts minimum wage for covered employees is now $9.00 an hour. The amended law further increases the minimum wage to $10.00 an hour on January 1, 2016, and $11.00 an hour on January 1, 2017. The minimum wage requirement applies to all employees except those excluded under M.G.L. Ch.151, Sec. 1A, for example, bona fide executive, administrative, or professional employees, golf caddies, fishermen, etc. Overtime pay for minimum wage employees is now $13.50 per hour, for hours worked over 40 per week (one and a half times the basic minimum hourly wage).
Tipped employees, defined as service workers who regularly receive over $20.00 a month in tips, must now be paid a service rate of $3.00 an hour, effective January 1, 2015. Employers may only pay a tipped employee the service rate, instead of the basic minimum wage, if (1) they inform the tipped employee in writing of the tipping law; (2) the employee actually receive tips in an amount that, added to the service rate, equals or exceeds the basic minimum wage; and (3) the employee keeps all tips received individually or through a tip-pooling arrangement. Tip-pooling arrangements must conform to the state law governing tip pools. If a tipped employee does not receive at least $9.00 an hour including tips, the employer is required to increase the service rate to make up the difference.
The amended law and regulations further increases the service rate for tipped employees to $3.35 an hour in 2016, and $3.75 an hour in 2017.
The Massachusetts overtime provisions do not apply to tipped employees who work in restaurants and other employees exempted under M.G.L. Ch. 151A. Employers must comply with the federal Fair Labor Standards Act’s (FLSA) requirements for overtime for tipped employees who are subject to the overtime pay provisions of the FLSA.
Summer Camp Employees
In response to testimony from interested parties, the new regulations were drafted to allow a full minimum wage exemption for seasonal camp counselors and trainees. The amended law explicitly exempts seasonal camp counselors and counselor trainees from the minimum wage and overtime provisions.
The regulations on computing hours worked include the requirement that employees who are scheduled for three hours or more of work, who report for duty at the time scheduled by the employer, shall be paid for at least three hours of work, at no less than the minimum wage, even if the employer does not give the employee the expected hours of work. The regulations also cover payment for on-call time, sleep time and working shifts, and travel time.
Time frame for Producing Payroll Records
At the suggestion of HRW attorneys, the legislature changed the proposed regulation on recordkeeping, giving employers 10 business days to meet an employee’s request for a copy of his or her payroll records, instead of only five.
Sick Time Recordkeeping Not Required
Also in response to testimony from HRW attorneys, the final regulation on recordkeeping does not require employers to keep records of sick time earned or available to employees. The legislature noted that regulations covering the newly passed Massachusetts sick leave law have not yet been issued, so that requiring records of sick time was premature. For more information on this new law, check out our recent alert by clicking here. HRW suggested at the public hearing that employers who offer paid sick time that is more generous than the requirements of the sick leave law should not be required to keep records of sick time.