New Holiday Premium Pay and Tips Law in Massachusetts
The “grand bargain” tucked into the Economic Stimulus package will bring some changes to hourly wage ruled rules, phasing out the holiday premium pay by 2023 and broadening the definition of “wait staff employee” covered by the Wage Act. Under the new laws, employers will no longer be required to pay higher wages to employees who work on the holidays. In addition, managers in may quick service restaurants may now share in the tip pools collected from customers so long as they are not performing managerial functions that particular day.
While the changes upset many employees long used to the higher pay and better tips, business leaders complained bitterly about their costs and ability to remain in business, forcing action at the legislative level not seen for some time.
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New Holiday Premium Pay and Tips Law in Massachusetts: What Employers Need to Know
Massachusetts has recently enacted a New Holiday Premium Pay and tips law that significantly impacts how businesses handle employee compensation on holidays. This new legislation aims to better protect workers’ rights and ensure they are fairly compensated for working during designated holidays. For employers, understanding the nuances of this new law is crucial to ensuring compliance and avoiding potential legal issues related to overtime and tip regulations.
What Does the New Holiday Premium Pay Law Entail?
Under the New Holiday Premium Pay law, employers are now required to pay employees an increased rate for working on certain holidays. Specifically, the law mandates that businesses must pay employees at least 1.5 times their regular hourly rate for work performed on holidays such as New Year’s Day, Memorial Day, Labor Day, Thanksgiving, and Christmas. This applies to both hourly and salaried employees, though salaried employees may have different conditions based on their job classification.
The law also extends to certain tip-earning employees, ensuring that workers who receive tips, such as those in the hospitality and service industries, receive a fair premium on top of their tips when working on a holiday. This change is part of a broader initiative by Massachusetts lawmakers to ensure equitable pay for workers across industries and provide stronger protections for employees during holidays.
