For those following the minimum wage increases in Massachusetts, this is no surprise as the increases are part of the planned move to $15.00 by January 1, 2023.

If you are an employee making less than wage, give us a call.  We’d be happy to discuss the situation with you.

Minimum Wage Increase to $13.50 on January 1, 2021: What Employers and Employees Need to Know

Starting January 1, 2021, the minimum wage in Massachusetts is set to increase to $13.50 per hour, marking a significant change for businesses across the state. This wage increase is part of a multi-year plan that aims to gradually raise the state’s wage to $15 per hour by 2023. For both employers and employees, understanding the impact of this increase is crucial to ensuring compliance and avoiding potential legal issues.

What Does the Minimum Wage Increase Mean for Employers?

The wage increase to $13.50 per hour affects most businesses that employ hourly workers in Massachusetts. Employers will need to adjust their payroll systems and compensation practices to ensure that they are paying their employees in accordance with the new law. Failure to comply with the new wage requirements can result in penalties and fines from the Massachusetts Attorney General’s office.

Employers should also be aware of other related changes, including adjustments to overtime pay. In Massachusetts, employees who work more than 40 hours per week must be paid at least 1.5 times the regular minimum wage rate. With the increase in the base rate, the overtime rate will also rise, which may affect businesses that rely heavily on overtime.

Who Was Most Affected?

The minimum wage increase mainly supported lower-paid professionals including:

• Retail and store workers
• Manual laborers and shift workers
• Customer service teams
• Service professionals receiving tips
• Food and hospitality staff

Although this rise may sound small, it set the foundation for future wage reforms and created immediate payroll adjustments for both employers and employees.

Major Reforms for Tipped Service Advisors and Service Workers

Service staff, especially in food and automobile-related shops, often rely on tip income. Employers can apply a tip credit, allowing them to pay a lower hourly base so long as tips compensate the difference to reach minimum wage. However, lawmakers restricted how large this credit could be.

For service employers and restaurants, the maximum tip credit was reduced:

• From $3.50 per hour
• To $1.50 per hour

As result, the required minimum base pay for tipped workers rose:

• From $5.00 per hour
• To $7.50 per hour

This shift ensured tipped employees received a stronger guaranteed hourly component, regardless of customer volume or slow business days.

Overtime Wage Impact

Both federal and state law mandate that overtime must be paid at 1.5× hourly rate. Based on the new $9.00 minimum wage, the updated 2015 overtime rate became:

• $13.50 per hour, up from $13.13

Even though the DOL announced that withdrawal did not change legal responsibilities, many automotive and food employers had to revisit payroll calculations, overtime approval processes, and worker classification assumptions.

Workplace Classification Still Matters

Interpretations from agencies like the United States Department of Labor shaped employer policy for years. Still, courts now rely more on job duties than old handbook references. Employers using outdated assumptions may face pay misclassification claims.

What Employers Must Do Now

To maintain compliance and avoid liability, companies should update:

Dispute-resolution strategy with legal support

Pay benchmarking systems

Tipped worker payroll models

Overtime calculations

Internal wage-classification reviews

If you have questions about New York’s new minimum wage rate, contact our office to speak with an experienced attorney.

Employees excepted from the requirement include:

• workers in rehabilitation or training with charitable, religious or educational institutions;
• agricultural workers;
• professionals; and
• outside salespersons.

The minimum wage applicable for agricultural workers is $8 per hour. Employers are required to pay this rate unless workers are under the age of 18 years old, or are members of the employer’s immediate family.

Service Rate Increases

Services workers – such as waiters, waitresses, bartenders, and other service employees – also receive an increase under the legislation. These changes may apply to wait staff employees, bartenders and any other serve employee receiving more than $20 per month in tips.

• As of January 1, 2015, the service rate increased to $3.00 per hour
• As of January 1, 2016, the service rate increases to $3.35 per hour
• As of January 1, 2017, the service rate increases to $3.75 per hour

But note that even for servers, these new service rates only apply if average hourly tips, when added to the service rate, equal at least the state minimum wage.

If you have any questions about the legislation or other minimum wage inquires, contact us today.

The case involved warehouse workers who pulled items from shelves and packaged them for delivery.  At the conclusion of each shift, the company mandated that each worker pass through a security screening.  According to the employees, this process took approximately 25 minutes to complete.  In bringing the case, the plaintiffs asserted that they should be paid for this additional time.

What is an “Integral and Indispensable” Activity

Though the workers were successful in front of the Ninth Circuit Court of Appeals, the Supreme Court reversed and handed a major victory to employers. In defining an “Integral and Indispensable” responsibility, the court explained that it is an “intrinsic element of those [work] activities and one with which the employee cannot dispense if he is to perform his principal activities.” In this case, the Court found that the security screenings were not essential to the work responsibilities, ruling that the employees were able to continue with their responsibilities whether or not the security screenings continued.

If you have questions about the implications of this court decision, contact our office for a free case evaluation.

Two crucial pieces of proposed legislation will be decided by July 31^st.  The proposals include a hike in the minimum wage to $11.00 and a ban on noncompete agreements. Both proposals are great news for employees.

If the legislation for the new minimum wage passes, then by January 1, 2017 the minimum wage in Massachusetts will be $11.00. Currently, the minimum wage is $8.00 and it would rise in increments until it reaches $11.00 in 2017. This will be the highest minimum wage of any state.

Some employers argue that noncompete agreements are necessary to protect trade secrets and intellectual property.  Yet, they also drain our state of some of its brightest talent, requiring those workers to move to states that restrict noncompetition agreements and benefitting companies in those states at the expense of our own.  New legislation, proposed as part of an economic stimulus package and supported by Governor Patrick, would ban noncompetes and restore our state’s base.

If you have any questions about the new proposals, contact us.

Tipped Worker Pay and Employer Top-Up Rules

The order also updates wages for tipped employees under covered federal contracts. Employers must pay at least $4.90 per hour in base wages to tipped staff. If tips do not reach the full $10.10 minimum, the employer must top up the worker’s pay. This ensures total earnings meet the required hourly minimum. Many view the policy as part of a wider federal push to lift wage standards step by step. Some see it as a signal for future national wage discussions.

Compliance and Future Wage Outlook (Contracts)

Guidelines from the U.S. Department of Labor continue to protect workers from being paid below legal minimums. Employers that fail to follow pay, top-up, or contract wage rules may face penalties or worker complaints. The policy marks a turning point for contract service workers supporting the federal government. Additional federal wage policy changes may emerge in the future, so businesses and workers should stay informed.