Massachusetts has approved “An Act Restoring the Minimum Wage and Providing Unemployment Insurance Reforms.” The law gradually raises the minimum wage to $11 over three years, lowers unemployment insurance (UI) costs for employers across the state, strengthens safety protections for workers and makes permanent the multi-agency task force charged with combatting the underground economy.
The state minimum wage will increase to $9.00 per hour on January 1, 2015, then to $10.00 per hour on January 1, 2016, and finally to $11.00 on January 1, 2017. The state law also provides that in no case shall the minimum wage rate be less than 50 cents higher than the federal minimum wage rate (Currently, the law says no less than 10 cents higher than the federal rate). For farm workers, the minimum wage will increase from $1.60 to $8.00 per hour on January 1, 2015.
The minimum cash wage for tipped employees will also increase, to $3.00 per hour on January 1, 2015, to $3.35 per hour on January 1, 2016, and then to $3.75 per hour on January 1, 2017. Tipped employees are service workers who regularly and customarily receive more than $20 a month in tips. The combination of cash wages plus tips received must equal at least the state minimum wage.
The law reforms to the state’s unemployment insurance system would freeze UI rates for employers for three years and expand the wage base subject to those rates to $15,000. It also extends from one to three years the period the Department of Unemployment Assistance reviews an employer’s usage of UI benefits which is another factor in determining employer premiums.
In addition, the bill will give both workers and employers continued protections from businesses that misclassify workers and abuse wage and hour laws creating unfair competition for employers who play by the rules by codifying the Joint Task Force on the Underground Economy (JTF). With the signing of S. 2915, the JTF will now become a permanent investigative unit. (State of Massachusetts, Office of the Governor, Press Release, June 26, 2014, http://www.mass.gov/governor/pressoffice/pressreleases/2014/0626-governor-patrick-signs-minimum-wage-bill.html; S.B. 2195, https://malegislature.gov/Bills/188/Senate/S2195.)
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