This year has seen a number of changes in laws affecting HR and Payroll in the state of Massachusetts. Commonwealth Payroll & Human Resources hosted a webinar outlining these changes on October 26, 2018. The webinar was presented by Kara Govro, JD, SPHR, and will remain available online until April 15, 2019.
The following is a recap of this presentation.
Minimum Wage and Overtime Pay
Beginning January 1, 2019, the minimum wage in Massachusetts will increase to $12.00 per hour. The minimum wage will increase by $0.75 an hour on January 1 every year until 2023, when the minimum wage will be $15.00 an hour. This is a big change (or rather, a series of changes) for your payroll process. An even bigger change, however, will be related to Sunday overtime.
At the same time that the minimum wage is increasing, overtime/premium pay for hours worked on Sunday (known as part of the ‘Blue Laws’ ’https://www.mass.gov/guides/working-on-sundays-and-holidays-blue-laws will be decreasing. Currently in Massachusetts, hours worked on Sunday by employees of certain businesses are compensated at a rate of 1.5 times the current hourly rate. Beginning on January 1, 2019, that rate will decline by $0.10 an hour, and will continue to decline at the same rate until 2023 when it will be eliminated. Why is this a big deal? The change in Sunday overtime will impact any other overtime a Massachusetts employee is owed.
Federal law currently mandates that all worked hours over 40 in a single week be compensated at 1.5 times the employees’ rate of pay. Any hours paid at the overtime rate are credited toward the federal overtime requirement. If an employee works 45 hours in a week, she is owed 5 hours of overtime pay. If 8 of those hours were worked on Sunday and paid at 1.5 times the regular rate of pay, the employee is not owed any federal overtime. That’s because the additional pay that would have been due under federal law has already been paid by the employer as mandated by the state of Massachusetts.
The change in Sunday pay in Massachusetts means that as of January 2019, hours that are worked on Sunday will no longer meet the federal overtime pay requirement. Sunday hours worked will still be paid at a higher rate, but they will no longer be credited toward federal overtime. An employee in Fall River who works 43 hours in a week, including 8 hours on Sunday, will, as of January 2019, be paid 40 regular hours, 3 federal overtime hours at 1.5 times her regular rate of pay, and 8 hours of Sunday premium pay at 1.4 times her regular pay rate.
The Sunday rate of pay in Massachusetts will continue to decline on January 1 of each year. In 2020, the Sunday rate of pay will be 1.3 times the regular rate of pay; and in 2021, it will be 1.2 times the regular rate of pay. As of 2023, the rate of pay for hours worked on Sunday will not be different from the rate of pay for any other day for Massachusetts workers.
Equal Pay Act
On July 1, 2018, Massachusetts implemented the Equal Pay Act. This act prohibits pay discrimination based on gender. Under the law, the reasons for differences in pay are limited to the following:
- Merit system
- Earnings by quantity or quality of production, such as commission
- Location of work site
- Experience, training, or education that directly pertains to the job
- Work-required travel
As of July 2018, the reason for a pay difference must be one of the reasons on the above list. In addition, asking about salary history before extending an offer of employment is against the law. The Massachusetts Equal Pay Act effectively eliminates salary negotiation during the hiring process.
Off-Duty Marijuana Use
On July 1, recreational marijuana use became legal in the state of Massachusetts (medical marijuana has been legal in the state since 2012). Although the law has been updated to make the recreational use of marijuana legal, the impact of recreational marijuana use on employment has not been affected. Employers currently have the right to test employees for marijuana use, and to base discipline and employment decisions on the results of those tests. However, employers in Massachusetts would be wise to remember that there haven’t yet been any lawsuits regarding the legality of disciplining or terminating employees for recreational marijuana use away from work. It would be wise to consider the possibility of inadvertently becoming the test case for this law before taking adverse action on employees who are found to be using marijuana away from the office.
Employers should make sure that their workplace marijuana policy is clearly outlined and updated.
Pregnant Worker’s Fairness Act
The Pregnant Worker’s Fairness Act went into effect on April 1, 2018. Briefly stated, the act requires that all Massachusetts employers with more than six employees provide reasonable accommodation for pregnant workers. The law divides reasonable accommodations into two categories: those that require medical documentation and those that don’t. Accommodations that require medical documentation include:
- Requested time off (either with or without pay)
- Modified work schedule or job duties, including temporary transfer to a less stressful position
- Lifting restrictions under 20 pounds
- Purchase or modification of work equipment or seating
Accommodations that don’t require medical documentation include:
- Additional or more frequent restroom breaks or breaks to eat or drink
- Limit lifting over 20 pounds
- More frequent seating
- Private space for expressing milk (other than a bathroom)
Massachusetts employers are also advised that retaliation to an accommodation request or denial of an opportunity for employment or promotion due to pregnancy is strictly prohibited.
Protected Paid Family and Medical Leave
The Grand Bargain expanded the definition of who is eligible for LOA. Under the Family Medical Leave Act, an employee has to have been employed for at least 12 months and have worked at least 1250 hours in that time. Under the Grand Bargain, all employees in Massachusetts are eligible for LOA, regardless of the length of time they’ve been employed or the number of hours worked. The Grand Bargain also extends the time that can be taken for leave. Under the Grand Bargain, employees can take up to 12 weeks to care for a family member’s serious illness. Employees can also take up to 20 weeks for their own illness. Family and employee leave both run concurrently with FMLA, though Massachusetts state leave covers family members that aren’t covered under FMLA, such as grandparents and siblings.
Another major change brought about by the Grand Bargain is the creation of paid leave. Massachusetts paid leave will be funded by payroll tax deductions and employer payroll taxes. Beginning July 1, 2019, all employers with more than 25 employees must begin contributing .63% of each employee’s earnings to the paid leave trust fund. Paid leave will become available to Massachusetts employees beginning in 2021. When an employee goes on medical leave for their own illness, the employer may deduct 40% of their contributions. If an employee takes leave for a family member, the employer may deduct 100% of their contribution to the fund. The amounts of contribution are subject to change.
Human Resources Management after 2018
The Grand Bargain, the Equal Pay Act, and other changes in Massachusetts labor law pose considerable challenges to Human Resources, especially for payroll administration. The changes are being implemented in a gradual manner in order to allow employers time to adjust. Now is the time to review your HR practices and to seek advice about making the transition as uneventful as possible.
For more information on how Commonwealth Payroll & HR can work with you on your strategic human resources planning, call us today at 877-245-1159