Massachusetts has enacted a number of new policies this summer in an effort to holistically improve conditions for workers. These are aptly punctuated by the maverick “Grand Bargain Act.”
This new legislation’s most notable characteristic is how it will affect worker pay. With such significant modifications to payroll, your payroll professionals will need to do their homework regarding what this new policy entails.
Here is everything you should know about how the Grand Bargain Act affects wages.
Minimum Wage Increase
As allowed by the Grand Bargain Act, there will be a rise in the state minimum wage from the current $11/hr to $15/hr by 2023.
This legislation sets a gradual increase in $.75 increments, beginning with a jump to $12/hr in 2019, and “from then on: $12.75 in 2020, $13.50 in 2021, $14.25 in 2022, and $15 in 2023,” according to an article on boston.com.
This wage increase sets Massachusetts among the ranks of California, New York, and Washington D.C. for having the highest minimum wage in the country.
Tipped Worker Wages
It is commonly understood that tipped workers tend to make a paltry hourly wage, one that is, ideally, compensated by tips from customers.
Though this wage is significantly lower than the state minimum, it will also be increasing with the help of the Grand Bargain Act.
Currently, the tipped-worker wage in Massachusetts is $3.75/hr and, as with the statewide minimum wage, it will also raise gradually. Wages for tipped workers will increase by $.60 per year until they reaches an eventual $6.75/hr.
Sunday/ Holiday Pay
While this legislation has been resoundingly popular among most workers, one detail of the act does seem to disappoint some retail employees.
Previously, Massachusetts wage policies allowed for time-and-a-half for retail employees working on Sundays or holidays. While this new legislation does away with that policy, its new accommodations may act as a sufficient consolation.
The purpose of eliminating overtime pay on Sundays and holidays is to relieve employers who are now forced to increase their wages for employees, but it also benefits employees in that they cannot be obligated to work on Sundays or holidays and they cannot be punished for an inability or unwillingness to work on those days.
With changes such as these, your HR department may also be affected, in addition to your payroll policies.
This may be a good time to review your employee handbook for time off/ holiday policies to ensure that they are in compliance with the law. Be sure that your HR professionals are kept abreast of this new legislation.
With comprehensive change like the kind Massachusetts has experienced over the past few months, your business may find itself scrambling to stay informed and to make the appropriate modifications to your payroll and HR strategies.
For help staying in compliance with the Grand Bargain Act or to answer any other HR and Payroll related questions, give Commonwealth Payroll & HR a call today at (877) 245-1159
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