Massachusetts enacted a five-year plan in 2018 to increase the minimum wage. The plan, which resulted from a “grand bargain” between employee advocates and the business community, carried significant implications for Massachusetts employers — namely an increase in the minimum wage to $15.00 and a mandatory paid family and medical leave statute. Now, the possibility of another round of mandatory wage increases looms. What do Massachusetts employers need to know about this proposed law?
Background
In January, Massachusetts completed the final wage increase under the “grand bargain,” raising the minimum wage to $15.00 — a 36% increase from the $11.00 per hour rate in 2018. Without delay, Democrats have already introduced legislation that would impose yet another round of wage increases — which would be even steeper than the last.
The proposed legislation comes at a time when the tension between employee advocates and the state’s business community is as high as ever, given that employees and businesses alike are struggling to recover from the impacts of COVID-19 and economic uncertainty.
Minimum Wage Up, Consumer Price Index In
Over the next four years, the proposed law would dramatically increase the minimum wage from the current $15.00 to $20.00 per hour, with annual increases of $1.25 per hour. Likewise, the “service rate” for tipped workers would increase from $6.75 to $12.00 per hour.
| Date | Minimum Wage | Tipped Minimum Wage |
| January 1, 2024 | $16.25 | $7.92 |
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