Massachusetts Minimum Wage Increases - Everything You Need to Know
As a small business owner in the Bay State, we know you’re eager to stay on top of the recent minimum wage increases. So we’ve put together this quick guide with all the info you need to know.
What is the minimum wage in Massachusetts?
The state minimum wage in Massachusetts is $11.00 per hour for non-tipped employees.
If you run a business with tipped employees (defined as employees who receive more than $20 a month in tips), you may pay them a minimum wage of $3.75 per hour. However, employees must be informed of this hourly rate and must receive at least the minimum wage when actual tips and wages are combined.
Keep in mind that counties, cities, and towns may have their own minimum wage laws. Be sure to check what local wage laws may apply to you.
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Are there plans to change the minimum wage in Massachusetts?
There are various bills pending in the Massachusetts legislature that would raise the minimum wage in certain industries, as well as at least one bill that would gradually raise the state’s minimum wage for all employers to $15.00 per hour by 2021. These bills remain in the early stages of the legislative process, so it is unclear whether any will become law.
What’s happening in 2018?
In addition to the multiple bills pending in the legislature, a statewide ballot proposal will be presented directly to voters on the November 2018 ballot. This proposal would raise the minimum wage to $15 ($9.00 for tipped employees) by 2022.
What’s happening beyond 2018?
There are robust efforts within the legislature and activist groups to push for a minimum wage hike in Massachusetts, so keep an eye on legislative developments to see if any of these efforts are successful.
How should small business owners prepare for possible changes to the minimum wage?
With changes to Massachusetts’ minimum wage potentially on the horizon, you should make sure you are prepared. Every business is different, so there isn’t one right way to do this. Here are a few options you may want to consider:
- Audit your expenses: Check your cash flow in detail and create a hiring plan that you can afford. In some cases, you may find that hiring temporary workers as needed is less expensive than taking on full-time regular staff.
- Make sure you hire and keep the right employees: Replacing an employee can cost a lot. You can decrease the total cost associated with recruiting and training when you hire (and then retain) the right people. Look for candidates with good track records, who come recommended, and who fit in with the company culture. Once the employee is onboarded, make sure you build a relationship and provide paths for employee growth; it makes it more likely that they will stay in their role.
- Update tech: Consider automating certain aspects of the work (like payroll), and find ways to reduce production costs.
As always, to make sure your business is prepared and stays in compliance, you should discuss these potential changes to the Massachusetts minimum wage laws with your accountant and lawyer.
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