What You Need to Know About Massachusetts Minimum Wage Increases
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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What happened in 2018?
In late June 2018, Massachusetts Gov. Charlie Baker signed a bill that will progressively raise the state standard minimum wage from $11 an hour to $15 an hour, beginning in 2019. For tipped employees, the minimum wage will increase to $6.75 by 2023.
What’s happening beyond 2019?
Wages for tipped and non-tipped employees will increase between 2019 and 2023. Here’s what the minimum wage increases will look like in the coming years:
|Date||Standard Minimum Wage||Tipped Minimum Wage|
|January 1, 2019||$12.00||$4.35|
|January 1, 2020||$12.75||$4.95|
|January 1, 2021||$13.50||$5.55|
|January 1, 2022||$14.25||$6.15|
|January 1, 2023||$15.00||$6.75|
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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