As a small-business owner in the Bay State, we know you’re eager to stay on top of current Massachusetts minimum wage increases. So we’ve put together this quick guide with all the info you need to know about the Massachusetts minimum wage program and changes affecting the state in 2023 and beyond.
What is the minimum wage in Massachusetts?
The Massachusetts minimum wage will increase from $14.25 per hour to $15 per hour on January 1, 2023 for non-tipped employees, which is higher than the federal minimum wage of $7.25.
The Massachusetts tipped employee minimum wage is a little different. 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 $6.15 per hour in 2022, with that rate rising to $6.75 in 2023. 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 which local wage laws, such as the minimum wage in Boston, Massachusetts, 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 will Massachusetts minimum wage be in 2023 and beyond?
Wages for tipped and non-tipped employees will continue to increase until 2023.
|Date||Standard Minimum Wage||Tipped Minimum Wage|
|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 in 2023?
With changes to the minimum wage in Massachusetts 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: Find ways to reduce production costs. Square Payroll makes it easier to automate certain aspects of your work and is priced for small businesses. New Payroll features will help you automatically file payroll taxes, run payroll, and manage employee benefits.
As always, to make sure your business is prepared and stays in compliance (such as making sure you get an EIN, you should discuss these potential changes to the Massachusetts minimum wage laws with your accountant and lawyer.