5 Things MA Employers Need to do to Welcome New Wages in the New Year
With the New Year just around the corner, it is important to remember the MA minimum wage increase for 2020 as well. The MA Trial Court Libraries (2019) offers an update to employers. Effective January 1, 2020, the standard minimum wage will be $12.75 per hour, and the tipped minimum wage will be $4.95 per hour. These increases will continue incrementally through January 2023 when the standard minimum wage reaches $15.00 per hour and the tipped minimum wage reaches $6.75 per hour (MA). In MA, tipped team members are those who earn more than $20.00 in tips within a month’s time.
It is also important to note the Department of Labor (n.d.) recently issued a final rule regarding overtime pay under the Fair Labor Standards Act that will also be in effective January 1, 2020. Under this new ruling, changes have been made in terms of the thresholds needed to classify executive, administrative, and professional team members as exempt from both minimum wage and overtime pay requirements. For instance, the new rule raises the standard salary level to $684 per week and the total annual compensation level for highly compensated team members to $107,432. The final ruling also allows to apply non-discretionary bonuses for up to 10% of the standard salary level.
So, with these wage changes upcoming, what must employers do?
The MA Trial Court Libraries (2019) information suggests employers must:
1. Ensure both their federal and state labor law posters are updated and posted in a place where all team members may see them.
2. If they have tipped team members, they should confirm their processes allow for them to make certain that tipped staff receive at least the regular minimum wage when wages and actual tips are combined as determined at the end of every shift the team member works. On shifts in which the team member does not, the employer must ensure it is paying the difference.
3. Verify that within their organization all tips are being retained by the team member or are being distributed through a tip-pool that is considered to be valid as defined by MGL c.149 § 152A.
Changes indicated by the U.S. Department of Labor (n.d.) also creates some action items for employers:
4. Review their positions considered exempt and ensure the new criteria is met.
5. Determine if they will be utilizing the option of applying non-discretionary bonuses to make up to 10% of the standard salary level within their compensation strategies.
Do you still have questions about this change? Reach out to OptimizeHR today to get those questions answered.
MA Trial Court Law Libraries (2019). Massachusetts law about minimum wage. Retrieved from http: https://www.mass.gov/info-details/massachusetts-law-about-minimum-wage