By Robert Sheridan
Massachusetts is the latest state to take up the minimum wage mantle, as Governor Deval Patrick signed a law raising minimum wage in the state on June 26th. As we have discussed on this blog, there is a movement afoot nationally to raise the minimum wage for low wage workers, and states and cities keep upping the minimum wage ante. With its new law, Massachusetts will now have the highest minimum wage of any state in the union.
The details of the law are as follows:
- The wage increase will be gradual—with increases as follows: (1) $9.00 / hr. on January 1, 2015; (2) $10.00 / hr. on January 1, 2016 and (3) $11 / hr. on January 1, 2017. The wage increases will not be indexed to inflation (as some proponents advocated for and other states like Washington have implemented).
- The law also provides an increase in the minimum wage for tipped employees, like restaurant servers, from the current rate of $2.63 / hr. to $3.75 / hr. by 2017.
- Additionally, agricultural and farm workers will see a dramatic increase in their minimum wage—from the current rate of $1.60 / hr. to $8.00 / hr.
- Finally, the law included a measure aimed at stabilizing unemployment insurance by freezing rates for three years and adjusting the rating tables
According to the Massachusetts Budget and Policy Center, the provision applicable to non-tipped employees alone will affect more than 600,000 workers in Massachusetts (1 out of every 5 workers in the state). Employers with low wage workers need to be prepared for the implications of this law, as the first step of the increase is only six months away. Given the speed with which United States cities and states are raising minimum wage rates, we expect to see other increases soon and will be tracking the movement closely.
For a detailed analysis of the voting behind the minimum wage increase as well as an assessment of the Massachusetts Legislature’s proposed economic development bill, please see the excellent advisory authored by our colleagues at ML Strategies.