Foreseeing Likely Outcomes on 3 Ballot Questions, Massachusetts Legislators Pass Law to Increase Minimum Wage, Grant Family and Medical Leave to Employees, and Require an Annual Sales Tax Holiday

They’re calling it a “grand bargain,” but the deal recently reached among legislators, activist groups, businesses and Gov. Charlie Baker is probably more of grand concession than anything else. Seeing the writing on the wall of strong support for three November 2018 ballot questions to raise the minimum wage to $15/hour, create sweeping new leave rights for Massachusetts workers, and reduce the state’s sales tax, the powers-that-be in Boston decided they’d better move to shape the new laws lest they be forced by voters to accept them in less desirable forms. On June 28, Gov. Baker signed the new bill into law. The proponents of all three ballot questions have agreed to withdraw them.

By the year 2013, the Massachusetts minimum wage may be $15.

By the year 2023, the Massachusetts minimum wage may be $15.

Highlighting the “grand bargain” is an increase to the state’s minimum wage from $11 to $15 per hour over a five-year period. This is despite the fact that the state only recently finished increasing the rate from $8 to $11 after many years of doing nothing on the topic. The new minimum wage rate will be $12 on January 1, 2019. From there, it will increase by 75 cents/hour each year until January 1, 2023, when it hits $15. The tipped wage rate – which is paid to workers who receive the bulk of their earnings as tips – will increase by 60 cents per year until it hits $6.75/hour in 2023. Tipped workers must still earn enough in tips to make the minimum hourly wage, and when they don’t employers must make up the difference. The new law will also eliminate the current requirement that retail establishments pay workers at the overtime rate for work on Sundays and holidays.

The new law also grants workers broad leave rights akin to those that now exist only for those covered by the Family and Medical Leave Act, which applies only to certain workers at companies with at least 50 employees. Beginning in 2021, employees can take 12 weeks of family leave and 20 weeks of medical leave – all paid – with job protection rights for their return to duty. While these leave amounts are a bit lower than what was proposed in a November ballot question, they represent a substantial change in current state law nonetheless. Employers need not fear that they alone will bear the cost of this new program. Pay for workers on leave will be funded by a new payroll tax that begins in July 2019. Contributions will be divided about evenly between employers and employees.

Finally, the statute mandates an annual sales tax holiday for a weekend every August. Businesses were pushing for this requirement by ballot question because legislators did not enact the annual event during the past two years. They proposed in the same ballot question that the state’s sales tax be reduced from 6.25% to 5%. The new law does not provide any tax reduction, so the rate remains as is. As to the sales tax holiday, it won’t apply to marijuana (whenever it’s sold in the Commonwealth), alcohol, boats, cars or any item that costs more than $2,500, among a few other items.

New Pregnancy Law Takes Effect April 1; Employers should have Written Policies in Place by Now

Effective on April 1, 2018, Massachusetts will institute its new pregnancy statute. The law brings broad new protections for pregnant employees, some of which benefit women after a child is born, and imposes important obligations on employers. Among them is a written pregnancy policy, which all employers should have already put into place.

The Pregnant Workers Fairness Act was signed last summer by Gov. Charlie Baker. It generally requires employers to treat pregnant employees in the same manner as disabled workers. This includes obligations to implement reasonable workplace accommodations and engage pregnant women for purposes of identifying modifications that will allow them to remain on the job. The specific commands of the new pregnancy law instruct employers to do the following.

  • Provide private, non-bathroom space for lactating mothers.
  • Allow extra leave time as needed beyond the 8 or 12 weeks required by current law for mothers to recover from the effects of childbirth.
  • Restore women to their prior or an equivalent job, with no loss of benefits, when the need for an accommodation ends.
  • Do not penalize women by denying them opportunities based on accommodations for pregnancy or lactation.
  • Do not force pregnant or lactating women to accept accommodations they do not want, unless it’s necessary to allow a woman to perform the essential functions of her job.
  • Do not require women to take a leave of absence for pregnancy or lactation unless it’s required to avoid undue hardship on the employer.
  • Do not refuse to hire an otherwise qualified woman due to her pregnancy or related needs.

Written employer policies should cover these issues as they generally inform employees about their rights under the Pregnant Workers Fairness Act. It makes sense for employers to review hiring and other practices to ensure that the rights of pregnant employees are not inadvertently infringed. Training is likely wise for certain employers, particularly larger ones. Penalties for violating the new pregnancy law can be steep and include lost wages, emotional damages and legal fees incurred by affected employees.

2018 Ballot Question Proposes up to 26 Weeks of Paid Family and Medical Leave to Massachusetts Employees

If a coalition group called Raise Up Massachusetts gets its way, the Commonwealth will soon have a comprehensive new law that provides paid leave to employees for a variety of personal reasons. At the recent deadline for 2018 ballot questions, Raise Up submitted a voter-supported initiative it calls a Family and Medical Leave law. If approved at the polls next November, the new law will provide up to 26 weeks of paid leave annually to Massachusetts employees.

The ballot question divides paid leave into two general categories – “family” and “medical.” Under the former, employees will be entitled to up to 16 weeks of paid family leave each year to care for ill family members, bond with their children, or address military-related emergencies. They’ll be allowed up to 26 weeks to care for a covered service member, as that term is defined by the proposed law. For an employee’s own health condition, he/she will be allowed up to 26 weeks under the medical leave portion of the proposed new law. An employee who uses either family or medical leave will generally need to be restored to the same or a similar job without losing pay or other benefits. Pay will be capped at $1,000 per week.

Wage payments will not come directly from employers under the proposed Family and Medical Leave Law. Instead, a new agency called the Department of Family and Medical Leave will be created to collect employer contributions equal to .63% of employee and independent contractor payrolls. Half of the amount paid by employers can be recouped from workers. The Department of Family and Medical Leave will create regulations to implement and administer the new law. It will make eligibility decisions, pay benefits, and adjust contribution rates periodically as needed.

If voted into law next November, the Family and Medical Leave Law will take effect 18 months later. Contributions to the trust fund, however, will begin on July 1, 2019, roughly a year before the law takes hold. As with other employment laws, the proposed statute bars retaliation against employees who take advantage of its benefits. Any negative change to the terms and conditions of employment within six months of using paid leave will be presumptively retaliatory. Punishment can include up to three times the amount of any lost wages, damages as may be incurred, and reimbursement of legal fees.