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Minimum Wage: Massachusetts

Minimum Wage requirements for other states

Federal law and guidance on this subject should be reviewed together with this section.

Authors: R. Liliana Palacios-Baldwin and David B. Wilson, Hirsch Roberts Weinstein LLP

Updating Author: XpertHR Editorial Team

Summary

  • Massachusetts employers must pay their employees a minimum wage unless they are exempt. See Minimum Wage.
  • Tips and the costs of meals and lodging can be applied toward minimum wage obligations. See Tip Credit and Credit for Meals and Lodging.
  • Certain workers with disabilities, student workers and others may be paid less than the minimum wage. See Subminimum Wages.

Minimum Wage

Employers must pay nonexempt employees a minimum wage of $12.00 per hour.

While having no effect at this time, Massachusetts law also provides that its minimum wage will be at least 50 cents higher than the federal minimum rate. Employers can decide what amount of wages, if any, they will pay above the statutory minimum.

The minimum wage is scheduled to increase according to the following schedule:

  • $12.75, effective January 1, 2020;
  • $13.50, effective January 1, 2021;
  • $14.25, effective January 1, 2022; and
  • $15.00, effective January 1, 2022.

+ALM GL ch. 151, § 1, as amended by +2017 Bill Text MA H.B. 4640.

Agricultural Employees

Massachusetts has a separate minimum wage for agriculture and farming employees of $8.00 per hour. +ALM GL ch. 151, § 2A.

Tip Credit

The wage an employer is required to pay a tipped employee must be an amount equal to:

  1. The direct cash wage paid to the tipped employee employee (which currently must be at least $4.35 per hour paid by the employer); and
  2. An additional amount on account of the tips received by the employee, which must equal the difference between the aforementioned direct cash wage under clause 1 and the current minimum wage in effect under +ALM GL ch. 151, § 1 (which currently is $12.00).

Currently, the maximum tip credit an employer may claim is $7.65 per hour.

Effective January 1, 2019, an employer must calculate the additional amount required by clause 2 at the completion of each shift worked by the employee, with payments to the employee to be consistent with +ALM GL ch. 149, § 148 (see Payment of Wages: Massachusetts).

According to guidance from the Massachusetts Attorney General's Office, this means that employers must calculate the difference between the service rate and earned tips at the completion of each shift worked by the employee to ensure the employee earned at least the minimum wage for all hours worked when the service rate and earned tips are added together. The employer is required to add any amount due to the employee's next pay check.

Practical Example

The Massachusetts Attorney General's Office offers the following example:

  • Assume that the minimum wage is $12.00 per hour and the service rate is $4.35 per hour.
  • A restaurant server works one five-hour shift on Tuesday and one five-hour shift on Saturday during the same pay week.
  • On Tuesday, the slow day, the employee earns $21.75 in service rate wages + $20.00 in tips for a total earned of $41.75. The law requires that the employee receive at least $60.00 for the shift (five hours × $12.00 minimum wage rate). The employer is required to add $18.25 to the employee's next pay check to cover the differential for this shift.
  • On Saturday, the busy day, the employee earns $21.75 in service rate wages + $100 in tips for a total earned of $121.75. Since this total exceeds the $12.00 per hour minimum wage rate for each hour worked, the employer is not required to add any amount to the employee's next pay check for this shift.
  • Total gross wages to be paid to this employee for this pay week = $181.75.

An employer may pay the minimum direct cash wage to the employee only if:

  • The employer has informed the employee of the aforementioned conditions;
  • The employee customarily and regularly receives at least $20 a month in tips;
  • The employee actually received tips in an amount which, when added to the service rate of $4.35 per hour, equals or exceeds the basic minimum wage of $12.00 per hour; and
  • All tips received by the employee were either retained by him or her or were distributed to him or her through a tip-pooling arrangement.

Unless all of these requirements are met, the employer must pay a tipped employee the full basic minimum wage rate of $12.00 per hour.

The minimum direct cash wage is scheduled to increase according to the following schedule:

Date Minimum wage Minimum direct cash wage Maximum tip credit
January 1, 2020 $12.75 $4.95 $7.80
January 1, 2021 $13.50 $5.55 $7.95
January 1, 2022 $14.25 $6.15 $8.10
January 1, 2023 $15.00 $6.75 $8.25

+ALM GL ch. 151, §7, as amended by +2017 Bill Text MA H.B. 4640; +454 CMR § 27.03.

Massachusetts' tip credit rules do not prohibit an employer from imposing a no-tipping policy. Meshna v. Scrivanos, +471 Mass. 169 (Mass. 2015).

Coverage / Definitions

A tipped employee is an employee who regularly receives gratuities of more than $20 a month. +454 CMR 27.02.

A wait staff employee is a person - including a waiter, waitress, bus person and counter staff - who:

  • Serves beverages or prepared food directly to patrons, or who clears patrons' tables;
  • Works in a restaurant, banquet facility or other place where prepared food or beverages are served; and
  • Has no managerial responsibility.

A service employee is a person who works in an occupation in which employees customarily receive tips or gratuities, and who provides service directly to customers or consumers, but who works in an occupation other than in food or beverage service, and who has no managerial responsibility.

A service bartender is a person who prepares alcoholic or nonalcoholic beverages for patrons to be served by another employee, such as a wait staff employee.

An employer is any person or entity having employees in its service, including an owner or officer of an establishment employing wait staff employees, service employees, or service bartenders, or any person whose primary responsibility is the management or supervision of wait staff employees, service employees, or service bartenders.

A patron is any person who is served by a wait staff employee or service employee at any place where such employees perform work, including, but not limited to, any restaurant, banquet facility or other place at which prepared food or beverage is served, or any person who pays a tip or service charge to any wait staff employee, service employee or service bartender.

A service charge is a fee charged by an employer to a patron in lieu of a tip to any wait staff employee, service employee or service bartender, including any fee designated as a service charge, tip, gratuity or a fee that a patron or other consumer would reasonably expect to be given to a wait staff employee, service employee, or service bartender in lieu of, or in addition to, a tip.

A tip is a sum of money, including any amount designated by a credit card patron, a gift or a gratuity, given as an acknowledgment of any service performed by a wait staff employee, service employee, or service bartender.

+ALM GL ch. 149, § 152A.

Employee Property

An employer is prohibited from demanding, requesting or accepting from any wait staff employee, service employee, or service bartender (as defined above) any payment or deduction from a tip or service charge given to them by a patron. +ALM GL ch. 149, §152A.

Employee Notice

As described above, an employer must inform employees about the tip credit conditions.

Tip Pools

An employer may require service employees to pool their tips, but only with other service employees, service bartenders and wait staff employees (as defined above). All the proceeds of a tip, gratuity or service charge that appears on a customer's bill must be given only to wait staff employees or service bartenders in proportion to the service provided by those employees. Management employees or owners may not share or receive any portion of their employees' tips. +ALM GL ch. 149, §152A.

Service Charges

If an employer submits a bill, invoice or charge to a patron or other person that imposes a service charge or tip (as defined above), the total proceeds of that service charge or tip must be remitted only to the wait staff employees, service employees or service bartenders in proportion to the service they provided.

An employer may impose on patrons a house fee or administrative fee in addition to or instead of a service charge or tip if it provides a designation or written description of its house fee or administrative fee, which informs the patron that the fee does not represent a tip or service charge for wait staff employees, service employees or service bartenders.

Any service charge or tip remitted by a patron to an employer must be paid to the wait staff employee, service employee or service bartender by the end of the same business day, and in no case later than the time set forth for timely payment of wages under section +ALM GL ch. 149, § 148 (see Payment of Wages: Massachusetts).

+ALM GL ch. 149, § 152A.

Credit for Meals and Lodging

Employers may sometimes apply the cost of meals and lodging toward the minimum wage.

The employer must give the employee prior written notice that:

  • Describes the meal or lodging plan;
  • Sets forth the amount to be charged to the employee for the meals or lodging; and
  • Provides notice that the employee's acceptance of the meals or lodging is voluntary.

An employer may not make deductions for meals or lodging from employees who are paid subminimum wages.

+454 CMR § 27.05.

Meals

An employer that provides meals may deduct from an employee's minimum wage up to $1.50 for breakfasts, $2.25 for lunches and $2.25 for dinners. The employee must voluntarily accept the deductions in writing and actually receive the meal.

Each day, employers may make a deduction of:

  • One meal for an employee working three hours or more;
  • Two meals for an employee whose work entirely covers two meal periods or eight hours of work; and
  • Three meals for an employee to whom lodging is provided, or for whom special permission is granted by the Director of the Massachusetts Department of Labor Standards.

+454 CMR § 27.05.

Lodging

Employers that provide an employee lodging that is safe and sanitary, and meets state housing standards including heat, potable water, and light, may deduct from an employee's minimum wage:

  • $35 per week for a room occupied by one person;
  • $30 per week for a room occupied by two persons; and
  • $25 per week for a room occupied by three or more persons.

The deduction for lodging is not allowed unless the room is actually used by the employee and unless the employee desires the room.

+454 CMR § 27.05(1).

Deductions for Uniforms

Employers that require their employees to wear uniforms that need dry-cleaning, commercial laundering or other special treatment must reimburse the employees for the cost of cleaning if it brings their pay below the minimum wage.

When uniforms are made of "wash and wear" materials that do not require special treatment and are routinely washed and dried with other personal garments, the employer does not need to reimburse the employee for uniform-maintenance costs.

+454 CMR § 27.05(2).

Subminimum Wages

Massachusetts employers may pay student workers and workers with disabilities at wages lower than the minimum wage.

Student Workers

Employers that obtain a special license from the Director of the Department of Labor and Workforce Development may pay certain student workers 80 percent of the basic minimum wage, as follows:

  • Any hospital or laboratory for students whose employment is part of a formal training program;
  • Any school, college or university, or a bona fide educational institution for students enrolled in and employed by said institutions;
  • Any nonprofit establishment for minors attending secondary school who work part-time in hospital wards, school and college dining rooms and dormitories, where the ratio of one minor to five adult persons working in these areas is maintained.

+454 CMR § 27.06(1).

Workers With Disabilities

With a certificate from the state, employers may pay subminimum wages to employees whose earning capacity is impaired by age or physical or mental deficiency or injury, or employees who are certified by the Secretary of Health and Human Services or his designee as a handicapped person. +ALM GL ch. 151, §7.

Communications in Postings Required by Massachusetts Law

Massachusetts requires a poster relating to the minimum wage and other requirements. +ALM GL ch. 151, § 16.

Future Developments

There are scheduled increases to the minimum wage and the credit for tipped employees.