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E-Alert!!!
  
"Grand Bargain" Accomplished
Minimum Wage, Paid Family and Medical Leave and Sales Tax Holiday Bill Signed into Law
 
After extensive negotiations, Massachusetts lawmakers finally reached a compromise on a bill that is full of measures that impact employers.

The term "Grand Bargain" has been used by many to describe the bill ( H.4640 - which can be downloaded here) but it is hardly a "bargain" in terms of it coming cheap to employers. Rather the bill represents some "give and take" with the cost being not as extensive as that which was originally sought should these items have made it to the November ballot. 

A breakdown follows:

Paid Family Leave:  Under this compromise, Massachusetts employees will be eligible to take up to 12 weeks of paid family leave (which is a reduction from 16 weeks under the proposed ballot measure) and up to 20 weeks of paid medical leave for dealing with serious injuries or illnesses of their own or those of family members (which is a reduction from the original 26 weeks sought on the proposed ballot measure). The maximum weekly benefit would be capped at $850 (which is a reduction of $1,000 as initially proposed).

During a leave, health insurance would remain in effect with employees only having to pay their own share of the premium and job protections would likewise apply.

The program would be funded in one of two ways: either through a 0.63% payroll tax that employers would have to pay though a portion could be recouped from employees by way of an employee payroll deduction (employers with less than 25 employees would be exempt from this tax). Alternatively (and similar to the New York Paid leave model), employers could meet their obligations through the establishment and funding of a private plan (either a self-insured plan or purchasing a fully-insured plan) that would pay out this benefit to employees.

The funding of the program would begin on January 1, 2020 with the benefit being available to employees effective on January 1, 2021.

[Regulations ironing out the finer details will be forthcoming in 2019.]

Phased-in Minimum wage and Tipped/Service Rate Increases: The state minimum wage would rise over a five year period as follows:
  • $12.00/hour - effective January 1, 2019;
  • $12.75/hour - effective January 1, 2020;
  • $13.50/hour - effective January 1, 2021;
  • $14.25/hour - effective January 1, 2022;
  • $15.00/hour - effective January 1, 2023.
Similarly, the tipped employee service rate will likewise rise over a five year period as follows:
  • $4.35/hour - effective January 1, 2019;
  • $4.95/hour - effective January 1, 2020;
  • $5.55/hour - effective January 1, 2021;
  • $6.15/hour - effective January 1, 2022;
  • $6.75/hour - effective January 1, 2023.
Phasing Out Premium Pay Obligations for Retailers for Sunday and Holiday Work: A trade-off (benefiting the Retail sector) is that the premium pay rate standard for Sunday and Holiday work would be gradually eliminated. Currently, retailers have to pay 1.5 times the regular rate of pay for work on Sundays and holidays. Under the measure, the obligation gets reduced to 1.4 times the regular rate, effective January 1, 2019; 1.3 times, effective January 1, 2020; 1.2 times, effective January 1, 2021, 1.1 times, effective January 1, 2022, with the premium pay standard for Sunday and holiday work being eliminated altogether effective January 1, 2023.

Time to Buy Your Flat Screen TV - Sales Tax Holiday to Become Permanent!: Finally, the popular Sales Tax holiday that consumers have come to expect would become permanent and would take place in August with the exact weekend being determined by the legislature each year no later than June 15th.


EANE is working on getting a briefing scheduled on this significant legislation and we will keep you posted.  In the interim, please do not hesitate to reach out to our hotline with your questions.


   
  
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