Massachusetts Increases Minimum Wage and Ends Premium Pay Effective January 1, 2023

Learn more about Massachusetts’ minimum wage increase and hour changes will take effect on January 1, 2023.

Minimum Wage
Massachusetts’ minimum wage will increase to $15 per hour. The minimum base wage for tipped employees will increase to $6.75 per hour.

Premium Pay Fully Phased Out
The mandatory premium pay rate for hours worked on Sundays and certain holidays, which only applied to retailers and was down to 1.1 times an employee’s regular rate of pay in 2022, will be eliminated. All employers, of course, will still need to pay nonexempt employees 1.5 times their regular rate for all overtime hours (i.e., hours over 40 hours in a workweek).

The so-called “Grand Bargain” bill that Gov. Charlie Baker signed into law in 2018 incrementally decreased the amount businesses were required to pay employees for working on Sundays and legal holidays, with an eventual phase-out scheduled for Jan. 1, 2023.

Premium pay currently applies to New Year’s Day, after 12 p.m. on Columbus Day, and after 1 p.m. on Veterans Day. Premium pay is only required on Memorial Day, Juneteenth Independence Day, Independence Day, and Labor Day if a retailer employs more than seven workers, including the owner.

Through December 31, 2018 retailers that employed more than seven workers were required to pay 1.5 times the regular rate for employees who worked on Sundays or legal holidays. For Sundays, lawmakers decreased that by .1 each year until the rate reached 1.1 times the regular rate starting Jan. 1, 2022.

Holiday premium pay for Memorial Day, Juneteenth Independence Day, Independence Day, and Labor Day decreased at the same rate. But premium pay for New Year’s Day, Columbus Day, and Veterans Day decreased at a slower rate.

The “Grand Bargain” also initiated the sales tax holiday in August, where the state’s 6.25% sales tax on most purchases is suspended for a weekend. And Massachusetts’ minimum wage also increased under the bill and is scheduled to hit $15 an hour in January 2023.

Legislators scrambled to assemble the bill after interest groups, fed up with inaction on Beacon Hill, initiated ballot drives, and forced legislative leaders to engage with them at the negotiating table, or risk having major policies written into law by voters.