2020 has brought with it changes to both the Massachusetts minimum wage and the Fair Labor Standards Act (FLSA) — changes that employers (and employees) should be aware of.
On January 1, 2020, the Massachusetts minimum wage moved from $12 per hour to $12.75 per hour. The Commonwealth’s minimum wage will continue to increase by $0.75 per hour each year up to $15 per hour in January of 2023. The “tipped” minimum wage similarly increased to $4.35 per hour on January 1, 2020. The “tipped” minimum wage will also increase each year until reaching $6.75 per hour in January of 2023.
Also effective January 1, 2020, the FLSA salary threshold for exempt status moved from $455 to $684 per week (equivalent to $35,568 per year for a full-year worker). The U.S. Department of Labor estimates that 1.2 million additional workers are now entitled to minimum wage and overtime pay as a result of the increase to the standard salary level. The Department has also increased the total annual compensation level for “highly compensated employees (HCE)” from the prior enforced level of $100,000 to $107,432 per year in 2020. Over 100,000 workers will be entitled to overtime pay as a result of the increase to the HCE compensation level.