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Hikes in the Minimum Wage May Soon Become Reality

Heads up, employers.

Susan G. Fentin

Susan G. Fentin

The Massachusetts Legislature is still in session, and you never know what surprises they have in store for you on Beacon Hill.  In a recent issue of BusinessWest, we told you about an initiative to require some Massachusetts employers to provide paid sick leave to their employees. We’ve been told that bill has recently been buried and is unlikely to see passage in this legislative session. But there are other opportunities for the Legislature to wreak havoc with employers in the Bay State, and even if these initiatives are not successful during this session, they will likely be brought forward in the near future.
A bill has been filed by state Sen. Marc Pacheco that would raise Massachusetts minimum wage to $10 per hour over the course of the next three years. The bill cleared a legislative committee in March, creating the possibility that the Senate could vote on what would be the first hike in the state’s minimum wage in four years. Currently, the minimum wage in Massachusetts is $8 per hour, raised from $7.50 per hour in the 2007 legislative session.  This rate is substantially higher than the current federal rate of $7.25 per hour, which was last increased in 2009.
Massachusetts law provides that the state’s minimum wage will always stay ahead of the federal rate, although not necessarily by 75 cents (the Commonwealth’s statute governing the minimum wage provides that the state’s minimum-wage rate automatically increases if the federal rate matches the current Massachusetts rate, with the result that Massachusetts’ minimum wage will always be at least 10 cents higher than the current federal rate). But, if passed, the current legislation would go way beyond that standard and give Massachusetts the highest minimum wage in the country, surpassing the current high mark of $9.04 in Washington state.
Massachusetts is not alone in this effort. State legislatures in neighboring New York and Connecticut, as well as New Jersey and Illinois, are also pushing efforts to raise their minimum wages. Missouri voters may be asked to vote on an increase in the minimum wage in a referendum in November.
Legislators in these states are arguing that $7.25 per hour doesn’t provide a living wage. There may be some merit to that argument: a full-time worker, working 40 hours a week, 52 weeks a year, paid at the federal minimum wage would earn only $15,080 per year, lower than the federal poverty line for a family of two and less than 75% of the federal poverty line for a family of four.
These state initiatives are spurring some discussion at the federal level about whether the time is ripe for another increase in the federal minimum wage. Although the federal rate went up in 2009, that was the last year of a multi-year, phased-in increase that began in 2006. Sen. Tom Harkin of Iowa, head of the Senate Labor Committee, is trying to rally support for a bill that would increase the federal minimum wage to $9.80 per hour by 2014. So even if the current Massachusetts initiative doesn’t succeed, there’s the possibility that the Commonwealth’s minimum wage will float up along with the federal rate, at 10 cents per hour above whatever Congress establishes at the federal level.
Pacheco doesn’t believe that the minimum wage bill will be successful this year, but in comments published in the Patriot Ledger, the senator noted that the bill has strong support from the AFL-CIO, and he expects that support for the bill from other legislators would take a couple of years to build. So employers can certainly expect that, whether from the state Legislature or from Congress, there may be future attempts to increase the minimum wage.

More Wage-and-hour News
The U.S. Department of Labor has announced that that its investigations into the restaurant industry in Massachusetts have uncovered $1,307,808 in back wages owed by a number of Massachusetts restaurants to 478 employees. The DOL is currently calculating what level of penalty might also be assessed against these restaurants, which had multiple wage-and-hour violations, including paying their wait staff a flat rate, failing to pay or properly calculate overtime, making illegal deductions from employees’ paychecks, and failing to keep proper records of their employees’ wages.
The department has developed a smartphone application to help employees independently track the hours they work and determine the wages they are owed. The app, which is available in English and Spanish, helps users track their regular work hours, break time, and any overtime hours.
This announcement from the DOL underscores the fact that the federal government is serious about investigating wage-and-hour violations wherever they might occur.

Susan G. Fentin is a partner in the law firm Skoler, Abbott & Presser, P.C., which practices only labor and employment law and represents the interests of employers exclusively; (413) 737-4753; [email protected]

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