Waged employees must be paid a minimum hourly wage in every state in the U.S. Minimum wage requirements also include minimum rates for tipped employees and establish what employees should be paid if they work overtime.
Minimum wage rates are set by both federal and state governments. Employers must pay the higher of the two rates, federal or state, to stay within legal boundaries.
The federal minimum wage rate in 2023 is $7.25 an hour. The state minimum wage rate for 2023 is $15 an hour in Massachusetts, one of the highest of any state minimum wage rates. Because employers must pay the higher of the two established minimum wage rates, they must pay waged employees a minimum of $15 an hour, even though the federal minimum wage rate is almost half the state minimum.
Tipped employees are treated separately
In some occupations, it is normal for employees to receive tips for the work they do. Typical examples are employees who work in restaurants and bars. For employers who regularly employ employees in these sorts of workplaces, there is a requirement that employers must pay a minimum of $6.75 an hour to their tipped staff, but only if these employees earn a minimum of $15 an hour when their wages and tips are added up together. If they earn fewer tips in any particular week, then the employer must make up the difference to a minimum of $15 for the hours worked that week.
Overtime pay is 50% over the hourly wage rate
In Massachusetts, like most other states, overtime is work that is done over and above 40 hours in any period of 7 days. Overtime rates are set by federal law, at 50% more than the hourly rate. That means that the state’s minimum overtime rate is $22.50 an hour for every hour over 40 in a 7 day period of employment.
Minimum wage rates don’t mean that is what employers have to pay their employees
There is no maximum wage rate in Massachusetts. Just because there is a $15 an hour minimum doesn’t mean that employers are compelled to pay that rate only. They can pay more than the minimum, for instance, if that wage rate helps to make their employment conditions more attractive to good workers than their competitors.
How Massachusetts minimum wage rate compares to other states
Massachusetts minimum wage requirements are some of the highest in the country. Only California, Washington and the District of Columbia have higher minimum wage requirements. Even in nearby New England states, only Connecticut has a wage rate equal to Massachusetts and this only came into force on June 1st this year, while Massachusetts increased its minimum wage rate on January 1st this year.
For comparison, check out these minimum wage rates in other New England states:
- Vermont: $13.18 an hour;
- New Hampshire: $7.25 an hour;
- Maine: $13.80 an hour;
- Connecticut: $15 an hour;
- Rhode Island: $13 an hour.
There are two states in the U.S. that have minimum wage rates less than the federal minimum wage rate. These are Georgia and Wyoming, which are tied at $5.15 an hour, but because of the rule that employers must pay the higher of the state and federal wage rates, employees in these two states must be paid $7.25 an hour as a minimum anyway.
Only California, at $15.50 an hour, Washington, at $15.74 and Washington D.C. at $16.50 an hour, have higher minimum rates than Massachusetts or Connecticut.
In fact, apart from Georgia and Wyoming, 17 other states have minimum wage requirements that just match the federal minimum rate of $7.25 an hour. Just as noteworthy is that not one of these 19 states (including Georgia and Wyoming) has increased its minimum wage rate from last year. It is common practice for most states to raise the minimum hourly wage rate each year more or less in line with the cost of living index. The states that have not increased their rates have done so despite the higher inflation rates of the current period, which has a greater impact on the ability of lower waged employees to manage their finances.
Legislation on minimum wage rates
The main federal law that sets the lower bar for waged labor rates is the Fair Labor Standards Act (FLSA). This is a law that actually came into force back in 1938, signed into federal legislation by President Franklin D. Roosevelt. In 1938, the federal minimum rate was only 25 cents an hour!
In Massachusetts, the Minimum Fair Wage Law is the legislation that establishes and regulates minimum wage rates within the state.
Exceptions to the Massachusetts state’s minimum wage rates
There are exceptions that allow certain employers to pay less than the established minimum pay rates as described above. The following are some of the most common exceptions.
- Agricultural workers can be paid as low as $8 an hour.
- Trainees at hospitals and laboratories can be paid no less than 80% of the minimum rate if the employers obtain a special license from the state Department of Labor and Workplace Development for a certain limited time period.
- Employees with certain disabilities may be paid less than the state minimum if they obtain a license to do so from the Department of Labor and Workplace Development.
- Employers may pay apprentices less than the minimum with a license from the Department of Labor and Workplace Development.
Wage theft and what employees can do if not paid correctly
Wage theft is classified as wages or overtime paid which is less than the legal minimum requirement. Employers who knowingly pay less than the minimum hourly wage rates, fail to pay the correct overtime rates, do not pay wages on time or breach other requirements may be sued by their employees and could be forced to pay back pay or other damages.
If you believe that you are not being paid the correct wages under state law, you should file a complaint with the Fair Labor Division. An employment law attorney can help you understand the state’s employment laws and initiate a lawsuit against your employer if you have proof of wage theft.
For more information, visit our website Mucci Legal or contact us for a free initial legal consultation today.