Effective January 1, 2007, the Massachusetts minimum wage increased from $6.75 per hour to $7.50 per hour. Pursuant to “An Act Increasing the Minimum Wage,” which was passed by the Massachusetts Legislature after a Governor Romney veto in July 2006, a two step increase to the minimum wage is scheduled. In addition to the raise that went into effect in January 2007, a second raise is scheduled for January 1, 2008, when the minimum wage will be increased to $8.00 per hour. Consistent with this change, the Attorney General’s Office has issued a revised Massachusetts Wage & Hour Laws Poster, which contains the revised minimum wage rate. Because Massachusetts law requires that employers post the Wage & Hour Laws Poster in a conspicuous place, employers should obtain a revised Poster from the Attorney General’s Office. The Poster can be obtained by contacting the Massachusetts Attorney General’s Office, Fair Labor and Business Practices Division at (617) 727-3465 or the Attorney General’s website at www.ago.state.ma.us.

Please note that this change also affects tipped employees. Employers can continue to pay tipped employees a minimum cash wage of $2.63 per hour, if the tips received by the tipped employee total at least $4.87 per hour. In general, the $2.63 per hour cash wage, plus the tips received, must equal at least the minimum wage ($7.50 per hour) for each hour the employee works. With regard to overtime pay, the minimum overtime rate payable to a tipped employee for each hour worked in excess of forty hours will now be $6.38 per hour. This amount equals the minimum cash wage ($2.63 per hour) plus the overtime premium rate of one half the minimum wage ($3.75). The minimum overtime rate is exclusive of tips and must be paid directly by the employer.



Please contact a member of our Employment Law Practice if you have any questions regarding this alert.

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