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Legislature Votes to Raise Minimum Wage, Lower Business Costs through Reform

BOSTON – The Mass. Legislature has passed final legislation to increase the minimum wage to $11 per hour by 2017 and lower costs for businesses through an updated unemployment insurance rating table and multi-year rate freeze. Adjusting for inflation, the minimum wage in 1968 would be worth $10.72 today.

“These are two very important issues facing the Commonwealth, and I am proud of the Legislature for taking these steps to support our workers and businesses,” Senate President Therese Murray (D-Plymouth) said. “Increasing the minimum wage will make a real difference in the lives of residents and, by updating our unemployment insurance rating table and introducing a multi-year rate freeze for our businesses, we are providing financial predictability and rewarding companies with positive employment histories. These changes are necessary to create a healthy economic environment where both residents and businesses can succeed.”

“With this vote to increase the minimum wage and to reform our unemployment insurance system, the Legislature has strengthened two important aspects of our state’s social and economic fabric,” House Speaker Robert A. DeLeo (D-Winthrop) said. “By pairing an increase in minimum wage on a non-indexed basis with UI reform we will improve conditions for working families and provide a vehicle for economic growth. I thank Senate President Murray, the conferees and my colleagues in the Legislature for their intelligent and well-considered action on this bill.

“There should be no connection between the words ‘working’ and ‘poor’,” said Senator Stephen M. Brewer (D-Barre), Chair of Senate Ways and Means. “If you work hard for a living, you deserve to be compensated fairly and adequately.”

“This minimum wage increase will not only put more money into the pockets of working families, but will also create jobs and grow our economy,” said Representative Tom Conroy (D-Wayland), Chair of the Joint Committee on Labor & Workforce Development. “No one who works full time should be living in poverty, and today’s vote will help bring an end to this situation. It’s also a significant step toward addressing the rising income divide in our state. I’m grateful for Speaker DeLeo’s leadership in bringing together members of the business and labor communities to craft this bill, and I’m proud that this legislation will make a real, tangible difference for low-wage individuals and working families throughout the Commonwealth.”

“Raising the minimum wage is a victory for working people across this Commonwealth,” said Senator Dan Wolf (D-Harwich), Senate Chair of the Joint Committee on Labor and Workforce Development. “As a matter of fundamental fairness and economic policy, helping hardworking people and stimulating economic growth, restoring the minimum wage is the right thing to do. This is the first bill I’ve helped shepherd through the conference committee, and I’m pleased with this historic outcome.” Regarding the unemployment insurance reform included in the bill, Wolf stated the legislation “provides relief and stability to our business community while protecting the important unemployment insurance benefit to those in need.”

The compromise legislation increases wages for tipped workers to $3.75 per hour by 2017. Current law sets wages at $2.63 for tipped workers. In addition, the minimum wage for agriculture and farming will increase to $8 per hour from $1.60 per hour under this bill.

As part of unemployment insurance reform, the bill expands the experience rating table to allow stable employers to pay lower rates and require negatively rated employees to pay higher rates, from $0.73 per employee to $11.13 per employee. The expanded rating table also sets the taxable wage base at $15,000, an increase of $1,000 to achieve employer savings while ensuring the maintenance of a health UI trust fund.

To further support stable employers in the Commonwealth, the bill also allows the experience rating of employers to be determined by the past three years, instead of the current one-year.

The bill reduces unemployment insurance costs for employers by expanding the seasonal employer exemption to 20 weeks. Under current law, to qualify for certification a seasonal business must be in operation for fewer than 16 weeks or employ workers in one or more functionally distinct job titles for fewer than 16 weeks.

The bill also authorizes the Department of Unemployment Assistance to participate in a federal program that allows the interception of federal tax refunds to recover benefit overpayments.

Business owners will be allowed to collect unemployment benefits if they leave their company but will be required to pay back any money collected if they return to the same company within the same benefit year. Individuals will also be allowed to collect benefits if they quit a second job before they were laid off from their primary job.

The bill also does the following:

  1. Establishes a Council on the Underground Economy to combat the underground economy and employee misclassification;

  2. Prohibits crewmembers on commercial fishing vessels from being denied unemployment benefits if unemployment is the result of federal fisheries management restrictions;

  3. Requires all public contractors to certify they do not owe back Unemployment Insurance payments;

  4. Adds whistleblower protections for employees who testify about their employers’ defrauding the system; and,

  5. Requires the Department of Unemployment Assistance to hold at least one annual public hearing to receive input from employers;

The bill now goes to the Governor for his final approval.


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