The Grand Bargain Act – What To Expect

Big Changes for MA Employers (and families)

On June 28, 2018, Massachusetts Governor Baker executed this legislation through a law was termed the “Grand Bargain”. With this, Baker aims to increase Massachusetts minimum wage – and service rates for tipped employees – over the next five years, eliminate special pay on holidays and Sundays, and enact mandatory paid family and medical leave. Please see our previous blog about increases in minimum!

 Eliminating Special Pay

Most non-exempt Massachusetts retail employees currently receive time-and-a-half pay for working on some holidays and Sundays. (All of you former-or-current Market Basket employees enjoy(ed) this perk!) For example, if an employee’s regular wage is $11 an hour, their wage on these days is $16.50. Governor Baker’s new law is working to gradually decrease this special rate until January 2023 when the mandatory special pay requirement is eliminated altogether.

Effective January 1, 2019 Sunday/Holiday pay will be 1.4 times the regular pay rate.

Family & Medical Leave Act

Starting officially on January 1, 2021, all private MA employers are required to provide all “covered individuals” with 12 weeks of paid family and medical leave.

A “covered individual” is anyone who:

  • Is a current employee of a MA employer
  • A self-employed individual who elected coverage under the act, OR
  • A former employee that has not been separated from employment for more than 26 weeks at the start of paid leave.

Family & medical leave eligible circumstances include:

  • Providing care for a family member with a serious health condition
  • Maternity/paternity leave for parents to bond with their child during the first 12 months after the child’s birth, OR
  • During the first 12 months after placement of the child for adoption or foster care
  • Attending obligations brought on by a family member on active duty or notified of an impending call to duty in the US armed forces.

A “covered individual” may also be eligible to receive up to 20 weeks of medical leave in a benefit year to attend to their own significant medical needs. Note: an individual will be granted no more than 26 weeks total of family and medical leave in the same benefit year.

Starting July 1, 2019 Leave Benefits to be Financed by Payroll Deduction

On July 1, 2018, MA employers are required to:

  • Begin making contributions to the Family & Employment Security Trust Fund
  • Notify employees of their rights under the Act.

 This new act includes the creation of the Department of Family & Medical Leave (DFML) to oversee and administer the program. Details of the program:

  • Paid for by mandatory 0.63% payroll tax contribution, or an adjusted amount determined by the DFML and submitted to a trust fund.
  • Employers may require employees to pay a portion of these contributions
  • Employers with fewer than 25 employees are exempt from paying the employer contributions
  • The program will replace a worker’s pay with a weekly benefit cap of $850, or rate equal to 64% of state average weekly wage.

For more information on specifics of Parental & Medical leave act, please visit https://goo.gl/KUzWi6 .

What Can You Do To Prepare?

The “Grand Bargain” Act presents major changes for MA employers AND employees, but most of the changes are not effective until July 1, 2019, giving employers ample time to prepare.

In the meantime, Ritz Payroll is happy to answer any questions, address concerns, guide you through the process, or direct you to our trusted partners.

 

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