Without any warning, employers had to weather an unprecedented storm this year in an effort to maintain business operations and keep their doors open. Some did not make it. Although we enter 2021 somewhat optimistically with the commencement of COVID-19 vaccinations, the effects from the pandemic will be felt for years to come.
While 2020 taught us that we cannot predict everything, we wanted to highlight some significant state law changes that are certainly coming to Massachusetts and Connecticut in 2021. Unfortunately, as busy and difficult as 2020 was for employers, challenges will continue into the new year.
Increases to MA Minimum Wage
Raises are scheduled for minimum wage workers in Massachusetts on January 1, 2021. Employers will recall that, as part of the “Grand Bargain Bill” a few years back, the minimum wage will increase $0.75 per hour every year on January 1 until it hits $15.00 per hour on January 1, 2023. Therefore, on January 1, 2021, the minimum wage increases to $13.50.
The minimum wage for tipped workers also increases to $5.55 per hour on January 1, 2021. It will continue to increase until it hits $6.75 per hour on January 1, 2023. Employers should be planning ahead and budgeting for these changes.
Increase to CT Minimum Wage
Connecticut similarly enacted a progressive increase to the state’s minimum wage until it hits $15.00 per hour on June 1, 2023. To that end, on August 1, 2021, the minimum wage increases to $13.00 per hour. Connecticut employers should prepare and budget accordingly.
MA Paid Family and Medical Leave Law
The MA Paid Family and Medical Leave Law (PFML) has finally arrived. Employers began withholding from employees’ paychecks on October 1, 2019, and employees can begin using paid leave benefits on January 1, 2021.
We have posted about this new law many times, including here and here. PFML is a state-offered program—although employers can elect to participate in a private plan that offers the same benefits and protections as the state program—that provides for up to 26 weeks of paid leave to eligible employees for certain qualifying reasons.
On January 1, 2021, employees may be entitled to the following:
- 12 weeks of paid family leave in a benefit year for the birth, adoption or foster care placement of a child, or because of a qualifying exigency arising out of the fact that a family member is on active duty or has been notified of an impending call to active duty in the Armed Forces;
- 20 weeks of paid medical leave in a benefit year if they have a serious health condition that incapacitates them from work;
- 26 weeks of paid family leave in a benefit year to care for a family member who is a covered servicemember undergoing medical treatment or otherwise addressing consequences of a serious health condition relating to the family member’s military service.
On July 1, 2021, employees may be entitled to the following additional leave:
- 12 weeks of paid family leave in a benefit year to care for a family member with a serious health condition.
The PFML law is complicated and it is imperative that employers know how it works. While the statute, regulations and other guidance provide a lot of information, there are still a number of unanswered questions. We are expecting a fair amount of PFML-related litigation given the strong anti-retaliation protections for employees under the new law, but it will likely take years before we see any meaningful court decisions or jury verdicts.
CT Paid Leave Law
If you have not been paying attention to the new paid family leave law in Connecticut, there are some important steps you should take immediately.
Employers should register with the state before January 1, 2021. Since Connecticut employers also have a private plan option, employers should determine if they are going to use the state paid leave plan or a private plan. Finally, employers should contact their payroll providers and start withholding ½ of 1% of each employee paycheck for employee contributions effective January 1, 2021. These contributions are due no later than March 31, 2021 to the state’s Paid Leave Authority, and again at the end of each successive quarter.
Only the payroll withholdings begin on January 1, 2021. The paid leave benefit does not begin until January 1, 2022. Still, it is critical that employers take the steps described above and start educating themselves on this law. It will be here before you know it.
Bottom Line
2021 will be another busy and tough year for employers. There will almost certainly be some hiccups as the new Massachusetts paid family leave benefits hit, especially in light of the continued impact of the COVID-19 pandemic in the new year. Employers should consult with experienced labor and employment counsel for up-to-date guidance.