Massachusetts Releases New Requirements for Calculating Tipped Wages

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By Kelsey Basten

Published on Jan. 24, 2019

As of Jan. 1, 2019, Massachusetts employers with tipped employees are required to calculate tipped wages at the end of each shift. In the past, employers could calculate tipped wages at the end of each pay period. The new law was enacted with the intention to ensure employees receive at least minimum wage during slow shifts, instead of averaging the total of all shifts during a pay period.

Currently, Massachusetts tipped wage is $4.35 (as of Jan. 1, 2019), while the basic minimum wage is $12.00 (as of Jan. 1, 2019). If the total of an employee’s tipped rate plus tips is less than the basic minimum wage, employers are required to pay the difference to employees.

Tipped Wage Increase Schedule

Massachusetts’s tipped wages are scheduled to increase yearly. The rates increase as follows:

• 1, 2019 – $4.35
• 1, 2020 – $4.95
• 1, 2021 – $5.55
• 1, 2022 – $6.15
• 1, 2023 – $6.75

An employer must pay the hourly tipped wage rate to employees if the employee earns more than $20 a month in tips and the hourly tips plus the hourly tipped rate add up to the minimum wage. If the wage rate plus tips do not add up to at least the minimum wage, the employer is required to pay the difference.

This Labor Law News Blog is intended for market awareness only, it is not to be used for legal advice or counsel.