Grand Bargain: Why is it Grand and What does it Mean?

By now, most of you have probably read about the bill signed into law by Governor Charlie Baker, colloquially referred to as the Grand Bargain. By any measure, this bill is surely “grand” in that it dramatically changes three important areas of employment law.

We’ve worked with countless employers and employees regarding issues similar to those raised below. If you have questions, let us know. At a minimum, all employers should take steps immediately to prepare for this new law.

Paid Family and Medical Leave

Currently, employers are legally required to provide medical leave under the Family and Medical Leave Act (if they have more than 50 employees) or as an accommodation under the Americans with Disabilities Act (but only if the leave is “reasonable”). Both of these types of leaves are unpaid.

The Grand Bargain turns this on its end. Effective January 1, 2021, employers will be required to provide qualifying employees with up to 12 weeks of paid family leave, and up to 20 weeks of paid medical leave for the employee’s own medical condition. Employees caring for covered service members with a serious injury or illness incurred in the line of duty may take up to 26 weeks of paid family leave. The maximum amount of paid leave that can be taken in a benefit year is 26 weeks. Leave can be taken intermittently.

Generally, leave under this act can be taken for the same reasons employees can take leave under the Family and Medical Leave Act. However, unlike the FMLA, this new statute applies to all employers (regardless of size) and all employees (regardless of length of service or hours worked)

After an initial seven-day waiting period, employees taking paid leave will receive 80% of their average weekly wages, up to 50% of the state average weekly wage plus 50% of their weekly wage above the average weekly wage, up to a maximum of $850 per week. Effective July 1, 2019, employers will be required to contribute .63% of each employee’s wages to a Family and Employment Security Trust Fund, which will fund the benefits provided to employees taking leave.

The new law also contains significant anti-retaliation protections by creating a presumption that any negative change in status (benefits, pay, title, duties) during leave or within 6 months of returning from leave is presumptively retaliatory.

Minimum Wage

Effective January 1, 2019, the minimum wage in Massachusetts will increase from $11/hour to $12/hour. The minimum wage will increase .75 cents/hour on each January 1 thereafter until it reaches $15/hour ($6.75/hour for tipped employees). These increases will end on January 1, 2023.

Premium Pay

Currently, nonexempt retail employees must be paid time-and-a-half for hours worked on Sundays and certain holidays. This new act phases that requirement out over a five year period. On January 1, 2019, the premium will be reduced to 1.4 times the regular rate. On January 1, 2020, the premium will be reduced to 1.3 times the regular rate, and so forth until January 1, 2023 when it will be eliminated entirely. However, the new law maintains that employers cannot require employees to work on Sundays or holidays or punish employees for refusing to work on those days.