Workers on the low end of the earning spectrum saw another increase on New Year’s Day as Massachusetts continues its slow march towards a $15 an hour minimum wage in 2023.

The new hourly rate of $12.75 took effect on Jan. 1 after increasing from $11 to $12 one year ago. The incremental increase is part of the state legislature’s “grand bargain” bill that was approved in 2018.

A five-step plan to raise wages

This month’s increase is the second of five planned increases to the Massachusetts minimum wage, which will eventually more than double the federal minimum wage of $7.25 an hour. The legislature approved the following hikes:

  • 2019: $12
  • 2020: $12.75
  • 2021: $13.50
  • 2022: $14.25
  • 2023: $15

Tipped workers also see an increase

Workers who earn the majority of their pay through tips also saw a rise in their base hourly pay on Jan. 1 to $4.95 an hour. Tipped workers are not exempt from the minimum wage, although their base is considerably lower than others. Under the “grand bargain,” increases look like this:

  • 2019: $4.35 (raised from $3.75)
  • 2020: $4.95
  • 2021: $5.55
  • 2022: $6.15
  • 2023: $6.75

Retail workers see reduced Sunday and holiday pay

While most workers see an increase in wages, lawmakers compromised with employers in the retail industry by agreeing to phase out the state’s time-and-a-half requirements for retail employees who work on Sundays and some holidays.

Last year, that rate was lowered to 1.4 times the hourly rate while this year, it is trimmed to 1.3 times the hourly wage until it completely disappears in 2023. However, the law does not impact those who work on national holidays, such as Christmas or Thanksgiving. The three affected are Labor Day, July 4 and Memorial Day, while the phase-out will eventually apply to Veterans Day, Columbus Day and New Year’s Day.

State reminds employers of changes

The Massachusetts Attorney General’s office sent out a notice at the end of December to all employers reminding them of the impending change in minimum wage requirements. Anyone who believes they are not being paid according to the law should contact an experienced employment law attorney.