The following wage and hour changes will take effect on January 1, 2023.
Massachusetts increases minimum wage and ends premium pay
The Massachusetts minimum wage will increase to $15 per hour. The minimum base wage for tipped employees will increase to $6.75 per hour.
Premium pay fully phased out
The mandatory premium pay rate for hours worked on Sundays and certain holidays, which only applied to retailers and was down to 1.1 times an employee’s regular rate of pay in 2022, will be eliminated. All employers, of course, will still need to pay nonexempt employees 1.5 times their regular rate for all overtime hours (i.e., hours over 40 hours in a workweek).
Federal contractor minimum wage increases
Beginning on January 1, 2023, the minimum wage for work performed on or in connection with federal contracts will increase as follows:
- For contracts covered by Executive Order 13658: the minimum wage will increase to $12.15 per hour and the minimum base wage for tipped employees will increase to $8.50 per hour.
- For contracts covered by Executive Order 14026: the minimum wage will increase to $16.20 per hour and the minimum base wage for tipped employees will increase to $13.75 per hour.
The Department of Labor has published helpful FAQs on Executive Order 13658 and Executive Order 14026. A side-by-side comparison of these executive orders, including the contracts covered by each, can be found here (though this document hasn’t been updated for 2023).