The year 2015 will be anything but business as usual for Massachusetts human resource professionals.
Sure, compensation increases will average a predictable 2.9 percent amid a persistently slack labor market. And Massachusetts will continue to keep pace with national projections of an overall average 3 percent increase in pay for American workers.
But the annual HR Practices Report published by Associated Industries of Massachusetts finds that beneath that placid surface lurk new state laws ready to roil the waters for anyone who manages pay and benefits at a Massachusetts company:
- The impending three-year phased increase in the Massachusetts minimum wage from $8 per hour to $11 per hour. The $9-per-hour minimum that takes effect on January 1, 2015, will force some employers to raise entry-level pay rates while also bumping up wages for workers who currently earn slightly more than minimum. Employers face another $1-per-hour increase in the minimum wage in January 2016 and a third in January 2017. The result is that human resource professionals are scrambling to develop multi-year approaches to the minimum wage that will require both actual paid rates and salary ranges to be adjusted.
- Federal health care reform kicks into high gear for employers on January 1, 2015. Employers with 100 or more full-time plus full-time equivalent employees face possible assessments. All employers with 50 or more full-time and full-time equivalent employees must start to collect data to meet the reporting requirements of the Affordable Care Act (ACA). These companies will need systems to track employee hours, health-care eligibility dates, number of full-time employees each month, employee participation in health insurance, and employee contributions to health insurance to meet ACA reporting requirements. Added to these calculations are the establishment and tracking of standard and initial measurement and stability periods. HR professionals will need some combination of new processes, systems, or partnerships to avoid adding staff to comply with these regulations.
- The new Massachusetts paid sick days law approved by voters on November 4, 2014. The measure will force many employers to restructure their paid time-off policies prior to the July 1, 2015, effective date. The specific accrual, usage, and carryover provisions of the law do not mesh well with existing employer policies. Employers will need to develop separate time-off tracking to accrue, deduct, and carry over time pursuant to the new law. Once again, processes, systems, and the assistance of key partners such as their payroll providers will be important to meeting the requirements without adding staff.
- The Massachusetts Wellness Tax Credit. It is available to employers with 200 or fewer employees. Qualifying employers may receive an annual tax credit equal to the lesser of 25 percent of their wellness program investment up to $10,000. Employers must demonstrate that they have taken steps to determine the health needs of their employees and developed a program tailored to address those needs.
That’s a full menu of challenges, especially for small companies that struggle to implement complex laws and regulations. So fasten your seatbelt—it’s going to be an interesting ride.