Two new pieces of legislation have come into effect in Massachusetts since the start of the New Year. They may not be about laws that you have ever heard of, or even realized that you may have already had a vote on, but directly or indirectly they could affect you in some way or another. We will have a look at the two laws listed below in this article.
- New legislation no. 1: Blue Law changes
- New legislation no. 2: Fair Share Amendment to state tax laws
The changes to Massachusetts’ Blue Law
The state’s Blue Law, much amended over time, refers to the rules that affect individual residents and businesses, big and small, on Sundays and public holidays. The Blue Law, in one form or another, has been around for a very long time. In fact, Massachusetts is not the only state with such a law. Many other states have similar laws which date back to the founding fathers who arrived in North America from Europe back in the seventeenth century. The original Blue Law basically forbade any kind of commercial activity on Sunday and religious days, which at that time were what constituted public holidays. In addition, a lot of activity which could only be regarded as personal, such as hunting, fishing, drinking gambling, housework and travel, was originally forbidden. Attendance at church was instead compulsory.
Over time, social and commercial pressures have led to the Blue Law being amended to make allowance for changes in society, which is a far more complex and diverse one than that of the early colony. In fact, the contradictions in the law as they applied to religious faiths other than mainstream Christianity, and therefore observance of Sunday as a day of rest, were some of the reasons why the Blue Law was initially challenged in Massachusetts.
What has changed?
So, what has changed this year? From January 1st, 2023, employers who have been given permission to operate on Sundays and most public holidays no longer have to pay their employees a premium hourly rate, which was the law up to the start of this year. The premium hourly rate was set at a rate higher than the standard hourly rate normally paid for all other days except Sundays and public holidays and may or may not have been the same as the standard overtime rate that applies to all employers employing workers on hourly wages.
The new amendment to the Blue Law does not exempt employers from paying overtime rates. Federal legislation makes it compulsory for employers to pay 50% over the normal hourly rate (time and a half) for any hours worked over 40 in any 7 day period. So, if an employee works on Sunday for 8 hours in addition to a 40 hour normal working week, then he or she should be paid 8 hours at time and a half for the Sunday’s extra work, irrespective of the new legislation.
What remains of the Blue Law?
The Blue Law hasn’t been done away with altogether, despite the various amendments over the years. Employers should ensure they understand how they stand in relation to the Blue Law if they wish to remain open on Sunday or public holidays. The legislation can be confusing, but failure to keep within the law could end up with fines or other penalties, including backpay if there has been a breach of the law. It is advisable to seek clarification concerning exemptions and local rules from an attorney.
Fair share amendment to state tax laws
The Fair Share Amendment is the other new legislation which came into force this year. It is quite likely that you have already voted one way or another for this particular piece of legislation as it was put to the vote as the much publicized and contested “Question 1” in the mid terms last November. The nickname for this amendment is the “millionaire’s tax”, which should give you a good idea of what it is all about.
The Fair Share Amendment increases the percentage of state tax that the very wealthiest of state households will be expected to pay. For tax payers who earn more than $1 million in adjusted federal tax year, they will now be paying 4% more of the additional income to the state over that million dollars in tax compared to everyone else.
To give an example, say person X has a taxable income in 2023 of exactly $1 million. They will then pay exactly the same rate of tax as those who earned less. In fact, Massachusetts is a bit unusual compared to other states which have a state income tax model as there has been a flat rate of tax up to now. Person X will still pay 5% of his or her million dollars of taxable income, which is the same rate (but not the same amount of total tax) as someone earning $50,000.
Now, take person Y who has a taxable income of $2 million in 2023. They will pay the 5% of that 2 million to the state, as well as the newly legislated amount of 4% of everything over the first million, i.e. 4% of $1 million. That is a total of $140,000, $40,000 more than the amount of state tax they might have paid if it hadn’t been for the amendment.
What was the reasoning behind the Fair Share Amendment?
The basic reason for the new legislation was to raise more public funding for state expenditure. The expected increase in state income tax was estimated at around 2 billion dollars, which according to the new amendment can only be used for “public education and affordable public colleges and universities and for the repair and maintenance of roads , bridges and public transportation.” The legislation follows a narrow win for supporters in the November 2022 vote, which registered 51.9% approval.
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