The pending proposals include a ban on noncompete agreements and a boost to the minimum wage.
Employers with workers in Massachusetts should closely watch the upcoming close of the Massachusetts legislature’s current session. With the session set to close on July 31, 2014, state House and Senate committees have been working through proposals, including a ban on noncompete agreements and an increase to the commonwealth’s minimum wage.
In April, Massachusetts Governor Deval Patrick proposed legislation that would ban employers from entering into noncompete agreements with employees. Proponents of the noncompete ban, led by the New England Venture Capital Association, view the agreements as a hindrance to the free flow of talent and ideas. Those in favor of retaining noncompetes consider the agreements necessary to protect intellectual property and prevent trade secret dissemination. Governor Patrick’s bill was sent to the Committee on Economic Development and Emerging Technologies, where it was reported out of committee as a new bill. On June 11, the Massachusetts House of Representatives approved economic development legislation that incorporates job skills training and economic growth initiatives, but notably excludes Governor Patrick’s proposed ban on noncompete agreements. The House bill was referred to the Senate Committee on Ways and Means on June 16. Although it is uncertain at this time what the Senate version will encompass, the noncompete question may be tackled in separate legislation.
Shortly after the House unveiled its economic development legislation, the Massachusetts Senate voted to pass legislation filed by a conference committee to increase the current minimum wage of $8.00 per hour by $3.00 over the next three years. The bill would raise the minimum wage to $9.00 per hour on January 1, 2015; $10.00 per hour on January 1, 2016; and $11.00 per hour on January 1, 2017. This signifies a compromise between the Senate’s prior bill, which sought an $11.00 per hour minimum wage indexed to inflation, and the House bill, which aimed to increase the minimum wage to $10.50 over the next two years. The Massachusetts House is expected to approve the bill this week, and the governor has indicated that he supports a minimum wage increase. If passed, Massachusetts would become the state with the highest minimum wage in the United States in 2017.
We will continue to monitor the legislation sessions and provide updates. After the end of July, when formal sessions close, moving a bill forward becomes more difficult because any member of the legislature can object to a bill on the floor.