Massachusetts wage, service rate and sick time for restaurants (2026)

If you run a restaurant in Massachusetts, three payroll rules shape your labor costs more than any others: the minimum wage and the lower service rate for tipped staff, earned sick time, and the contributions that fund paid family and medical leave. This guide, checked in October 2026, summarizes each. It is general information and not legal advice. Figures change, so confirm them on the Attorney General's wage pages and the state's family and medical leave department before you rely on them.

What is the Massachusetts minimum wage in 2026?

Payroll and legal-information sites dated 2026 put the state's base minimum wage at $15.00 an hour. They say it has not changed since January 2023 and that no increase is scheduled for 2027. These are secondary sources, so read the Attorney General's minimum wage page for the rate in force on the day you run payroll. Also check whether your city or town sets anything higher.

What is the service rate for tipped employees?

Massachusetts allows a lower direct wage for service employees who receive tips. The same 2026 sources give the service rate as $6.75 an hour, with a maximum tip credit of $8.25, as long as the employee's tips and wages together reach the full minimum wage for each hour worked. The rate covers employees who serve customers and regularly receive more than $20 a month in tips. Payroll guides add that overtime for tipped staff is worked out from the full minimum wage and not from the service rate, so ask your provider how it is set up. Who counts as a service employee and who may share in tips is set by the Tips Act, and the Attorney General's tips advisory, revised in September 2025, explains it. Owners, managers and supervisors may not share in a tip pool or a service charge, so keep clear records of who is in the pool.

How does earned sick time work?

The Earned Sick Time law, M.G.L. c. 149 section 148C, was approved by Massachusetts voters in November 2014. The Attorney General's summary says employees earn one hour of sick time for every 30 hours worked, including part-time, temporary and seasonal workers. If your business has 11 or more employees, workers can earn and use up to 40 hours of paid sick time in a calendar year. If you have fewer, they get the same 40 hours unpaid. The permitted uses include an employee's own illness or injury, routine medical appointments, caring for a child, spouse or parent, and the effects of domestic violence. Ask the Attorney General's Fair Labor Division how it counts headcount for the 11-employee line, and post the state's notice of employee rights.

What is paid family and medical leave, and what do you pay?

Massachusetts Paid Family and Medical Leave is funded by contributions on eligible wages. For 2026, benefits advisers including NFP report a total contribution of 0.88 percent for employers with 25 or more covered individuals and 0.46 percent for smaller employers, unchanged from 2025. Above the 25-person line the employer pays the medical leave share and employees pay the rest, while smaller employers owe no employer share. Advisers differ on whether contractors count toward the 25, so ask the state's Department of Family and Medical Leave how it counts. That department also publishes each year's rates and any change for the next year, including how the employer and employee shares are split, so check its notice before you budget for 2027.

What notices and records must you keep?

Display the state's required posters, including minimum wage, earned sick time and paid family and medical leave, and give new hires the notices the law requires. Ask the Attorney General's Fair Labor Division how long payroll and tip records must be kept and what the Wage Act says about the timing of pay, because late payment is one of the most expensive mistakes a small employer can make. Keep tip records by shift so that you can show who was in the pool and how it was split.

How do these costs change pricing and scheduling?

Higher fixed labor costs mean you should know your break-even covers by shift. Many Massachusetts restaurants have moved to counter service, shorter menus and fewer hours on slow days. If you add a visible charge to cover wages, remember the state's rules on fees: mandatory charges must be shown up front, and a service charge that goes to wait staff has to be distributed under the Tips Act. Talk to an accountant before changing a pricing model.

What should you check this month?

Check the current minimum wage and service rate on the Attorney General's site, confirm your sick time headcount, confirm the paid leave rates for 2027 when the state publishes its notice, and make sure your posters are current. If you use a payroll provider, ask it to confirm that its settings match these rules.

Checking your payroll settings

Ask your payroll provider four questions. Is the service rate applied only to employees who qualify? Does the system compare each service employee's tips and wages with the full minimum wage and flag any shortfall? Is overtime worked out from the full minimum wage? Do managers and supervisors stay out of the tip pool? Then check one pay period by hand. A slow weekday is where a shortfall shows up first, which is why some owners schedule fewer service staff on quiet days, and why a report of earnings per hour by shift is worth running every month.

What to put in your employee handbook

Write down how sick time accrues, how to request it and what notice you expect. State that you will not retaliate against anyone who uses it. Explain your tip pool, name the roles that share in it, and say when tips are paid. Add a paragraph on how to report a pay error, and who will answer. A handbook that is clear on these points prevents most disputes and shows an inspector or an investigator that you take compliance seriously.

More guides for your business:

• Massachusetts happy hour ban: what bars and restaurants can offer instead
• Massachusetts restaurant health inspections and the food protection manager
• Reduce restaurant no-shows in Massachusetts: deposits, holds and disclosure

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