Massachusetts publishes the state average weekly wage (SAWW) each year on October 1. The SAWW is important because it governs the benefits that are paid to eligible employees or individuals under the unemployment insurance law, workers compensation law, and Massachusetts paid family and medical leave law. The state average weekly wage is calculated every year by the director of the Department of Unemployment Assistance (DUA).

Calculating the SAWW

To calculate the SAWW the DUA director determines the total wages reported on unemployment insurance (UI) contribution forms during the 12-month period ending on March 31 of the same year. That total is divided by the average number of monthly UI-insured employees for the twelve months ending March 31. That is the average annual wage. The average annual wage is then divided by 52 to establish the state average weekly wage. That number is rounded to the nearest cent. (MGL ch 151A, §29(a))

The DUA has determined that the SAWW will be $1,796.72 in 2024, up 1.7 percent from $1765.34 in 2023. The size of the increase is surprising as the SAWW typically outpaces inflation (the formula only counts those employees who are insured for unemployment purposes meaning that some nonprofit and governmental employees who are covered under reimbursable arrangements are not counted. Since many of them have historically lower wages, their removal from the calculation tends to exaggerate the increase in the value of the SAWW.)

Impact

At least three significant state benefits are linked to the SAWW.

Workers Compensation maximum benefit = 100% of the SAWW.  ($1,796.72) (effective October 1, 2023)

Unemployment Insurance maximum benefit = 57 ½% of the SAWW. ($1,033.00) (effective October 1, 2023)

Paid Family and Medical Leave maximum benefit = 64% of the SAWW. ($1,144.90) (effective January 1, 2024)

The actual benefit an employee or individual may receive will be based upon several factors including total earnings prior to filing a claim, duration of employment, and other specific factors required by that agency in determining benefits.

Paid family and medical leave

While worker’s compensation and unemployment insurance charges for employers are based upon each individual company’s experience rating, (i.e. frequency and severity of workplace injuries or frequency and duration of layoffs associated with that company) the charges for paid family and medical leave are distributed across all covered employers in the state program.

After two years of declining contribution rates, the Department of Family and Medical Leave announced that the assessment rate is going to increase from 0.63% to 0.88% of eligible wages up to the Social Security taxable maximum for employers with 25 or more covered individuals. The current projection from the Social Security Administration is that the taxable wage base will increase from $160,200 in 2023 to $167,700 in 2024, though that number could change when finalized.

The PFML contribution rate for smaller employers – fewer than 25 covered individuals – increased from 0.318% to 0.46%.

Employers with 25 or More Covered Individuals: The 0.88% contribution rate includes a medical leave contribution rate of 0.70% and family leave contribution of 0.18% of an individual’s eligible wages.

Employers with Fewer than 25 Covered Individuals: The 0.46% contribution rate is split between medical leave contribution of 0.28% and family leave contribution of 0.18%.

There is more detailed information on the DFML rate calculation available here.

AIM members with questions about this or other human-resources issues or interested in a detailed review of payroll practices may contact our the AIM Helpline at 1-800-470-6277.