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New Minimum Wage Rate for Massachusetts Employees Effective January 1, 2020

January 6, 2020 Leave a comment

AET Headshot Photo 2019 (M1344539xB1386)By: Amanda Thibodeau

With the new year comes a new minimum wage rate for Massachusetts non-exempt employees.  As of January 1, 2020 the minimum wage rate is now $12.75 per hour, and $4.95 per hour for tipped employees.  Employers with Massachusetts-based non-exempt employees should update their payroll provider to reflect the increase – and be sure to use the new rate when calculating any earned overtime.

The change comes from a 2018 bill signed by Governor Baker that gradually increases the minimum wage rate until it reaches $15.00 per hour in 2023 ($6.75 per hour for tipped employees).

For more information, please contact Matthew Mitchell or Amanda Thibodeau.

Federal Judge Temporarily Blocks New Overtime Rule From Taking Effect On December 1

November 23, 2016 Leave a comment

2015-01-05_8-57-41By: Scott J. Connolly and Sandra E. Kahn

On November 22, a federal judge in Texas issued a preliminary order that temporarily blocks the U.S. Department of Labor (DOL) from implementing changes to the salary basis for white collar overtime exemptions.  The new salary rule, which was to become effective on December 1, 2016 would have required employers to increase exempt employees’ minimum salary from $23,660 to $47,476.  The preliminary court order blocking the rule appears to apply to all public and private employers nationwide.SJC Headshot Photo 2015 (M0846523xB1386)

Find out how the judge’s order will affect the new salary rule, which was to become effective on December 1. Read this month’s Employment Law Alert.

Are You Ready to Reclassify? New Overtime Regulations Go Into Effect on December 1, 2016

October 5, 2016 Leave a comment

By: Sandra E. Kahn

2015-01-05_8-57-41On December 1, 2016, any employees who earn less than $47,476 annually will be entitled to overtime and must be treated as non-exempt, as per the U.S. Department of Labor’s final rule (“Final Rule”).
Don’t wait any longer to address this critical change in the law.
Find out how the Final Rule will affect your current employee classifications and pay practices, and the consequences of not complying with the law.

Read this month’s Employment Law Alert.

New Overtime Regulations Will Result In Many More Workers Becoming Entitled To Overtime

May 18, 2016 Leave a comment

By, Sandra E. Kahn

On May 18, 2016, President Obama announced the publication of the U.S. Department of 2015-01-05_8-57-41
Labor’s final rule (“Final Rule”) updating the overtime regulations, and providing that employees who earn less than $47,476 annually will be entitled to overtime.

The federal Fair Labor Standards Act (“FLSA”) “white collar” exemptions are familiar to most employers. Under the FLSA, employees must be paid the minimum amount required by the statute on a salary basis, and the employee’s job duties must primarily involve executive, administrative, or professional duties. The Final Rule changes only the salary basis test, leaving in place the existing duties test.

For more details, read our full alert and visit our Employment Law Group page.

Employers Cannot Pay Employees With Stock or Equity In Lieu of Cash

September 30, 2015 Leave a comment

MBBP's Wage & Hour Tip of the MonthA company with a bright future but a temporary cash shortage might be tempted to compensate employees with an ownership interest in the company (stock or equity) instead of with cash.

But, is this practice legal? Generally, the answer to this question is no. Under state and federal law, employees must be paid at least the minimum wage in cash. Providing equity, no matter how much the equity is worth, does not fulfill this requirement.

An exception to this rule is made, however, if the employee comes within the exemption for executive-business owners provided for in the federal Fair Labor Standards Act (“FLSA”). An individual who comes within this exemption is exempt from the FLSA’s minimum wage and overtime requirements.

To be exempt as an executive-business owner under the FLSA, an individual must (1) be employed in a bona fide executive capacity, (2) own at least a 20% bona fide interest in the business and (3) be actively engaged in the management of the business.

Unless an employee meets each of these requirements, paying in equity alone will run afoul of wage laws, and could result in significant liability for the employer, as well as possible individual liability for the president, treasurer, and individual “officers and agents” of the employer’s corporate entity.

For further help in determining whether your employee comes within the executive-business owner exemption or questions about paying employees with equity, contact a member of our Employment Law Group.

Paid Sick Leave Law Creates New Employer Obligations for Intermittent, Temporary and Seasonal Workers, Including Interns

July 7, 2015 Leave a comment

MBBP's Wage & Hour Tip of the MonthEmployers who use temporary or seasonal employees including summer interns should already be aware of the importance of ensuring that those employees are paid in compliance with federal and state law. Massachusetts employers should also be aware that the new Massachusetts Earned Sick Leave Law (the “Law”) has created additional wage and hour obligations for some temporary and seasonal workers, including summer interns. (Generally, the Law requires that employers with more than 11 employees offer both full and part-time employees paid sick time; employees with fewer than 11 employees are required to offer unpaid sick time).

The Massachusetts Attorney General’s regulations addressing the Law include a provision which entitles temporary and seasonal employees like interns who work intermittently for an employer (e.g., work for the same employer for multiple summers) to sick time. The result of these regulations is that employers covered by the Law now need to track the accrual of sick time for temporary and seasonal workers, and permit those employees to take sick time once they have worked for the employer for more than 90 days.

Under the regulations, an employee with a break in service of fewer than four months will maintain the right to use any unused earned sick time accrued before the break in service. If the employee has a break in service of between four and 12 months, the employee will maintain the right to use earned sick time accrued before the break in service, but only if the employee’s unused bank of earned sick time equals or exceeds 10 hours. Employees with a break in service of greater than 12 months will not retain any accrued sick time.

Although temporary or seasonal employees are subject to the Law’s provision that employees are only entitled to use accrued sick time 90 days after the employee’s first day of work, employees with a break in service of fewer than twelve months will maintain vesting days from the employer and will not need to restart the 90-day vesting period upon their return to the employer before they can use earned sick time.

For example, an intern who works full time for an employer from June until August will likely have accrued more than 10 hours of sick time. If that intern returns to the employer the following June, he or she will (upon working 90 total days for the employer, including days worked before the break in service) be entitled to use that accrued sick time.

For more information on the use of temporary or seasonal employees including interns or the accrual of paid sick time, please contact a member of the Employment Law Group.

Tip of the Month: Implement a Payroll Deductions Policy to Take Advantage of the FLSA “Safe Harbor”

April 13, 2015 Leave a comment

Last month’s Tip of the Month reminded employers that communicating and maintaining an overtime policy can minimize liability for unauthorized overtime hours. This month, we focus on a second way employers can protect against wage and hour liability: the inclusion of a payroll deductions policy to take advantage of the “safe harbor” protection against liability for misclassification of employees based on the failure to pay employees on a salary basis.

As you recall, to be exempt from overtime, an employee must be performing duties recognized as exempt under the Fair Labor Standards Act (“FLSA”) and must be paid on a “salary basis.” To be paid on a “salary basis” the employee must receive a predetermined amount of compensation each pay period (at least $455/week) which cannot be reduced due to variations in the quality or quantity of the employee’s work. An exempt employee must receive the full salary for any week in which the employee performs any work, subject only to certain limited deductions.

Employers jeopardize employees’ exempt status by making improper deductions from salaries. A payroll deductions policy which meets certain requirements provides employers with the opportunity to reduce overtime liability which might otherwise accrue under the FLSA if improper deductions are made and employees are therefore found to be inappropriately treated as exempt.

A payroll deduction policy only provides a safe harbor if the employer: (1) has a “clearly communicated” policy prohibiting improper deductions, including a complaint mechanism; (2) reimburses employees for any improper deductions; and (3) makes a good faith commitment to comply in the future. The safe harbor is not effective where the employer willfully violates the policy by continuing to make improper deductions after receiving employee complaints.

A good payroll deduction policy should include an explanation of how exempt employees will be paid on a salary basis, with only limited deductions for certain reasons permitted by law, including for social security, taxes, participation in company-sponsored benefit and retirement plans, absence from work for one or more full days taken in compliance with the company’s sickness or disability policy, absence from work which is covered by the Family and Medical Leave Act, absence due to certain types of suspensions, and full or partial days not worked during the initial or terminal week of employment.

For more information on implementing or reviewing a payroll deductions policy, contact a member of the Employment Group.

Employers Should Maintain and Enforce Overtime Policies

March 25, 2015 Leave a comment

Both Federal and Massachusetts law require that employers pay their non-exempt employees overtime wages whenever employees work more than 40 hours in a workweek. The law requires that employers pay overtime when they knew or should have known that the employee worked more than 40 hours. As a result, employers can be liable for overtime hours which they did not specifically authorize. Employers can minimize this liability by establishing an overtime policy and a mechanism for requesting and reporting overtime.

Overtime policies should include: who is eligible for overtime; what, if any conditions apply to the authorization of overtime; a specific mechanism for employees to request authorization to work overtime; and a specific mechanism for employees to report overtime hours which have been worked. Any policy should be clearly and conspicuously communicated to employees, and consistently enforced. Managers should not, under any circumstances, instruct employees to falsely record time or avoid reporting overtime hours worked.

Maintaining an overtime policy will not only result in transparent workplace expectations but it could also help an employer defend against an expensive wage and hour claim. In Vitali v. Reit Management and Research, LLC, SUCV2012-00588-BLS1 (Mass Super. June 2, 2014), a Massachusetts employee claimed she had worked through her lunch regularly and as a result often worked more than 40 hours in a workweek, entitling her to overtime. However, her employer had an overtime policy in place which required advanced approval for working overtime, as well as mechanisms for reporting overtime hours, which the employee had not followed despite her familiarity with the policy. The employee presented no evidence that management knew that the employee was working through lunch. Because the employer had clearly communicated rules and policies in place, and because the employee had failed to follow them, the employee was not able to maintain her claim for unpaid wages and the employer escaped a potentially expensive claim.

For more information on overtime policies, please contact a member of our Employment Law Group.

Employers Face Wage & Hour Risks When Terminating Employees

September 5, 2014 Leave a comment

This summer, the family-owned grocery store chain Market Basket has been engaged in a contentious and public dispute over ownership and control of the chain. As a result, thousands of jobs have hung in the balance. In a joint letter, the Attorneys General of Massachusetts and New Hampshire recently used the dispute to remind Market Basket of its legal obligations to employees. The joint letter applies to employers generally, and provides a helpful synopsis of some of the obligations and risks involved in employee terminations.

For further information or questions about employee terminations, contact a member of our Employment Law Group.

Massachusetts’ Minimum Wage Set to Increase

July 23, 2014 Leave a comment

The minimum wage in Massachusetts is set to increase on January 1, 2015 for the first time since 2008.  On June 26, 2014, Governor Deval Patrick signed a bill into law which will raise the hourly minimum wage for non-tipped employees from $8.00 an hour as follows:

  • Beginning January 1, 2015, to $9.00.
  • Beginning January 1, 2016, to $10.00.
  • Beginning January 1, 2017, to $11.00.

The hourly minimum cash wage for tipped workers will increase from $2.63 to $3.00 an hour on January 1, 2015, and again to $3.75 an hour on January 1, 2017.  As a result of these increases, Massachusetts’ minimum wage will be amongst the highest in the country.

Compliance with Massachusetts’ minimum wage laws is important since the failure to do so will result in a violation of the Massachusetts “Payment of Wages” statute, M.G.L. c.149, §148 (the “Wage Act”).  Violations of the Wage Act carry a high price and are subject to mandatory treble (triple) damages and attorney’s fees, even if an employer has acted in good faith.  Wage Act violations can also result in criminal penalties and civil liability for the employer as well for as the president, treasurer, and individual “officers and agents” of the employer.

For more information on the Massachusetts minimum wage increase or wage and hour compliance generally, contact a member of the Employment Law Group.

Will Your Interns Sue You for Unpaid Wages?

April 8, 2014 Leave a comment

The end of last summer’s internship season was marked by a wave of class-action lawsuits filed by interns against entertainment, sports, and publishing companies. The interns sued for unpaid wages and overtime claiming that they in reality were employees of these companies. These much publicized lawsuits, including those against Condé Nast Publications, Fox Searchlight Pictures, Inc., Hearst Corporation, and Sean “Diddy” Combs’s Bad Boy Entertainment, led many businesses to end their internship programs altogether. Here is what you must know before allowing an unpaid intern to “work” for your for-profit business.

An intern for a for-profit business must be paid unless the internship meets the requirements of the narrow “learner/trainee” exemption under the federal Fair Labor Standards Act (“FLSA”), the law governing payment of minimum wages and overtime. Failure to meet this narrow exemption could result in costly litigation and possibly significant liability; some of the businesses recently sued have had thousands of interns in the purported “class” of plaintiffs.

The U.S. Department of Labor (the “DOL”) applies a six-criteria test to unpaid interns at private-sector, for-profit businesses to determine whether the “learner/trainee” exemption is met. The DOL’s six criteria are:

  1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
  2. The internship experience is for the benefit of the intern;
  3. The intern does not displace regular employees, but works under close supervision of existing staff;
  4. The employer that provides the training derives no immediate advantage from the activities of the intern, and on occasion its operations may actually be impeded;
  5. The intern is not necessarily entitled to a job at the conclusion of the internship; and
  6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

This test may be hard for a for-profit business to pass if it receives an advantage from the services of the intern, for example if the intern performs low-level administrative and clerical tasks. Although most courts have applied a more flexible test, a number of courts have deferred to the DOL’s more stringent test, which in turn has prompted the wave of recent lawsuits. To avoid claims, companies in doubt about whether they will pass the DOL’s test should pay their interns at least minimum wage (and overtime unless they restrict interns from “working” for more than 40 hours per week) and keep accurate records of the interns’ time “worked.”

For more information on this topic, and other information about having an internship program, please contact a member of the Employment Practice Group.

Are Your Commissioned Sales Employees Entitled to Minimum Wage and Overtime?

March 31, 2014 Leave a comment

Many employers use commission payments to increase the productivity of their sales force.  Commissioned sales people can earn significant compensation.  But, are commissioned sales people also entitled to minimum wage and overtime?

The federal Fair Labor Standards Act(FLSA) establishes a minimum wage and requires that employers pay overtime, or 1.5 times the employee’s regular rate of pay, to employees who work more than 40 hours in a workweek.  The FLSA’s minimum wage and overtime requirements apply to all employees, including commissioned employees, unless the employee comes within one of the statutory exemptions to the FLSA.

Many commissioned sales employees come within one of two statutory exemptions to the FLSA, the “outside sales exemption” or the “inside/retail sales exemption.”  An employee is exempt under the outside sales exemption if the employee’s primary duty is making sales or obtaining orders or contracts for services or the use of facilities from paying clients or customers, and the employee is customarily and regularly engaged away from the employer’s place of business.  Qualified outside sales people are exempt from both minimum wage and overtime requirements.

Commissioned sales people employed by a retail or service establishment are exempt from overtime (but not minimum wage) under the inside/retail sales exemption if (1) the employee’s regular rate of pay (including commissions) exceeds one and one-half times minimum wage and (2) more than half the employee’s total earnings are in the form of commissions.

If a commissioned sales employee does not come within one of these two narrowly defined exemptions (sales people will usuallynotqualify for other FLSA exemptions) the sales employee is not exempt and is entitled to overtime on top of commissions.

For help determining whether your sales force is exempt, or for more information on this topic, please contact a member of our Employment Law Group.

Can you deduct from an Employee’s Pay for a Snow Day?

February 6, 2014 Leave a comment

This winter’s polar vortex and its seemingly unending supply of snow and cold raise the question of how to pay exempt and non-exempt employees when an office closes due to inclement weather, and whether deductions from pay for those closures are permitted.

Can you deduct when the office is closed due to weather?

When an employer is forced to close its business for a full day due to weather conditions, the federal Fair Labor Standards Act (“FLSA”) does not require that the employer pay non-exempt employees for that day, even if they were scheduled to work, since the employees are unable to provide any work for that day.

The employer may not, however, take a deduction from an exempt employee’s salary for an inclement weather closure without risking the loss of the employee’s exempt status. (N.B., though, that if the closure lasts for one week or more, then the employer does not need to pay the exempt employees for that week).

Can you deduct when the office is partially closed due to weather?

Although federal law does not require that employers pay non-exempt workers during a partial closure, in some circumstances Massachusetts law may. If a Massachusetts non-exempt employee reports to work but there is no work to be performed, or there is less work than the employee was scheduled to perform, the employee is entitled to “reporting pay” of at least three hours pay at the minimum wage. For example, if the office is closed but an employee wasn’t aware of the closure and reports to work, or if the office closes early because of inclement weather, then a Massachusetts non-exempt employee is entitled to reporting pay.

If the employer’s office is closed for only part of the day due to inclement weather, the employer cannot make a deduction from an exempt employee’s salary without losing the employee’s exemption.

Can you deduct when the office is open but the employee is absent due to weather?

The rules shift slightly when the employer remains open for business but an exempt employee is unable to make it into work due to inclement weather.

Nothing changes in this situation for a non-exempt employee; a non-exempt employee does not need be paid for hours not worked, and so an employer may make a deduction for a weather-related absence.

However, the usual rule that an employer cannot deduct from an exempt employee’s wages without risking the loss of the employee’s exemption changes in this situation. The U.S. Department of Labor (“DOL”) has advised that when an office is open, but an exempt employee is absent due to inclement weather, the Department of Labor will treat the absence as one for “personal reasons” and the employer may deduct that day’s wages from the employee’s salary without losing the employee’s exemption.

Note, however, that this loophole only applies if the exempt employee takes the entire day off for weather-related reasons. An exempt employee who chooses to leave an hour or two early to get a jump on weather-related traffic should not have a deduction taken – to do so would risk the loss of the exemption.

For more information on how to pay exempt and non-exempt employees when an office closes due to inclement weather, please contact a member of the Employment Law Group.

Where and For How Long Should Employers Keep Wage Records?

November 20, 2013 Leave a comment

October’s Tip of the Month discussed the obligation employers have under the federal regulations interpreting the Fair Labor Standards Act (FLSA) and under Massachusetts law to keep and retain certain time and wage records. This month we address: where should employers keep those records, and for how long must the records be retained?

Where? Employers should keep time and wage records at the employee’s place of employment or in the employer’s central records office. Wherever they are kept, though, the records must be available for inspection by the U.S. Department of Labor’s Wage and Hour Division.

How Long? Under federal law, employers are required to maintain payroll records and records of any collective bargaining agreements for three years. Employers are required to maintain records which are related to wage computations, including time cards, wage rate tables, work schedules, time records, and records of additions or deductions from wages for two years. Keep in mind, though, that the FLSA has a three year statute of limitations for willful violations and that, as a result, wage computation records should be kept for federal purposes for at least three years.

Moreover, Massachusetts law, specifically M.G.L. c.151A, §45 and 430 CMR §5.01(1), requires employers to keep work records including payroll records, worksheets and any record which the employer uses to prepare submissions to the Massachusetts Department of Unemployment Assistance, for four years.

M.G.L. c. 151, §15 and M.G.L. c. 149, §52 impose a separate obligation to retain payroll records for at least two years. However, employers who comply with the federal requirements and M.G.L. c.151A, §45 and 430 CMR §5.01(1)’s longer four year retention requirement will have complied with the two year requirement.

For more information on recordkeeping requirements or the prevention of wage and hour lawsuits, please contact a member of the Employment Law Group.

Employee Recordkeeping Requirements Under Federal and Massachusetts Wage Laws: Which Records Should Employers Keep?

October 3, 2013 Leave a comment

Employers have an obligation under the federal regulations interpreting the Fair Labor Standards Act (FLSA) and separately under Massachusetts law to keep and retain certain time and wage records.

Keeping complete and accurate time and wage records is not just a legal requirement– it is also a good business practice. In a lawsuit for unpaid wages or overtime, the burden of proving when and for how long an employee worked is placed on the employer. An employer who has kept thorough and accurate time and wage records will be better equipped to defend against a wage and hour lawsuit.

For each non-exempt employee, federal regulations require that employers retain at least the following records:

  1. Employee’s full name and social security number.
  2. Address, including zip code.
  3. Birth date, if younger than 19.
  4. Sex and occupation.
  5. Time and day of week when employee’s workweek begins.
  6. Hours worked each day.
  7. Total hours worked each workweek.
  8. Basis on which employee’s wages are paid (e.g., “$9 per hour,” “$440 a week,” “piecework”).
  9. Regular hourly pay rate.
  10. Total daily or weekly straight-time earnings.
  11. Total overtime earnings for the workweek.
  12. All additions to or deductions from the employee’s wages.
  13. Total wages paid each pay period.
  14. Date of payment and the pay period covered by the payment.

For each exempt employee, federal regulations require that employers retain at least the records listed above, except those listed in numbers 6 through 10 and a description of the basis on which wages are paid, e.g. the dollar amount of earnings per month, per week, per month plus commissions, benefits, etc.

For more information on recordkeeping requirements or the prevention of wage and hour lawsuits, please contact a member of the Employment Law Group.

Extra Payments Do Not Jeopardize an Employee’s Status as “Paid on a Salary Basis.”

July 29, 2013 Leave a comment

June’s “Tip of the Month” addressed the importance of paying an exempt employee on a salary basis in order to maintain the employee’s exemption from the overtime requirements of the federal Fair Labor Standards Act (“FLSA”). It also addressed the way in which making a deduction from an exempt employee’s regular paycheck risks the loss of the employee’s “salary basis” and exempt status. This month’s “Tip of the Month” examines what happens to an employee’s “salary basis” and exempt status when an employer adds to, instead of deducting from, an employee’s regular paycheck.

Unlike making a deduction, making an addition to an employee’s paycheck does not jeopardize the employee’s status as “paid on a salary basis.” Department of Labor regulations state that an employer can provide an exempt employee with additional compensation without losing the exemption or violating the salary basis requirement, so long as the employee’s pay includes a guarantee of at least a minimum weekly amount of $455 or greater.

Thus, an exempt employee who receives sales commissions on top of a base salary, or an exempt employee who receives additional “overtime” pay for time worked beyond his or her regular schedule, does not lose his or her “salary basis” status and as a result remains exempt from the overtime requirements of the FLSA.

For more information on this topic, please contact a member of the Employment Law Group.

What does paid “on a salary basis” mean?

June 17, 2013 Leave a comment

Generally, to qualify as exempt from overtime requirements under the federal Fair Labor Standards Act’s “white collar exemptions,” an employee must meet certain tests regarding his or her job duties and must be paid on a salary basis. (N.B., applicable regulations provide for exceptions from the salary requirement for certain sales employees, teachers, employees practicing law or medicine or to certain situations where an employee is paid on a fee basis.)

Understanding what qualifies as “a salary basis” and how to maintain the “salary basis” is thus essential to maintaining an employee’s exempt status. An employee is paid on a salary basis only if he or she is paid a predetermined salary of at least $455 per week. To maintain exempt status, the salary amount cannot be reduced because of variations in the quality or quantity of the employee’s work, and in general, employers must ensure the employee’s salary amount is paid for each and every workweek in which work is performed.

This means that if an exempt employee is absent an employer may not dock, deduct, or reduce the employee’s salary without risking the loss of the employee’s exempt status. Employers may not reduce an employee’s salary even if it is the employer who initiates the absence, e.g., by closing the workplace for a holiday or furlough.

There are certain circumstances set forth in Department of Labor regulations, 29 C.F.R. §§ 541.602-605 (and, as applicable, state law), under which an employer might make a deduction without losing the employee’s exemption. For example, employers need not pay exempt employees for any workweek in which they perform no work at all. An employer might also take a deduction when: an exempt employee is absent from work for personal reasons other than sickness or disability; an exempt employee is absent for one or more full days due to sickness or disability if the deduction is made in accordance with a bona fide plan, policy or practice of providing compensation for salary lost due to illness; an employer offsets amounts an employee receives as jury or witness fees, or military pay; an employer imposes good faith penalties for infractions of certain safety rules; and when an employer imposes a disciplinary suspension of one or more full days pursuant to workplace conduct policies. Employers should check with legal counsel before making a deduction pursuant to one of these exceptions.

For more information on this topic, please contact a member of the Employment Law Group.

Massachusetts Employers Must Promptly Pay Departing Employees “Final Wages.”

May 23, 2013 Leave a comment

The Massachusetts Payment of Wages Act, M.G.L. c.149, §148, requires employers to pay a discharged employee his or her wages in full on the date of discharge. Employees who quit must be paid by the employer’s next regular payday.

Importantly, the final “wages” owed at departure include more than just the employee’s salary. Employers must also pay departing employees for all accrued and unused vacation time and for commissions which have been earned by the employee but not yet paid.

Because vacation pay may be owed to departing employees, employers should ensure that vacation policies clearly set forth when vacation is accrued, and whether an employee can carry over unused vacation from one year to the next. Employers with “paid time off” (“PTO”) policies should specify what portion of allotted PTO is vacation time. If an employer’s policy does not distinguish between vacation time and other forms of PTO, a departing employee is should be paid for all earned time off.

Similarly, because commissions which have been definitely determined and have become due and payable to the employee are included in the “wages” due, employers should be careful to define when and how commissions are earned, and under what circumstances an employee will receive payment for a sale which has not been completed at the time of the employee’s termination.

Even when payments of final wages, vacation time, and commissions are delayed by a few days, there is a technical violation of the Wage Act. The Wage Act provides for mandatory trebling of damages, attorneys’ fees, and personal liability of corporate officers. As a result, employers should make every effort to comply with the Wage Act.

For more information on this topic, please contact a member of the Employment Law Group.

Massachusetts Employers Must Provide Meal Breaks

April 17, 2013 Leave a comment

The common practice of working through lunch can result in a violation of the Massachusetts meal break law. Employers are required by law to allow any employee who works more than six hours a day an unpaid and unfettered meal break of at least thirty minutes. This law applies to exempt and non-exempt employees alike. It does not, however, apply to employees who work in certain industries, including the iron, glass, print, bleach, dye, paper and letterpress industries.

To qualify as a meal break, an employee must be unrestricted for a full thirty minutes. The employee must have the freedom to leave the workplace if he or she so desires and the employee must be entirely relieved from performing job duties during the break. Otherwise, the employer must compensate the employee for his or her time.

Employees can choose to waive this break, and to work through the allotted time-off, but the decision to do so must be voluntary. If an employee works through a break, either with or without the employer’s permission, then the break time becomes compensable. As a result, the employer will owe wages for all time worked by the employee, including the time originally set aside as a break, as well as any resulting overtime. To avoid liability, employers should establish, clearly communicate, and uniformly enforce a meal break policy.

For more information on this topic, please contact a member of the Employment Law Group.

Internships Raise Wage and Hour Risks for Employers

April 16, 2013 Leave a comment

Student internships are increasingly popular. While internships generally benefit employers and interns alike, there is uncertainty regarding whether internships may be paid or unpaid. The answer to this question depends on whether the internship falls under the “learner/trainee” exemption to the payment of minimum wages and overtime rules under the federal Fair Labor Standards Act (“FLSA”). If the internship falls under the exemption, then it may be unpaid. If it does not, the employer must pay the intern in accordance with federal and state minimum wage laws. A failure to do so could result in significant liability to the employer.

The U.S. Department of Labor (the “DOL”) has set forth a set of six factors to use in determining whether an unpaid internship at a private-sector, for-profit business comes within the “learner/trainee” exemption, and thus whether the intern must be paid. The internship must meet each of the six factors in order to come within the exemption. The DOL has stated that the most important factor is whether the internship is primarily for the intern’s benefit rather than for the employer’s benefit. Under the DOL’s analysis, an internship is much more likely to be considered exempt if the intern does things that increase his or her skill set, as opposed to clerical tasks. Note that this test applies to for-profit businesses only; non-profits may generally maintain unpaid internships.

The DOL’s six factors are:

  1. The training is similar to what would be provided in a vocational school or educational institution.
  2. The training is for the benefit of the intern.
  3. The intern does not displace any regular employees, but works under their close observation.
  4. The employer derives no immediate advantage from the intern (and on occasion its operations may actually be impeded).
  5. The intern is not necessarily entitled to a job at the conclusion of the internship.
  6. Both the employer and the intern understand that the internship is unpaid.

Interns who do not meet this test are not permitted to work without pay—no matter how much of an intangible benefit the intern might receive.  Employers whose internships do meet the DOL test should consider creating a document evidencing that the internship meets the DOL’s criteria.

For more information on this topic, please contact a member of the Employment Practice Group.

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