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.

New Federal Law Protects Trade Secrets But Also Requires Changes to Employee and Contractor Agreements

May 5, 2016 Leave a comment

By: Sandra E. Kahn

The new Defend Trade Secrets Act of 2016 (DTSA) is expected to be signed into law by President Obama.  The Act will allow claims for trade secret theft to be brought under a federal civil cause of action.

Under certain circumstances, the Act will provide protection for whistleblowers who divulge trade secrets to the government in order to report wrongdoing.  As such, employers will now have to inform their employees of that protection in any agreement or contract.  It is advised that employers consult with their counsel to revise contracts as necessary.

For a more detailed explanation of the DTSA, read the full post on our Good Company blog.

Are You Responsible for Your Employees’ “Shenanigans” Outside the Office?

March 17, 2016 Leave a comment

shamrock-iconAs music and beer flow freely this St. Patrick’s Day, employers have good reason to be aware of what “shenanigans” their employees may be up to.

Employers already know that sexual harassment in the workplace is illegal and can result in liability, but employers should also know that under some circumstances sexual harassment outside of the workplace can result in employer liability.  Employers are liable for the harassment of employees by managers and persons with supervisory authority, regardless of whether the employer knows of the conduct.  Employers are also responsible for harassment committed by non-supervisory employees where the employer knew or should have known about the harassing conduct and failed to take prompt, effective, and reasonable remedial action.  As a result, an employer could find itself facing a claim for harassment based on conduct outside the workplace.

The Massachusetts Commission Against Discrimination (MCAD) uses the following factors to assess whether conduct outside the workplace constitutes sexual harassment under M.G.L. c. 151B for which an employer is liable:

  • whether the event at which the conduct occurred is linked to the workplace in any way, such as at an employer-sponsored function;
  • whether the conduct occurred during work hours;
  • the severity of the alleged outside-of-work conduct;
  • the work relationship of the complainant and alleged harasser, which includes whether the alleged harasser is a supervisor and whether the alleged harasser and complainant come into contact with one another on the job;
  • whether the conduct adversely affected the terms and conditions of the complainant’s employment or
  • impacted the complainant’s work environment.

To minimize the risk of liability, employers should be proactive in creating a harassment-free workplace and culture, and raise awareness about the responsibilities supervisors have in responding to inappropriate conduct.  Employers can do this by conducting anti-harassment training and by distributing the company’s harassment policy.  Distributing the company’s harassment policy isn’t just good practice, it’s the law.  Massachusetts requires that employers with six or more employees not only have a sexual harassment policy and give it out to new employees when they start work, but also that an individual copy be distributed to each employee annually.

An employer’s commitment to prohibiting harassment extends to employer sponsored gatherings, including holiday parties where alcohol is served.  When planning such events, consider reminding employees of their obligations with regard to harassment in advance, and limiting alcohol consumption through strategies such as using trained professional servers.

Contact a member of the Employment Law Group for more information on employer liability for outside of work behavior, responding to complaints of sexual harassment, and for assistance in creating workplace policies.

Categories: Uncategorized

2016 New Year’s News for Employers

December 28, 2015 Leave a comment

2015-01-05_8-57-41As we approach the New Year there are a few important changes to keep in mind, as well as recommendations to get your employment law practices in order.

What are these changes?

  • Minimum Wage Goes Up
  • Earned Sick Leave Safe Harbor Ends
  • Sexual Harassment Law Compliance
  • Data Protection Compliance

For all the details read our Employment Law Alert.

If you have questions about any of the above suggestions, please contact Sandy Kahn or any member of MBBP’s Employment Law Group.

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.

10 Points for Reviewing Executive Employment Agreements

September 22, 2015 Leave a comment

Employment Attorney Scott ConnollyAn executive’s employment agreement defines expectations regarding role, responsibilities and performance. It also establishes key contractual obligations for the executive and the employer concerning compensation and benefits, equity grants, the length or term of employment, early termination and its consequences, post-termination restrictions, and dispute resolution. Compensation, termination and other provisions may implicate tax rules and trigger penalties. Later, if there is disharmony in the relationship or disagreement about the parties’ obligations, these provisions may critically affect the rights and obligations of the executive.

Here are 10 important considerations when reviewing an executive employment agreement.

For more information on this topic, please contact Scott J. Connolly.

U.S. Department of Labor Issues Interpretation on Independent Contractor Misclassification

July 28, 2015 Leave a comment

ela_indexThe Administrator of the U.S. Department of Labor (“DOL”) Wage & Hour Division issued a formal Interpretation to provide “additional guidance” concerning the misclassification of workers as independent contractors under the federal Fair Labor Standards Act (“FLSA”). Businesses continuing to utilize independent contractors need to understand that combating misclassification is a priority for DOL and this latest action may lead to increased misclassification litigation.

To learn more about this important issue read our Employment Law Advisor.