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Employee Compensation and Classification

    need help with a compensation issue? contact us.

"Emily is an incredible resource of knowledge on employment law. She helped guide us on how to structure our employee classifications and made adjustments to our consulting agreements so our business is better protected and positioned. She's both law-savvy and business minded - great asset to have when launching/growing a business."
Diana Bagas, Launch Web Marketing

"sln represented me in a complicated employment-related dispute. What could have been a prolonged nightmare for me was handled swiftly and skillfully, and with fairness and dignity....They are seasoned, super responsive and always follow through. I would highly recommend their services to anyone looking for legal advice."
Smita N.

"Emily helped our LLC in crafting an international sales agency agreement. She took the time to listen and learn about our business as well as ask about our short and long terms goals. She has a deep understanding of business contract law and was able to explain things to us clearly without being overly legalese. We would recommend SLN Law without hesitation!"Michael M.

​"Previously, I spoke with a couple other lawyers and I did not feel comfortable with their approach prior to calling Emily. Jenna did an excellent job in assessing what I wanted to accomplish and completed my will, trust and other documents in a very short time. I am so happy I made the right choice in choosing slnlaw as my estate team."  Evelyn W.

"Long overdue public words of gratitude for Emily and her associates' work on my behalf.  They were so very respectful of me during an emotionally and financially ridden time- and that mattered more than the positive result.  May all clients have such advocates on their sides!"  Donna B.

"Emily, a chief partner, and the two other lawyers who worked on my case were extremely competent and approachable. They were responsive to inquiries and they thoughtfully explained, as needed, complex legal terms. I was very well represented at each stage of a protracted legal case against a major national firm."  Brian R

"It was a pleasure working with Emily Smith-Lee on a business matter. She willingly shares her expertise and always listens to her clients' concerns. Emily's caring demeanor puts people at ease immediately. The outcome of my experience was quite favorable. I would highly recommend them."  Camille B.

"After more than a year of discrimination and harassment in my previous position at a teaching hospital, I was finally at the point when I knew I needed help, otherwise I could break. Thus, I started to search Massachusetts Employment regulations, and one of my Google searches brought me to an advertisement for Emily E. Smith-Lee’s book “Rules of the Road. What You Need to Know About Employment Laws in Massachusetts.” It was my lucky day, and the start of my road out of the continued misery in my workplace... I would like sincerely to thank them both for their excellent job, and emotional support and encouragement. If you feel harassed, bullied, or discriminated against, Emily and Jack are the ones who will go out of their way to help you."  Valentina W.

Massachusetts Law About Wages, Compensation and Employee Classification

Issues around employee compensation are some of the most common disputes we see.  A simple misstep under the federal and Massachusetts wage and hour and overtime laws can create a very expensive problem for an employer, and result in significant damages to an employee who has not been properly paid or classified.  There also important rules about pay equity between male and female employees under federal and Massachusetts equal pay laws. The major areas to pay attention to are:Unsure whether these rules are being followed in your workplace?  Contact us for a free consultation, and we will help you assess the situation and decide what your best next steps are.
Minimum Wage
​Both federal and Massachusetts law set standards for minimum wages, and where a state has a higher requirement than the federal minimum wage, the state requirement applies.  Massachusetts minimum wage is higher than the federal minimum wage- it is currently set at $12 an hour for 2019, but scheduled to increase each year until it reaches $15 an hour in 2023.  There are special rules for tipped employees- though their minimum wage rate is lower than for other employees, they still have to make the state minimum wage as a combination of wages and tips, and there are important restrictions about when and how an employer can require these employees to share tips (tip pooling arrangements).

Read more about the Massachusetts Minimum Wage Law and how it might affect you.
Overtime Laws and Exempt Classification
Any employee who is not properly classified as exempt under the federal Fair Labor Standards Act ("FLSA") and the Massachusetts overtime laws must be paid one and a half times their regular hourly rate for each hour worked over 40 in a week.  To be considered exempt, an employee must meet all three of these tests: (i) they are paid on a salary basis (meaning they are paid their base pay for each week regardless of hours worked); (ii) they make at least $455 per week; and (iii) their duties are considered exempt duties.  Many employers get the "exempt duties" test wrong, and some assume that if an employee is paid on a salary basis, he or she is exempt from overtime.  This is not the case, and you must also be able to show that the kind of work your employee does is exempt work.  The costs of getting this wrong can be very steep- if you are in doubt, or have employees who regularly work more than 40 hours in a work week, you should consult an employment lawyer to make sure that your classifications are appropriate under federal and Massachusetts overtime law.

Read more about Overtime Law and how it might affect you.
Timely Payment of Wages
The Massachusetts Wage Act requires that all employees be paid within six days of the end of the payroll period.  With some exceptions, employees must be paid weekly or bi-weekly, and, even under the exceptions, in no event less frequently than monthly.  This time period varies from state to state, and this requirement is often overlooked by out of state businesses with Massachusetts employees. It is also important to remember that if an employee is fired or laid off, they must be paid everything they are due on the day of termination, including any accrued and unused vacation time and earned commissions.

Penalties for violating the Massachusetts Wage Act are serious- if an employee proves he or she is owed wages, the employer must be ordered to pay three times the proven damages, as well as the employee's legal fees and expenses.  This means in almost every situation it is less expensive to comply with the specific requirements of the Wage Act than to get into a dispute about wages with your employees or former employees.

Read more about Wage and Hour Laws and how they might affect you.
The Massachusetts Independent Contractor Law
Though it is common in some industries to employee people as independent contractors, or "1099 employees,"  the Massachusetts Independent Contractor Law makes many of these arrangements unlawful.  Massachusetts law sets a very strict test for treating a worker as anything other than an “employee” under the law.  Any individual performing any services for a business will be considered to be an "employee" for purposes of Massachusetts labor and Wage and Hour laws unless the business can prove all three of the following:
  • the individual is free from control and direction of the business he or she is providing services for;
  • the service is performed outside the usual course of the business of the employer; and
  • the individual is customarily engaged in an independently established trade, occupation, profession or business of the same nature as that involved in the service performed. 
You probably know others in your profession or industry who use independent contractors instead of W2 employees.  It may even be somewhat of an "industry standard."  That does not mean it is legal under the Independent Contractor Law, and the last thing you want to be is the test case for a worker who believes they should have been paid as a W2 employee (the same harsh penalties that apply to non payment of wages also apply under the Independent Contractor Law).
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Read more about the Independent Contractor Law and how it might affect you.
Federal and Massachusetts Equal Pay Laws
Both federal and Massachusetts law require that employers maintain pay equity between their male and female employees who do comparable work.  The concept of "equal pay for equal work" has been a rallying cry for years for people trying to address the wage gap between men and women in this country.  Employers can still pay people differently based on seniority, merit, or other factors unrelated to gender, but if there are unexplained discrepancies, or if the overall effect of these different standards is to consistently pay similarly situated women less than men, the employer could face a lawsuit under the equal pay laws.  In Massachusetts, a new law provides a defense to employers who undergo an internal audit or investigation of their pay practices, and make a good faith effort to remedy any unauthorized discrepancies they find.  Read more about the equal pay laws.
How slnlaw Can Help
We can help you navigate these issues and get clarity on your rights and obligations as an employer or an employee.  You can use the button below to schedule a call back from a member of our team, give us a call at  781-784-2322, or fill out our web form  to let us know a little more about your situation.
About slnlaw

We are a Massachusetts law firm focused on business law, employment law, and estate planning. Our team includes attorneys with large law firm experience, public service experience, experience working with small businesses on a wide variety of matters, an attorney with an advanced degree (LLM), and a former clerk to the Massachusetts Supreme Judicial Court.  Attorney and founder Emily Smith-Lee has been named to the Massachusetts Super Lawyers list every year since 2013, and was recently named a 2018 Lawyer of the Year by Massachusetts Lawyers Weekly.  Our lead estate planning attorney Jenna Ordway has been recognized as a top estate planning attorney, and has published a book about estate planning in Massachusetts.
 
What We Do

Employment Law: We advise both businesses and individuals about Massachusetts and federal employment laws, and represent them as needed in litigation if a lawsuit cannot be avoided. 

Business Law: In addition to providing advice on employment matters and defense of employee lawsuits, we can help you set up your new business, review your agreements with vendors and customers, resolve or litigate business disputes, and much more. 

​Estate Planning: We provide customized plans for individuals and families to help minimize your estate tax liability, protect and preserve your assets, and ensure that the people in your life are taken care of the way that you want.  We can help you with wills and trusts, planning for a child with special needs, planning for the cost of long term care, and more.

We also have an extensive network of other professionals, some lawyers in other practice areas and others who are non-lawyer professionals who offer services that our clients frequently need.  If the problem you need solved is not one that we handle, we are happy to provide a referral to someone we know you can trust.