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Massachusetts Overtime Law for Employers

Understanding the overtime laws and exemptions is critical for any employer.  This is because if you make a mistake and an employee sues for unpaid overtime, you could be required to pay multiple damages and their attorneys' fees, in addition to your own.

Both the federal Fair Labor Standards Act ("FLSA") and Massachusetts overtime law require premium overtime pay for hours worked over 40 in a week for non-exempt employees. Overtime rates are one and a half times an employee's regular hourly rate for each hour over 40.  This includes some, but not all, employee travel time.  

There are exemptions from overtime under both federal and state law.  Some are the same, but there are important differences.

What you need to know in short:
  • Any employee who is not paid on a strict salary basis (i.e., hourly or per diem employees) is likely not exempt from overtime, regardless of their job duties.
  • Many salaried employees are also not exempt from overtime, unless their actual job duties fall into one of the state or federal exemptions.
  • ​Any employee earning less than $684 per week, or $35,568 annually, is not exempt from overtime.
  • Overtime hours are calculated each week, even if your payroll is bi-weekly.  For example, someone who works 50 hours one week and 20 the next has ten overtime hours for the first week, even though the two week total is less than 80.

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Exempt vs. Non-Exempt Employees: The Salary Basis Test

​Many people stop at the salary test, and believe that they do not have to pay salaried employees overtime.  You need to know that this is only the threshold test- even if your employee is paid on a salary basis, if they either do not meet the minimum salary threshold or their duties are not FLSA exempt, they may still be entitled to overtime pay.

In determining the salary test, it does not necessarily matter that you call an employee's pay "salary." What matters under both Massachusetts and federal law is how the compensation actually works. If the employee’s pay is constant from week to week even though hours worked varies, that employee is probably paid on a “salary basis.” If, however, pay is regularly docked for hours or days missed, it is most likely not “salary."


An employer can apply accrued paid time off ("PTO") to time missed from work without putting the "salary basis" part of the overtime exemption test in danger, so long as the employee actually receives the base amount of pay in each pay period.

Exempt vs. Non-Exempt Employees: Minimum Salary Requirement

As noted above, an employee must earn at least $684 per week to be considered exempt. This amount increased beginning in 2020 from $455 per week. That means that as 2020 begins there may be employees who were classified as exempt but no longer meet the minimum earnings test. If your employee makes less than $35,568 per year and is not paid overtime, you may face liability under the overtime statutes for unpaid amounts.

Exempt vs. Non-Exempt Employees: What Are Exempt Duties?

The definition of FLSA exempt duties under federal law is broadly stated as “bona fide administrative, professional, or executive” duties. In addition to many court decisions interpreting what those words mean, the federal Department of Labor has a long list of specific duties that it considers “exempt” under this language. If you are fortunate enough to find the category that fits your employees in the statute or Department of Labor regulations (for example, there are specific rules for outside sales people, computer technicians, actuaries, and numerous other occupations), then you may have your answer.

Most people, however, are left trying to figure out how these exemptions apply to their situation. This is often not straightforward.  For example, many retail chains have faced lawsuits by assistant store managers arguing that despite the word "manager" in their title, what they do all day is not really management. 

You can read about the exempt duties in more detail. In brief, here are the basic definitions for the types of employees considered exempt from overtime.

Bona Fide Professional Employee. This generally applies to employees whose positions require an advanced degree. The work itself also must require advanced knowledge, and the exercise of discretion and judgment. Examples of professional employees include doctors, lawyers, dentists, teachers, architects and clergy.

Bona Fide Executive Employee. An executive employee must have managerial duties, including actual supervision of other employees and either the authority to hire and fire or substantial input into those decisions.

Bona Fide Administrative Employee. This generally applies to employees who work at a high level in the management or general business operations, and regularly exercise judgment and discretion on significant matters.

Overtime Rules for Highly Compensated Employees

Under the new Department of Labor regulations implementing federal overtime law, people earning $107,432 or more in total compensation are considered "highly compensated employees." These individuals are considered exempt if they regularly perform any one of the recognized exempt duties above. Prior to 2020, the threshold for a highly compensated employee was $100,000.

A highly compensated employee can reach that threshold through payment other than salary, but needs to receive at least $684 per week in salary. The remaining compensation can come through commissions, bonuses, or other payments.

What it Means if Your Employees Are Non-Exempt

If any of your employees are non-exempt, the first thing it means is that they should be paid 1.5 times their regular rate of pay for hours worked over 40 in a week. This applies even if you don't formally track hours.  

It also means that under new Massachusetts law those non-exempt can't be held to a non compete. This applies to non compete agreements signed on or after October 1 2018.  Note that you can still enforce other post-employment restrictions, like non-solicitation and nondisclosure provisions, regardless of their non-exempt status.

How Our Employment Lawyers Can Help

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We can help you navigate these issues, make sure your staff is compensated properly, and minimize your legal risk if something goes wrong.  You can use the button below to schedule a call back from a member of our team, or give us a call at  781-784-2322.
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  • Home
  • Employment Law
    • Guide To Employment Law Content
    • Advice for Employers >
      • Hiring Independent Contractors in Massachusetts
      • Termination Best Practices
      • Workplace Discrimination Employer Guide
      • Employee Handbook >
        • Employee Handbook Basics
      • Paid Family Leave and Your Small Business
      • Overtime Law for Employers
      • Employee Complaints About Pay
      • Employee Non Competes
    • Advice for Employees >
      • Discrimination in the Workplace
      • Sexual Harassment at Work >
        • Sexual Harassment Resources
        • Sexual Harassment in a Small Business
        • Constructive Discharge
        • Sexual Harassment and Non Disclosure Agreements
        • Sexual Harassment and Remote Work
        • Sexual Harassment Case Studies
      • Massachusetts Paid Family Leave
      • Non Compete Agreements >
        • Are non competes enforceable
        • Massachusetts Non Compete Act
        • Pre 2018 Massachusetts Non Competes
        • Non Compete Case Studies
        • Can I Avoid My Non Compete
      • Independent Contractor Law >
        • Independent Contractor Test
        • Working As Independent Contractor
        • Independent Contractor Case Studies
        • Independent Contractor Roadmap
      • Wage and Hour Laws >
        • Massachusetts Minimum Wage
        • Overtime Law >
          • Overtime Exemptions
          • Employee Travel Time
          • Federal or State Overtime Law
        • Overtime Law Case Studies
        • Massachusetts Wage Act >
          • Payment of Commissions
          • Wage Deductions
          • Late Payment of Wages
          • Paid Time Off
        • Wage Act Case Studies
        • What Are Your Wage and Hour Rights
      • Employment Contracts in Massachusetts >
        • Restrictive Covenants
        • Promissory Estoppel
      • Employment Termination >
        • Severance Pay
        • Should I Accept a Severance?
      • Do I Have a Case?
    • Unemployment in Massachusetts >
      • Unemployment Overpayment
      • Pandemic Unemployment
      • Unemployment Case Studies
  • Estate Planning
    • Guide To Estate Planning Content
    • Legacy Protection >
      • Why You Need an Estate Plan >
        • Why You Don't Have an Estate Plan
      • Massachusetts Estate Tax
      • Asset Protection Trusts
      • Children with Special Needs
      • Planning for Assisted Living
    • Is Your Will Enough >
      • Special Circumstances >
        • Estate Planning for Blended Families
        • Estate Planning for a Non Citizen Spouse
        • Estate Planning and Divorce
        • Estate Planning for Small Business Owners
      • Surviving Spouse's Share
      • Disinheriting Children Massachusetts
      • Updating Your Estate Plan
    • Estate Planning Documents >
      • What is a Trust >
        • Revocable trust
        • Irrevocable trust
        • Irrevocable vs revocable trust
      • Last Will and Testament
      • Durable Power of Attorney
      • Massachusetts Health Care Proxy
      • Life Estates in Massachusetts
      • Massachusetts Pet Trust
    • Probate Process >
      • Non Probate Assets
  • Business Law
    • Guide To Business Law Content
    • Small Business Law
    • Business Contract Basics
    • Civil Suit Defense
    • Legal Issues for Start Ups
    • Trademark Basics
    • How to Incorporate
    • Sale of Business
  • About
    • Reviews
    • Slnlaw Offices
    • slnlaw core values
    • Publications and Interviews
    • New Client Intake and Consultation
    • Contact
  • Attorneys
    • Emily Smith-Lee >
      • 2018 Lawyer of the Year
    • Rebecca Rogers
    • Sharleen Tinnin
    • Elijah Bresley
  • Legal FAQs
    • Estate Planning FAQs
    • Probate FAQs
    • Small Business FAQs
    • Wage Act FAQs
    • Commission Pay FAQs
    • Overtime FAQs
    • Independent Contractor FAQs
    • Non Compete FAQs
    • Employment Discrimination FAQs
    • Employment Termination FAQs
    • Massachusettts Unemployment FAQs
    • Severance Package FAQs
    • Medical Leave FAQs
    • Sexual Harassment FAQs
    • Employer FAQs
    • Civil Lawsuit FAQs
  • Blog