Massachusetts Overtime Law
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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. You can also learn more about how overtime pay is calculated if you are non-exempt.
Why is it important to understand the overtime rules? If an employee is owed unpaid overtime, they can sue and recover two to three times their actual damages, as well as reimbursement of their legal fees from the employer. The remedies for overtime violations are different between federal and state law, so it is also important to understand which law covers (or does not cover) you. |
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Exempt vs. Non-Exempt Employees
Who is exempt from overtime? The overtime rules can be confusing. What you need to remember is that there are three things that must be true for an employee to be considered exempt from overtime.
First, you must be paid on a salary basis. This means you receive the same amount of base pay each week regardless of how many hours you work.
Second, you must earn at least $684 per week, or $35,568 annually. Read more here about the increase to minimum salary requirement in 2020.
Third, the actual duties you perform in your job need to fall within one of the exemptions under the overtime laws.
First, you must be paid on a salary basis. This means you receive the same amount of base pay each week regardless of how many hours you work.
Second, you must earn at least $684 per week, or $35,568 annually. Read more here about the increase to minimum salary requirement in 2020.
Third, the actual duties you perform in your job need to fall within one of the exemptions under the overtime laws.
Exempt Definition: 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 you are paid on a salary basis, if you either do not meet the minimum salary threshold or your duties are not FLSA exempt, you 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.
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 Definition: 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 you make less than $35,568 per year and are not paid overtime, you may have a claim.
Exempt Definition: 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 you 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 a straightforward exercise. 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.
Most people, however, are left trying to figure out how these exemptions apply to their situation. This is often not a straightforward exercise. 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.
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.
Exempt vs. Non-Exempt: Summary
If you are not paid on a salary basis or if you do not meet the minimum earning threshold, you are not exempt from overtime pay no matter what your duties are. Similarly, if your duties are non-exempt, your employer should be paying overtime even if you are paid on a salary basis.
What it Means if You Are Non-Exempt
If you are non-exempt, the first thing it means is that you should be paid 1.5 times your regular rate of pay for hours worked over 40 in a week. This applies even if you don't formally track your hours. If you work for a retail business, you should receive premium pay for work on Sundays.
It also means that under new Massachusetts law you can't be held to a non compete. This applies to non compete agreements signed on or after October 1 2018.
It also means that under new Massachusetts law you can't be held to a non compete. This applies to non compete agreements signed on or after October 1 2018.
How Our Employment Lawyers Can Help
We can help you navigate these issues and get clarity on your rights and obligations as an employer or an employee. Read more about some example overtime law cases we have handled. 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.
