Massachusetts and federal law impose strict requirements on employers with respect to payment of wages, overtime, commissions, and certain accrued time on termination of employment. In addition, as of July 1, 2015, the law also requires employers to provide earned sick time for their employees, including part time and temporary employees. There are a few quick facts about these laws that all businesses and employees should know. Our employment lawyers can help you understand how these rules affect you, but here are the basics:
Employees must be paid within six days of the end of the payroll period, in order to be timely under the Wage Act. This time period varies from state to state, and this requirement is often overlooked by out of state businesses with Massachusetts employees.
If an employee is fired, he or she must be paid that same day for all amounts earned prior to the termination, as well as for any vacation time the employee has accrued but not used.
The Wage Act applies to commissions as soon as they are earned by the employee. When a commission is earned can vary according to the company's policy- for example, the policy can provide that a commission is earned when a customer signs a contract, when an invoice is sent to a new customer, or when the company is paid. Whatever that trigger is, the employee must be paid that commission within 6 days of the end of the pay period, just like wages.
With some very limited exceptions (i.e., withholding for taxes or health or other benefit premiums, deductions pursuant to an order of garnishment, and other similar deductions) it is unlawful for an employer to deduct money from an employee's paycheck.
Any employee who is not exempt from federal and state overtime laws must be paid at 1.5 times their regular rate for any hours worked in a single week over 40. It is important to note that new federal regulations that were supposed to take effect December 1, 2016, would require that any employee who makes less than $913.00 per week be treated as non-exempt from overtime. This is a significant increase from the previous threshold of $455 per week. In plain language, this means that no matter what a person's duties are, or whether they were previously considered ineligible for overtime pay, if they make less than $913 per week they must be paid overtime. On November 22, 2016, a federal judge in Texas enjoined enforcement of this regulation, and that order is currently on appeal in the Fifth Circuit Court of Appeals. For now, the threshold remains $455 per week, but that still could change. If you have employees who meet the old threshold but not the proposed new threshold, you will want to consult with one of our employment lawyers about how to manage your risk if the new regulations are upheld.
Overtime is calculated on a per-week basis, not based on the payroll period. For example, an employee who is paid every other week might work 25 hours the first week and 50 the next- although the total for the pay period is less than 80, that employee (if not exempt) should still be paid at an overtime rate for the extra 10 hours in the second week.
Under the new earned sick time law in Massachusetts, all employees earn an hour of sick time for each 30 hours worked, beginning on the first day of employment, up to 40 hours in a year. The time begins to accrue immediately, but an employer can limit the use of that time until 90 days (calendar days) after the start of employment. It’s not just sick time: time off under this law can be for the employee’s own illness, but also for purposes of attending routine medical appointments or taking care of a child or immediate family member, or taking a child or immediate family member to routine medical appointments. Unlike earned vacation time, unused earned sick time does not have to be paid out to the employee at termination. The law also prohibits retaliation against an employee for using any of the time accrued under this law.