Massachusetts Wage and Hour Laws
Wages, Overtime, and Commissions
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Timely and accurate payment of wages is a clear requirement of Massachusetts employment law. It is also something many employers, especially small businesses, struggle with.
These can be clear and obvious violations, like holding wages back at termination or chronically paying late. There are also violations that come from misunderstanding of the wage and hour laws. Examples include errors in deciding who is exempt from overtime, or miscalculation of commissions or overtime pay. The penalties for theses mistakes, intentional or not, can be severe. If an employee wins a claim under the Massachusetts Wage Act, the law requires the court to award them three times their actual damages. The employer will also have to pay the employee's legal costs and attorneys' fees. Learn more about the 10 most common wage and hour violations in Massachusetts. If an employee complains that they are not being paid properly under Massachusetts wage and hour laws, it is important that you handle that complaint properly. Massachusetts Minimum Wage LawBoth federal and Massachusetts law set standards for minimum wages. Massachusetts minimum wage is higher than the federal minimum wage.
Employees in Massachusetts must make at least $14.25 an hour for 2022. The minimum hourly wage is scheduled to increase one more time in 2023 to $15 an hour . There are special rules for tipped employees. Their minimum wage rate is lower than for other employees, because their income is supplemented by tips. But the employer must pay enough in an hourly wage that the combination of tips and hourly pay meets the overall minimum wage. There are also important rules about when and how an employer can require tip pooling or tip sharing among service employees. Read more about the Massachusetts Minimum Wage Law and how it might affect you. |
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Overtime Laws and Overtime Exemptions
The federal Fair Labor Standards Act ("FLSA") and the Massachusetts overtime laws require that non exempt employees be paid one and a half times their regular hourly rate for each hour worked over 40 in a week.
An employee is only exempt from overtime if:
(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 ($684 beginning in 2020); and
(iii) their duties are considered exempt duties.
Many people assume that if someone is paid a salary instead of an hourly wage they are exempt from overtime. This is not always true. You have to be able to also show that they meet the minimum weekly earnings and that their actual job duties are exempt.
"Exempt duties" fall in three general categories: professional, executive and administrative. There are a lot of gray areas within these categories. There is also a long list of specific jobs the federal Department of Labor has identified as exempt.
If you have employees who work more than 40 hours a week, it is a good idea to consult a lawyer and make sure you have them properly classified. If your employees travel from job site to job sit during the work day, it is also important to know the rules about paying for employee travel time.
If you are a retail business that operates on Sundays, your non-exempt employees may also be entitled to Sunday premium pay.
Like the Wage Act, the state and federal overtime laws impose penalties for violations. These include double or triple damages and payment of the employee's attorneys' fees.
Read more about Overtime Law and how it might affect you.
An employee is only exempt from overtime if:
(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 ($684 beginning in 2020); and
(iii) their duties are considered exempt duties.
Many people assume that if someone is paid a salary instead of an hourly wage they are exempt from overtime. This is not always true. You have to be able to also show that they meet the minimum weekly earnings and that their actual job duties are exempt.
"Exempt duties" fall in three general categories: professional, executive and administrative. There are a lot of gray areas within these categories. There is also a long list of specific jobs the federal Department of Labor has identified as exempt.
If you have employees who work more than 40 hours a week, it is a good idea to consult a lawyer and make sure you have them properly classified. If your employees travel from job site to job sit during the work day, it is also important to know the rules about paying for employee travel time.
If you are a retail business that operates on Sundays, your non-exempt employees may also be entitled to Sunday premium pay.
Like the Wage Act, the state and federal overtime laws impose penalties for violations. These include double or triple damages and payment of the employee's attorneys' fees.
Read more about Overtime Law and how it might affect you.
Timely Payment of Wages
There are strict requirements about the timely payment of wages in Massachusetts. Generally, employees must be paid at least bi-weekly, and receive their paycheck within six days after the close of the last pay period. That means if you have a two week pay period the ends on a Friday, you should receive your pay no later than the following Thursday. Certain salaried employees may agree to be paid monthly.
When the employment relationship ends, final wages and accrued unused vacation must also be paid timely. If the employee voluntarily resigns, the final paycheck must be provided in the next payroll period. If an employee is terminated, they must be paid these amounts on the day of termination.
Late payment of wages can be a serious problem for employees. It can also result in expensive damages and penalties for employers, even if the delay is an innocent mistake.
When the employment relationship ends, final wages and accrued unused vacation must also be paid timely. If the employee voluntarily resigns, the final paycheck must be provided in the next payroll period. If an employee is terminated, they must be paid these amounts on the day of termination.
Late payment of wages can be a serious problem for employees. It can also result in expensive damages and penalties for employers, even if the delay is an innocent mistake.
Commissions
Commissions are considered wages under the Wage Act. Any incentive compensation paid to an employee based on that employee's sales or other revenue-generating activity should be considered a commission. Often an employer will pay commissions on a different schedule than regular wages. This sometimes leads to problems under the timing of payment requirements of the Wage Act.
Also, whether commissions are due to an employee at termination is often the subject of dispute. The question is whether an employee has earned the commission prior to termination. This, in turn, depends on the employer's commission policy, written or unwritten. In some situations, the commission is earned when the customer agrees to make a purchase. In others, the commission is not earned until the company receives payment from the customer.
If the commission was earned prior to termination, it must be paid to the employee the day of termination, just like other wages and vacation pay.
Read more about commissions under the Wage Act.
Also, whether commissions are due to an employee at termination is often the subject of dispute. The question is whether an employee has earned the commission prior to termination. This, in turn, depends on the employer's commission policy, written or unwritten. In some situations, the commission is earned when the customer agrees to make a purchase. In others, the commission is not earned until the company receives payment from the customer.
If the commission was earned prior to termination, it must be paid to the employee the day of termination, just like other wages and vacation pay.
Read more about commissions under the Wage Act.
Enforcement of Wage and Hour Laws
If you think you have a claim under the wage and hour laws, you must first file a complaint with the Massachusetts Attorney General fair labor division. You can ask the Attorney General to investigate. More commonly, you request something called a "right to sue letter." If you want to bring a claim in court, you have to first get the right to sue letter from the Attorney General's office.
Once you have that letter, you can file a lawsuit in state or federal court. If you have not been paid before you file the lawsuit, the triple damages of the Wage Act apply. For this reason, it is important for employees who have not been paid to file the Attorney General complaint as soon as possible. Read more about what to expect as a plaintiff in a civil lawsuit.
This is also the reason that employers should promptly seek legal advice as soon as they are aware of a problem or an internal complaint about payment of wages. If you can get to the bottom of the situation quickly, and resolve any legitimate outstanding payments, you can avoid the triple damages penalty under the law.
Once you have that letter, you can file a lawsuit in state or federal court. If you have not been paid before you file the lawsuit, the triple damages of the Wage Act apply. For this reason, it is important for employees who have not been paid to file the Attorney General complaint as soon as possible. Read more about what to expect as a plaintiff in a civil lawsuit.
This is also the reason that employers should promptly seek legal advice as soon as they are aware of a problem or an internal complaint about payment of wages. If you can get to the bottom of the situation quickly, and resolve any legitimate outstanding payments, you can avoid the triple damages penalty under the law.
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