Category Archives: Employment

The Massachusetts Paid Family and Medical Leave (PFML) Law: Important Dates

By on May 22, 2019

The Massachusetts Paid Family and Medical Leave (PFML) law goes into effect on July 1, 2019, and creates a public insurance program to provide Massachusetts workers with paid leave in order to welcome and care for a new child; take time off for their own serious illness or injury; take care of an ill family member; or in connection with certain military circumstances. The leave will be funded through payroll deductions from covered Massachusetts workers and employers.

Although Massachusetts workers will not be eligible to take paid leave through this program until 2021, employers of Massachusetts workers (or those who provide “service localized in the Commonwealth”) will be required to provide notice of the benefits to covered workers in advance of the effective date, to begin making PFML contributions as of July 1, 2019, and to file their first mandatory quarterly reports in October 2019.

Notice Requirements
By June 30, 2019, employers must provide written notice to their current work force of PFML benefits, contribution rates, and other provisions. The department has posted form notices for employees and independent contractors, which are available for download here. Employers may also create their own notices as long as they meet the minimum requirements set out by the Department.

The notice can be provided electronically or in paper form and must give covered workers the option of acknowledging receipt or declining to acknowledge receipt of the information. Employers must collect and maintain these acknowledgements. New employees receive the written acknowledgment within 30 days of hire.

Before July 1, 2019, employers must also display the Massachusetts Paid Family and Medical Leave poster at each Massachusetts work location.

Employers that fail to provide the required notice can face a fine of $50 per individual for a first violation, and $300 per individual for a subsequent violation.

Tips for Employers:

  • Prepare your notices ASAP. Confer with legal counsel as necessary to review notices if you choose not to use the Department’s forms.
  • Create a system for receiving and tracking notice acknowledgment forms.
  • Post the required PFML poster in every Massachusetts work location.
  • Provide the poster electronically to employees who do not have a specified work location.

Payroll Deductions
Employers with Massachusetts covered workers will be required to start making contributions to the state paid leave fund on July 1, 2019. The contribution rate for 2019 is set at 0.63% of each covered worker’s wages on the first $132,900 of annual gross earnings. The contribution rate may be changed annually and will be determined by October 1 for the following calendar year.

The 0.63% payroll tax rate will be split between the two leave programs, with 0.52% going to medical leave and 0.11% to family leave. Employers can deduct the entire 0.11% family leave contribution and up to 40% of the 0.52% medical leave contribution from wages paid to covered workers. Employers with fewer than 25 covered workers in Massachusetts do not have to pay any employer share of the medical leave contribution, but larger employers will be required to pay the remaining 60% of the medical leave contribution rate.

Employers are responsible for remitting the full 0.63% contribution to the state paid leave fund. Contributions for July 1, 2019 through September 30, 2019 must be paid through the MassTaxConnect portal by October 31, 2019. Failure to make the required contributions will result in a penalty of 0.63 percent of an employer’s total annual payroll for each year of compliance failure (or fraction thereof), in addition to the total amount of the benefits paid to covered individuals for whom no contributions were made.

Tips for Employers:

  • Work with your payroll department or provider to make sure you have set up payroll deductions to begin July 1, 2019.
  • If you have not already done so, register with MassTaxConnect so you can make payments for the first quarter contributions (for July 1, 2019 through September 30, 2019) by no later than October 31, 2019.

First Mandatory Quarterly Report
Employers are required to submit the first mandatory quarterly report through the MassTaxConnect portal in October 2019. The Department will announce specific reporting and documentation guidelines by July 1, 2019, but employers should expect quarterly reports to include the following information: the name, Social Security number, and wages paid or other earnings for each covered employee.

The Department will use the quarterly report to determine the total quarterly contribution owed, which must be paid through MassTaxConnect within 30 days after the end of the quarter.

Exemption for Private Plans
If you already provide employees with a paid leave benefit, you can apply for an annual exemption through the MassTaxConnect portal beginning April 29, 2019, and no later than September 20, 2019.  A private benefit plan, whether self-funded or through a third-party insurer, must be at least as generous as the benefits provided by the PFML law and cannot be more expensive for an employee than the contributions allowed under the PFML. Applications for exemptions will be reviewed and acceptances conveyed on a rolling basis, will be effective for one year, and may be renewed annually. In addition, those with self-funded plans will be required to post a surety bond.

As a reminder, when PFML benefits become available, covered workers will be eligible for the following annual benefits:

  • Up to 20 weeks of paid medical leave related to a worker’s own serious health condition that prevents him or her from working;
  • Up to 12 weeks of paid family leave related to the birth, adoption, or foster care placement of a child;
  • Up to 12 weeks of paid family leave to care for a family member with a serious health condition;
  • Up to 12 weeks of paid leave related to a qualifying exigency due to a family member being on or being called to active duty in the armed forces; and/or
  • Up to 26 weeks of paid family leave to care for a family member who is a covered service member with a serious health condition.

Total annual benefits for all qualifying reasons will be capped at 26 weeks per year. All types of paid leave benefits will be available to covered workers on January 21, 2021, except leave related to care for a family member with a serious health condition, which will be available on July 1, 2021.

Getting Direct Payment for Subcontractors when General Contractors Fail to Pay

By on March 20, 2019

Massachusetts law provides a mechanism through which subcontractors on public projects may get paid directly from awarding authorities. If a general contractor does not pay a subcontract balance due within seventy days after the subcontractor substantially completes the work, the subcontractor may demand payment directly from the awarding authority in certain circumstances. These requirements are outlined in M.G. L. c. 30, § 39F.

First, for a subcontractor to recover via direct payment it must be either a filed sub-bidder or been approved in writing by the awarding authority. A proper demand is made by sending a letter to the awarding authority detailing the balance owed under the subcontract with a breakdown of the accounting, and the status of the subcontract work. The letter must be under oath and sent via certified mail to both the awarding authority and general contractor. The general contractor must respond with any disputes within 10 days. If the general contractor timely disputes the claim the awarding authority must place the disputed amount in a joint bank account for the subcontractor and general contractor. If the dispute is for only part of the claim, the awarding authority must pay the subcontractor the undisputed balance, and place the disputed portion in a joint account until the dispute is settled. Once the general contractor and subcontractor come to an agreement, the bank must release the amount as instructed by them. If they do not reach an agreement, the bank can release the amount in accordance with a court order. The awarding authority must pay the subcontractor the undisputed balance due within 15 days of receipt of the demand.

It is best to consult with a construction attorney to ensure strict compliance with statutory requirements when making direct payment demands.

`Tips the Season…to Revise Your Payroll Practices in the Service Industry!

By on January 22, 2019

As of January 1, 2019, the new minimum wage in Massachusetts is $12 per hour for non-tipped employees and $4.35 per hour for tipped employees who make more than $20 per month. However, employers need to be aware of an important caveat with regard to the latter category: under the new law, employers must ensure that each tipped employee earns the equivalent of $12 per hour for each shift the employee works. In addition, all tips must be retained by the employee or distributed through a valid tip pool. If the employee’s combined wages and actual tips do not total at least $12 per hour, then the employer is required to make up the difference.

Restaurants and other businesses that employ tipped workers should bear in mind that most payroll software and service providers are not yet equipped to make these calculations automatically. This means employers may need to make manual payroll calculations in order to comply with the new law until such time as their service providers are up to speed. (The Massachusetts Attorney General’s Office has published pay and recordkeeping tips to aid with compliance.) Failure to make payments in accordance with the law could put your business at risk of litigation.

Massachusetts Paid Family and Medical Leave Draft Regulations – How Employers Can Get Involved

By on January 22, 2019

Starting in 2021, Massachusetts employees will be entitled to paid family and medical leave under the Massachusetts Paid Family and Medical Leave Act. The leave will allow employees to (1) care for a family member with a serious health condition, or (2) care for the employee’s own health condition. The leave period ranges from 12 to 26 weeks, depending upon the reason for the leave. The law also protects employees from retaliation after taking such leave.

Beginning in July of 2019, employers will be required to make contributions to the state fund that will be used to pay for these leaves and to provide certain notices to employees regarding the new law. The newly-created Massachusetts Department of Family and Medical Leave plans to publish draft regulations for the Massachusetts Paid Family and Medical Leave Law no later than January 23, 2019; these draft regulations are expected to provide more information on the law, as well as employers’ obligations under the law to make fund contributions.

The Department has scheduled a number of public listening sessions on the draft regulations throughout the Commonwealth, beginning with a session in Boston on January 30, 2019. A complete list of these public listening sessions can be found here. Any member of the public, including representatives from employers around the Commonwealth, may attend and present testimony related to the proposed draft regulations. In addition, written presentations may be sent to MassPFML@Mass.gov.

Non-Compete Reform Comes to Massachusetts

By on August 30, 2018

     After years of trying to find common ground on non-compete reform, the Massachusetts legislature passed a bill – which Governor Charlie Baker signed into law on August 10, 2018 – that promises to significantly change the employment landscape in the Commonwealth. The new law will take effect on October 1, 2018.

The following is a brief, non-exhaustive overview of some of the law’s most notable features:

  • The law defines a non-competition agreement as an “agreement between an employer and an employee, or otherwise arising out of an existing or anticipated employment relationship, under which the employee or expected employee agrees that the employee will not engage in certain specified activities competitive with the employee’s employer after the employment relationship has ended,” but excludes certain agreements from its purview, including: (1) non-compete agreements made in connection with the sale of a business; (2) non-compete agreements made in connection with the cessation or separation of employment (provided the employee is given seven business days to rescind acceptance); (3) employee non-solicitation covenants; (4) customer/client/vendor non-solicitation covenants; and (5) non-disclosure of confidential information agreements.                                                                                                                                                                                                                   
  • Both traditional employees and independent contractors are covered under the law.                                                                                                                                                                                              
  • All agreements must be in writing and signed by both parties, and must expressly affirm an employee’s right to consult with counsel before signing.                                                                                                                                                                                                                                                                                                       
  • If a non-compete agreement is signed at the beginning of an employment relationship, it must be given to the employee when the employment offer is made or 10 days before the commencement of employment, whichever is earlier.  Agreements signed after the commencement of employment must be “supported by fair and reasonable consideration independent from the continuation of employment.”                                                                                
  • The law requires so-called “garden leave pay” or some “other mutually agreed-upon consideration.” Garden leave pay refers to an agreement in which the employer, during the course of the restricted period, continues to pay the former employee at least 50 percent of the “highest annualized base salary” that employee received within the two years preceding his or her termination. The law does not further define or elaborate upon what “other consideration” might be acceptable in lieu of garden leave pay, however.  In addition, it remains to be seen whether garden leave pay constitutes sufficient consideration for those non-competes executed after the commencement of an employment relationship, or whether some consideration above and beyond the garden leave pay is required in those circumstances.                                                                                                                                                  
  • Agreements not to compete must be “reasonable.” They can be no broader than necessary to protect a legitimate business interest; they cannot exceed one year in duration; their geographic scope must be reasonable; and they must otherwise be reasonable “in the scope of proscribed activities in relation to the interests protected.”                                                   
  • Non-compete agreements may not be enforced against non-exempt employees; undergraduate or graduate students engaged in short-term employment; employees who have been terminated without cause or laid off; or employees who are 18 years old or younger.                                                                                                                                                      

These new requirements apply only to non-compete agreements entered into on or after October 1, 2018. Nevertheless, employers may wish to revise existing non-compete agreements for current employees in order to avoid disparities amongst employees, as well as potential future litigation.

 

 

Show Me the (Same Amount of) Money!

By on June 21, 2018

The state’s new pay equity law, which amends the Massachusetts Equal Pay Act (“MEPA”), will take effect on July 1, 2018.  It is one of the strongest pay equity laws in the country, and subjects employers to double damages and attorneys’ fees in the event of a violation.  Moreover, it is a “strict liability” statute.  Thus, whether or not an employer intends to discriminate against employees of one gender is “irrelevant” to the analysis.

The amendments prohibit employers from, among other things:

• Paying different wages to people of different genders who perform “comparable work,” unless the difference in salary is attributable to one (or more) of six enumerated statutory factors;

• Asking job applicants about their wage or salary history;

• Decreasing the wages of an employee solely to close the wage gap;

• Retaliating against employees for exercising their rights under MEPA.

The revisions also establish a safe harbor provision for employers who perform self-evaluations of their pay practices.

What Does “Comparable Work” Mean?

MEPA defines “comparable work” as work that “requires substantially similar skill, effort, and responsibility” that is performed under similar working conditions.  Employers should not assume that a job title, or even a job description, necessarily determines comparability.  In fact, employees need not even be in the same business unit or department in order have “comparable” jobs.  Notably, this is a broader definition than the “equal work” standard under federal law.

Even if employees are in comparable roles, however, employers are permitted to pay them different salaries if the difference is based on of one (or more) of the following factors:

• A seniority system (as long as seniority is not affected by pregnancy, parental or family leave);
• A merit system;
• A system that measures earnings by quantity or quality of production, sales, or revenue;
• The geographic location in which a job is performed;
• Education, training, or experience, as long as these factors are reasonably related to the job in question; and
• Travel that is a regular and necessary part of the job.

What Employers Should Know About the Safe Harbor Provision

In order to trigger the safe harbor provision, which establishes an affirmative defense against liability for claims of pay discrimination, an employer must have conducted a “reasonable and good faith” pay audit within the previous three years (and before an employee files an action), and must demonstrate that it is making “reasonable progress” towards eliminating wage differentials across genders.

Self-evaluations not only help employers identify and rectify wage gaps, they guard against liquidated damages in the event of a judgment against the employer, even if the evaluation was not “reasonable” in detail and scope.

Guidance for Employers

The Massachusetts Attorney General’s Office has issued a Guidance that addresses the amendments.  While the Guidance does not have legal force, it is a useful compliance tool and a good place to start if you have basic questions about how to ensure you are compensating your employees equally across genders for “comparable work.”  However, employers should bear in mind that “the complexity of the analysis required will vary significantly depending on the size, make-up, and resources of each employer”; the Guidance does not, and cannot, address the many fact-specific situations that may arise at any given place of employment.

In addition to the Guidance, the AG’s Office has generated a “Pay Calculation Tool” to help employers identify and evaluate gender-based pay gaps.  Smaller employers with clearly defined groupings of comparable jobs and relatively simply pay structures may benefit from using the tool, at least as a first step; it is not appropriate for large pay groups or complicated pay structures.  Furthermore, the data the tool generates may be discoverable in litigation or government investigations, so employers should consult with counsel before conducting any self-evaluation.

“Ban-the-Box” Update for Employers

By on May 21, 2018

Since 2010, employers in Massachusetts have been prohibited, under the Criminal Offender Record Information (“CORI”) Reform Act, from requiring a job applicant to check a box indicating that he or she has a criminal history (the “ban-the-box” law).  Employers are also prohibited from requiring applicants and employees to disclose certain criminal information, including arrests and criminal cases that did not result in a conviction; first convictions for various misdemeanor offenses; misdemeanor convictions where the date of conviction or release from incarceration occurred five or more years prior to the date of the employment application (in the absence of an intervening conviction); juvenile records; and sealed criminal records.

Under new amendments to the CORI Reform Act signed by Governor Baker on April 13, 2018, and slated to take effect on October 13, 2018, employers may not inquire into misdemeanor convictions where the date of the conviction occurred three or more years from the date of the application (unless there was an intervening conviction).  In addition, employers may not ask applicants about “a criminal record, or anything related to a criminal record, that has been sealed or expunged . . . .”  Finally, employers must include the following statement on any application “which seeks information concerning prior arrests or conviction of the applicant”: “An applicant for employment with a record expunged pursuant to section 100F, section 100G, section 100H or section 100K of chapter 276 of the General Laws may answer ‘no record’ with respect to an inquiry herein relative to prior arrests, criminal court appearances or convictions. An applicant for employment with a record expunged pursuant to section 100F, section 100G, section 100H or section 100K of chapter 276 of the General Laws may answer ‘no record’ to an inquiry herein relative to prior arrests, criminal court appearances, juvenile court appearances, adjudications or convictions.”

Employers are advised to take note of these important changes and revise their applications, and application processes, accordingly.

Massachusetts Pregnant Workers Fairness Act Takes Effect

By on April 25, 2018

As of April 1, 2018, all Massachusetts employers with six (6) or more employees are subject to the state’s new Pregnant Workers Fairness Act (the “Act”).

In light of the pre-existing federal law in this area, what is most notable about the Act is that it requires covered employers to provide:

• non-exempt and exempt employees with reasonable breaks and an appropriately private place to express breast milk;
• written notice to their employees regarding the rights provided under the Act; and
• reasonable accommodation(s) to employees on the basis of pregnancy and pregnancy-related conditions.

Reasonable accommodations may include thing like frequent or longer breaks, light duty, or a modified work schedule.

It is unlawful to retaliate against employees for requesting such an accommodation. Likewise, employers cannot deny an employment opportunity to an employee if the denial is based on the employer’s knowledge that it would have to provide the employee a reasonable accommodation, nor can an employer refuse to hire someone on the basis of pregnancy or a pregnancy-related condition, provided that person can perform the job (with a reasonable accommodation, if necessary).

Employers must provide the required written notice in a handbook, pamphlet, or other appropriate form to:

• current employees on or before the effective date of the Act;
• a newly-hired employee at the time of his or her hire; and
• any employee who notifies the employer of a pregnancy or a pregnancy-related condition, within 10 days of such notice.

Employers may satisfy the written notice requirement using the two-page Pregnant Workers Fairness Act Guidance published in part for this purpose by the Massachusetts Commission Against Discrimination (MCAD). The MCAD has also published a helpful Q&A regarding the Act.  Should you have questions concerning compliance with the Act or other matters, speak with an experienced employment attorney.

Understanding the Limitations of Chapter 93A: Pre-Litigation Attorneys’ Fees Not Recoverable

By on January 30, 2018

The Regulation of Business Practices for Consumer Protection Act, commonly referred to by its statutory chapter number, “Chapter 93A,” is a frequently utilized statute that provides individual consumers and businesses with a right to bring legal action and recover damages if they are harmed by an unfair business practice.  Under the statute, “unfair or deceptive acts or practices” or “unfair methods of competition” committed while conducting business in Massachusetts permit the harmed party to recover their actual damages, or a statutory minimum of $25 per offense (whichever is greater), and up to three times such damages for knowing and willful violations of the statute, plus an award for reasonable attorneys’ fees and the costs of the lawsuit.  Chapter 93A creates harsh penalties, with a wide-reaching scope, to deter unfair business acts, however, it does have limitations.

Previously, we explained the prohibition on Chapter 93A recovery with regard to a party’s decision to litigate a dispute, rather than settle with the opposing party.

A second limitation on recovery under Chapter 93A relates to the timing of when a party’s legal fees are incurred. Recently, the Suffolk County Superior Court considered the issue of whether pre-litigation attorneys’ fees are recoverable under Chapter 93A in Beninati, et al. v. Borghi, et al. The court awarded double damages to one of the plaintiffs under Chapter 93A. The defendants who were found liable under Chapter 93A then moved the court to reduce the attorneys’ fees award by $170,000 for fees incurred prior to the filing of the lawsuit, relating to “extensive settlement discussions.” The court agreed that pre-litigation fees are not recoverable under Chapter 93A, stating that it “is aware of no authority that permits the award of fees incurred before the litigation began and that do not bear directly on its preparation.”  Accordingly, the court excluded the pre-litigation attorneys’ fees from the award.

This case is just one example of the importance of understanding the process of litigating claims and the implications of dealing with an adverse party.  Depending on the circumstances of a dispute, it can be wise to initiate litigation sooner to ensure large portions of incurred attorneys’ fees are ultimately recoverable from the party causing the harm. To learn more about scope and application of Chapter 93A, contact an experienced Massachusetts litigation attorney.

Sports Bar Liable for Wrongful Death in Patron’s Fall Down Stairs

By on November 3, 2016

The Massachusetts Court of Appeals recently affirmed a lower court ruling that held a sports bar liable for the death of a patron who entered a door marked “Employees Only” and was subsequently killed falling down a flight of stairs, in Bernier, et al. v. Smitty’s Sports Pub, Inc. (MA Appeals Court 14-P-1967). The bar, Smitty’s Sports Pub, Inc. (“Smitty’s”), argued that the deceased, Roger Leger, was a trespasser and thus not subject to a negligence claim. The trial court disagreed.

On the night of the incident, Mr. Leger went to find the bar’s restroom. Three adjacent doors, marked “Gentlemen,” “Ladies,” and “Employees Only” were the same color and similarly marked. The “Employees Only” door opened into an unlit stairwell, with an over two-foot drop to the stairs, and while it was normally locked during business hours, the door was not locked on this particular night. Mr. Leger accidentally used the “Employees Only” door, fell down the stairs, and succumbed to injuries two weeks later.

Mr. Leger’s estate filed a wrongful death lawsuit against Smitty’s. Smitty’s argued that because Mr. Leger had no right to open a door marked “Employee’s Only” and enter the basement area, he was a trespasser and thus not entitled to a duty of reasonable care. The jury ultimately found that Smitty’s was negligent in maintaining the property, and that negligence caused Mr. Leger’s injuries (although the ultimate damage award was reduced by 20%, the amount of negligence the jury attached to Mr. Leger).

The crux of the matter here is that Mr. Luger was lawfully on the premises, and that he accidentally went through a door marked “Employees Only” does not make him a trespasser. Because he was lawfully on the premises, Smitty’s, like any landowner (especially those open to the general public), owed Mr. Luger a duty of care to act reasonably and maintain the property in a reasonably safe condition. At trial, Smitty’s had testified that the unlocked “Employee’s Only” door created a dangerous condition for anybody not knowing what lay on the other side, and that it was foreseeable that a patron may accidentally open that door, given its proximity and similarity in appearance to the restroom doors.

This case contains some important lessons for bar and restaurant owners, and the hospitality industry generally. All patrons are owed a duty of care that the establishment be reasonably free of hazards. Especially where alcohol is served, owners should expect that customers may wander around the premises and may not read every posted sign. Areas that are off-limits to customers should be very clearly noted, if not locked or otherwise physically inaccessible. Smitty’s ran into problems here because a door that should have been locked was not, and that door’s proximity to the restrooms, areas patrons are expected to go, was not reasonable given the hazard behind the door. All business owners should review the layout of their establishments and ensure that patrons may only access areas they are permitted to enter.