As a follow up to our blog on 11/11/2014, effective July 1, 2015, Massachusetts employers will be required to provide sick time to all employees, either paid or unpaid. An employee will earn one hour sick time for each 30 hours worked. Employees who are deemed exempt will be presumed to work 40 hours per week. An employee’s rate of earning will be capped at 40 hours earned sick time per calendar year. It is important to note that under the law, employees may carry forward earned but unused sick time from one calendar year to the next but may not use more than 40 hours of sick time in any single calendar year. All employees who work full time, part-time and temporary (with some exceptions) are covered under the new law. New employees will begin to earn sick time (whether paid or unpaid) upon their hire but may not use earned sick time until they have worked for the employer for at least ninety calendar days. All employers must provide 40 hours of sick time, however, only employers who employ 11 or more employees must provide paid sick time. Finally, employers must remember that the rate of pay is the same for sick time as it is for regular time. If you have any questions regarding this new law, please feel free to contact an attorney at Epstein, Lipsey & Clifford, P.C.
On January 7, 2015, Governor Deval Patrick signed into law the Paternal Leave Law (“PLL”), which replaces the Massachusetts Maternity Leave Law (“MMLL”). The new PLL makes paternity leave gender neutral which was not the case under the old MMLL. This removes the confusion that has existed for employers since 2008 when the Massachusetts Commission Against Discrimination declared that it was unlawful for employers who refused to provide a male employee with paternity leave. The new PLL provides certainty. Employers must provide leave for the birth or adoption of a child for female and male employees alike. The new PLL goes into effect in Massachusetts on April 7, 2015. If you or your company has any questions about the new PLL, call Epstein, Lipsey & Clifford, P.C. at 781-829-9100.
Just a reminder that as of January 1, 2015, the minimum wage in the Commonwealth of Massachusetts increased from $8.00 to $9.00 per hour. As you will recall, the Massachusetts legislature enacted a bill last June calling for three annual one dollar increases in the regular minimum wage. On January 15, 2016, the minimum wage will once again increase to $10.00 per hour and then again by $1.00 on January 1, 2017 to $11.00 per hour. The minimum wage law applies to all employees except those being rehabilitated or trained in charitable, educational religious institutions; members of religious orders; agricultural, floricultural, and horticultural workers; those in professional services; and outside salespersons not reporting to or visiting their office daily. Failure to pay the minimum wage can result in civil and/or criminal sanctions. If you have any questions or concerns contact Attorney Scott J. Clifford 781-829-9100.
Effective July 1, 2015, Massachusetts employers with eleven or more employees to accrue and use up to forty hours of paid sick leave per calendar year. Employers with fewer than eleven employees will be required to allow their employees to earn and use up to forty hours of unpaid sick leave. The law applies to full-time, part-time, temporary and seasonal workers. Time off designated as vacation time and/or personal time will not necessarily satisfy the new law. The days must be designated in the paid time off bank as sick time in order to comply with the new law. Employers are not required to pay unused sick time upon separation from the business. The new law does not override any collective bargaining agreement, contract or benefit plan with more generous provisions. Employees will earn a minimum of one hour of sick leave for every 30 hours worked with maximum of forty hours in a calendar year. Employees are permitted to carry over any unused sick time into the following calendar year. As with the Massachusetts Wage Act, the new law provides a private cause of action for aggrieved individuals that could result in recovery of mandatory triple damages and attorneys’ fees. It is therefore very important for all employers to become familiar with the new law prior to its enactment. If you have any questions contact Attorney Scott J. Clifford at 781-829-9100.
Employers should be aware and prepare for the anticipated overhaul of the Federal Labor Standards Act (FLSA) which is expected to occur before the end of next year. These sweeping changes could result in mandatory overtime payments to millions of employees who are current excluded from FLSA protection. Currently, certain classes of workers under the FLSA are excluded from receiving overtime pay from their employers for all hours in excess of forty (40) hours per week. It is anticipated that many employees who are currently excluded will become eligible for overtime pay under the changes being discussed. Employers would then be required to pay these employees 1.5 times their employees’ regular hourly rate for all hours worked over forty (40) hours. As debate continues with the expected changes, we will keep you posted. If you have questions regarding this issue or similar issues please contact us at Epstein, Lipsey & Clifford, P.C.
Many businesses require employees to sign non-compete agreements as a condition of employment. These businesses generally view non-competes as necessary to protect company trade secrets and/or customer good will. However, some critics believe the use of non-competes has been widely abused and needs to be regulated by statute. Others believe non-competes are unnecessary altogether, stifle the state’s economy, and should be banned entirely, as they are in California. Other critics argue that non-competes stifle creativity in technology and drain talent from our state.
Several bills have been filed in the Massachusetts legislature to restrict the use of employee non-competes. These bills range from a California-like ban on non-compete agreements to legislation establishing rules governing their use. Although these legislative efforts have been unsuccessful to date, momentum appears to be building for some action in this area. Indeed, the Patrick Administration has now declared its strong support for restrictions on the use of non-competes.
This is definitely worth watching for employers and employees alike. If you have questions regarding non-competes, call one of our attorneys at Epstein, Lipsey & Clifford, P.C. to discuss.
Tis the season – instead of the twelve days of Christmas, these are the twelve things every corporation or LLC should keep in mind in order to avoid someone piercing the corporate veil and suing you individually: 1.) common ownership; 2.) pervasive control by one person; 3) confused intermingling of business activity, assets and management; 4.) thin capitalization; 5) nonobservance of corporate formalities; 6.) absence of corporate records; 7.) no payment of dividends; 8.) insolvency at the time of litigation; 9.) siphoning away of corporate assets by the dominant shareholder; 10.) nonfunctioning officers and directors; 11.) use of the corporation for transactions of the dominant shareholder; and 12.) use of the corporation in promoting fraud.
As if running a small business wasn’t complicated enough, employee regulations can cause confusion and futility. For example, how many small business owners understand the difference between an independent contract worker and an employee (as it relates to federal law, IRS regulations, and Massachusetts state law)? How does the Massachusetts Wage Act regulate how you conduct your business? And did you know that when an employee is discharged, they must be paid any wages and accrued beneifts owed immediately? No waiting for the payroll company to cut the check.
Not knowing is costing business owners dearly as the penalties in place are steep and claims are rising. The penalty to business owners is three times the amount of the claim, plus attorneys’ fees.
That’s why it’s vital for small business owners to understand the facets of employment law issues as they relate to their business. For more information about these laws, and how certain scenarios could play out for small business owners, contact Scott Clifford at 781-829-9100.
A recent Boston Globe article noted in its headline, “Fines jump for labor law violations in Mass.” (September 5, 2013). The article claims that the unsteady economy is somewhat to blame for the number of violations rising, but it also serves as a warning that the state is cracking down on businesses that try to circumvent labor laws.
These violations include issues such as not paying minimum wage, not paying overtime, and classifying workers as independent contractors instead of employees. While many of these business violators were found within the construction industry, they were not limited to this realm; in fact, violators were noted in a range of business sectors.
Although some violations were no doubt deliberate, others may have been caused by a lack of knowledge in appropriate legal classifications. Either way, any businesses caught violating labor laws have been hit with costly fines.
The Globe reports that $18.86 million was collected in recovered funds (“fines, back wages, and other restitution from violations of state tax and labor laws”) from March 2008 to June 2011, a 40-month period. During a much shorter period – July 2011 to December 2012 – recovered funds increased to $21.39 million. Given this, it seems obvious that the state is much more serious about stopping labor law violators.
For more information about what businesses need to know about labor laws, and to avoid being hit with costly violations, contact Attorney Scott Clifford at 781-829-9100 or visit www.elclaw.com.
In 2004 Massachusetts passed a restrictive independent contractor law that many business leaders are hoping to reform. As it stands now Massachusetts uses a three-part test for determining independent contractor status, and begins with the presumption that an individual is an employee, not an independent contractor. The employer bears the burden of proof that the individual was properly classified. To be properly classified as an independent contractor, each of the following criteria must be met:
a) the individual is free from control and direction in connection with the performance of such services.
b) the service is performed outside the employer’s usual course of the business.
c) the individual is customarily engaged in an independently established trade, occupation, profession or business of the same nature as that involved in the service performed.
In addition Massachusetts employers are subject to federal IRS common law test. The presumption of employee status and the strict three-part test makes establishing an independent contractor relationship, for unemployment compensation purposes, more difficult than the IRS common law test.
If a company is found in court to have misclassified workers, it faces triple damages on top of attorney fees.
There is movement towards reform and if and when the law changes we will keep readers notified on the changes.