2014 Statutes Increase Employer Obligations

By Jack K. Merrill, Esq.

In prior years, employment law changes came primarily from courts and could reasonably be characterized as adjustments. In 2014, however, Massachusetts enacted several new laws that will have major effects on employers.

The changes will bring increases to the minimum wage rate, mandatory sick leave benefits, and new rights for domestic workers. When the permanent creation of the Council on the Underground Economy and the early 2015 paternity leave law are considered, the landscape for employers looks substantially different.

Here’s an overview of each of the 2014 statutory changes.

Minimum Wages

Massachusetts was not the only state to raise the minimum wage rate last year, and the Commonwealth’s approach will be long-lasting. The phased increase will ultimately bring the minimum hourly rate to $11 on January 1, 2017. The rate went to $9 on the first of this year and will increase to $10 on January 1, 2016. Tipped employees also got increases, to $3/hour in 2015, $3.35 next year and $3.75 in 2017. In addition to these minimums, tipped employees must receive enough in tips to bring their total hourly earnings to the applicable minimum rate. Any shortfall must be made up by employers. [Read more…]

New Sick Leave Law Covers All Employers

The Statute Approved by Voters in November Requires
Employers to Provide Sick Leave Benefits by July 1, 2015

By Jack K. Merrill, Esq.

Though the process was unusual, the result is the same for employers – new obligations to workers. The sick leave initiative approved by voters on November 4 mandates benefits to all employees in Massachusetts and sets standards to comply with.

While most employers already offer sick leave benefits, the new law changes the playing field in important ways. Prescribed sick leave and job protections will be mandatory when it takes effect next July 1, and guidelines for leave use must be met. Regardless of current policies, all employers need to review their practices for statutory compliance. Most will be forced to make adjustments.

Part of the reason for this is uncertainty whether current policies will satisfy the law’s requirements. Part relates to specific conditions under which leave must be made available. And part derives from the grant of authority to the Attorney General’s office to make new rules.

The best approach, then, may be for employers to scrap their current policies and implement new ones designed to meet the specifics of the voter initiative. Doing so is easy enough, though adjustments might be necessary once the Attorney General implements its anticipated regulations. For now, employers should ensure that their sick leave policies include the following elements. [Read more…]

Changes on Horizon for Noncompetition Agreements?

As he Prepares to Leave Office, Gov. Deval Patrick Hopes his Second Proposal to Restrict the Use of Restrictive Covenants will One Day become Law

By Jack K. Merrill, Esq.

If the governor gets his way, his legacy will include restrictions on noncompetition agreements that, he hopes, will give an economic boost to the Commonwealth by removing impediments to growth. The question is whether Deval Patrick’s current proposal will fare any better than the first one he filed, which died without a vote this summer.

Mr. Patrick’s current bill is, he says, adjusted by lessons he learned during a legislative go-round that followed a noncompetition bill he filed earlier this year. Then, the governor proposed a ban on the agreements. Now, he’s hoping to simply enact what he sees as a balanced approach that would allow restrictive covenants when certain conditions are met.

Buried within the proposal – which is unlikely to be enacted during Mr. Patrick’s final term as governor because the legislature is not formally in session – is the underlying question, “why?” The governor’s answer is that non-competes impede economic growth by restricting employee movement. But while it’s easy to see how banning them might affect this perceived problem, it’s less clear whether procedural limits on them will do so.

To be sure, the governor’s current plan will not eliminate non-competes in Massachusetts. Indeed, it appears unlikely that it will even curtail their use. While Mr. Patrick would ban restrictive covenants for some employees – anyone who is not exempt from overtime laws – those affected by the exemption will likely be lower-level workers who are not often the subject of enforcement actions anyway. For others, non-competes will be allowed, just as they are today, if employers comply with a few simple rules. [Read more…]

Minimum Wage Increases Are on the Way

The Legislature made Quick Work of Conflicting Bills to Increase the Massachusetts Minimum Wage, which will Rise Annually and Reach $11 per hour by 2017

By Jack K. Merrill, Esq.

For the first time since January 2008, the Massachusetts minimum wage is rising. This time, legislation signed in June by Gov. Deval Patrick will hike the rate more substantially than in the past, from the current $8 per hour to $11 as of January 1, 2017.

The new baseline appears to be part of a nationwide trend to increase minimum wages. More than 30 states have considered rate increases in 2014, and Massachusetts is among 10 to enact them so far. When the $11 threshold is reached, the state’s minimum wage may be the highest among all states, though Washington D.C., which also raised its rate in 2014, will be at $11.50/hour by mid- 2016.

A minimum wage rate increase movement has developed amid protests by low wage earners across the country. In Boston, fast food workers led 2013 demonstrations that sought a rate increase to $15 per hour. While politics continues to prevent the federal government from moving its rate from $7.25/hour, state governments do not face the same problem. In Massachusetts, the minimum rate must remain at least 50 cents higher than the federal rate under the recently passed bill.

The Massachusetts increase begins to take effect on January 1, 2015, when the minimum rate increases to $9/hour. The rate will go to $10 on January 1, 2016, then to $11 a year later. In addition, the minimum hourly rate for tipped employees will increase from the current $2.63 to $3.75 by 2017. That class of employees, who are common in restaurants and other service businesses, must receive enough tips to bring their wages to the applicable minimum rate. Any deficiency must be made up by their employers. [Read more…]

Massachusetts Employment Law Review, 2013

The Year’s Most Important Employment Decisions in Massachusetts Resulted in a Broad Expansion in Application of the Wage Act, Adoption of the Principle of Associational Discrimination, and a Nugget for Employers: Power to Enforce Class Action Waivers

By Jack K. Merrill, Esq.

2013 brought a slew of important employment law decisions in Massachusetts that largely favor the employee’s side of legal arguments. While employers continue to hold broad power to deal with workers, they will face  broader application of wage and other rules going forward.

The most significant decisions concern the Wage Act, which mandates the timely payment of earnings to employees. Cases under the Act and other wage laws, such as ones governing overtime pay and tips, are among the most common of all employment lawsuits. Plaintiffs and their lawyers commonly use the Act’s triple damages and legal fee provisions to wrestle big settlements from employers, even when they think they did nothing wrong. [Read more…]

Wage And Hour Audits

Employers are Effectively Powerless to Prevent State or Federal Authorities from Accessing Employee Work Schedules, Pay Histories and other Records, and Unprepared Companies are Vulnerable to Hefty Back Pay Orders and Penalties

By Jack K. Merrill, Esq.

It could be triggered in a variety of ways. A disgruntled employee complains. The government is concerned with industry practices. A stray remark reaches the wrong ears.  However a wage and hour audit starts, it forces employers to open their books and exposes them to potentially large back pay orders and fines.

Audits aimed at enforcing a plethora of wage and hour rules are common. They pose huge risks for unprepared employers, who may be hit with damage orders in the tens of thousands or higher. Defending against damage orders requested made by state and federal investigators is difficult and, in many cases, simply not practical. The best defense against an audit, then, is compliance with all wage laws.

Auditors cannot, after all, find fault with employers who properly pay their workers and maintain their records. Ensuring that wage laws are followed can thus immunize a business from audit risks. Doing so should be part of every company’s regular business practices.

To illustrate this point, a review of governmental authority and a look at the experiences of others are helpful. Here’s an overview of how audits work and where they may lead. [Read more…]

Massachusetts Child Support Guidelines – Effective August 1, 2013

Massachusetts has revised the Child Support Guidelines with the new guidelines taking effect on August 1, 2013. The guidelines adjust the formula for child support and provides judges with more use of their discretion and takes into account the parenting plan.

Read the new Massachusetts Child Support Guidelines.

Divorce and the Business Owner: Protecting the Business

Some marriages may last for decades, others just a few years. No matter how long a marriage lasts, divorce can have a profound effect on a business, unless the business owner took steps ahead of time to minimize the impact of divorce.

One of the best ways to minimize the impact is with a prenuptial agreement. In the event of divorce, a prenuptial agreement can prove invaluable in protecting a business and its assets. Massachusetts considers a variety of factors when deciding how to divide a marital estate, and a prenuptial agreement can help protect a business that would not otherwise be protected. In order to ensure that a prenuptial agreement will be upheld, it is important to consider the following factors:

  • Both parties should enter into the agreement willingly.  Neither party should feel pressured to accept the terms of the agreement.
  • Full financial disclosure must take place on both sides.  This includes an exchange of financial information including assets, liabilities, salary, etc.
  • Both parties should have their own attorneys, or be given the opportunity to seek independent legal advice.
  • The terms of the agreement must be fair and reasonable at the time of execution and at the time enforcement is sought. [Read more…]

How Do Divorce Modifications Work In Massachusetts?

At the time of your divorce, you likely address issues regarding child support, custody, health insurance, college education costs, and division of property. However, not all agreements and judgments contemplate the future, or others go through changes that warrant alterations to an original agreement or judgment. This is why some people need to return to court to modify prior agreements or judgments. It is important to learn how these modifications work.

Change of Circumstances

One of the most important things to know is that you must have a material change of circumstances to return to court regarding a modification. This change of circumstances can equal a major move, a job change that affects the current custody arrangement or a change in income which affects a support order. Talk to a qualified attorney first to determine if your circumstances warrant a modification to avoid unnecessary time in court.

What Can Be Modified?

The Separation Agreement dictates what provisions may be modified in the future.  These provisions are known as merging.  The most common provisions of an agreement that merge are child related issues, health insurance, and possibly alimony.  Provisions that do not merge are called surviving provisions.  Surviving provisions are not modifiable, even due to a change in circumstances.  The most common surviving provision in an Agreement is the property division. [Read more…]

Discrimination At Job Interviews

To Avoid Discrimination Lawsuits, Employers Should Be Familiar
With the Types of Questions They Can and Cannot Ask Their Job Applicants

By Jack Merrill
Most employers know it is illegal to discriminate against workers based on age, gender, race, disability or other characteristics. What some don’t realize is that asking the wrong questions on job applications and in interviews can also lead to charges of illegal discrimination.

Trouble in this area is easy to find. Even innocent questions are sometimes off limits. Asking the wrong ones can lead to discrimination lawsuits, even when the hiring decisions at issue are based on legitimate qualifications.

“What is your maiden name?” “What languages do you speak?” “Do you have children?” “Can you send a photograph with your job application?”

These questions and many others elicit information that employers cannot seek from applicants. Though an interviewer may not be thinking about discriminating when asking them, the questions suggest otherwise. They can, then, lead to an MCAD or other suit in which an employer will be forced to justify its hiring decision against a claim that it was discriminatory. [Read more…]