Vision Payroll

This week’s question comes from Marco, a small business owner in Massachusetts. I terminated an employee. He wants to get his paycheck before he leaves the building. How quickly must I pay a terminated employee? Answer: Under Massachusetts General Law (MGL) c. 149 §148, “any employee discharged from such employment shall be paid in full on the day of his discharge.” Therefore, Massachusetts employers should pay terminated employees on the day of their termination. Contact Vision Payroll if you have any questions on paying terminated employees.

In Mullally, et al. v. Waste Management of Massachusetts, Inc., SJC-10181 (Mass. 11/6/2008), the Supreme Judicial Court of the Commonwealth of Massachusetts (SJC) ruled that the defendant (Waste Management) violated Massachusetts law by “calculating overtime wages using a regular hourly rate less than the prevailing wage eligible employees must be paid.” The employees who filed suit were required under Massachusetts General Laws (MGL) c. 149, §27F to receive the prevailing wage rate for “waste disposal employees performing under municipal contracts.” Waste Management had devised a formula under which employees always received the prevailing wage or higher when averaging the hourly rate for straight time and overtime. The SJC ruled that Massachusetts law (MGL c. 151, §1A) requires employees to receive at least the prevailing wage in cash and allowed benefits for straight time and one and one half time the prevailing wage in cash and allowed benefits for overtime. Allowing Waste Management’s formula would evade “the economic disincentive to have an employee work more than forty hours a week” since there would be little or no overtime premium paid regardless of the number of hours worked. The SJC remanded the case to Massachusetts Superior Court for further proceedings to determine the amount of damages. Vision Payroll strongly recommends that you review all overtime calculations with your labor attorney to ensure compliance with all applicable federal and state laws.

This week’s question comes from Harold, a business owner. I own a business in Massachusetts. Can I switch from a weekly to a bi-weekly pay period? Answer: Under Massachusetts law it is allowable to change to a bi-weekly pay period as long as employees are provided with written notice. MGL c. 149, §148 requires written notice to each employee at least ninety days in advance of the first bi-weekly check. Contact Vision Payroll if you have questions on pay frequency changes.

On July 13, 2008, a new law went into effect mandating treble damages for wage and hour violations by Massachusetts employers. Prior to passage of Chapter 80 of the Acts of 2008, triple damages were allowed, but treated as discretionary by state judges. Generally, employers who acted in good faith were not assessed treble damages under the old law. Now, employers’ intent is irrelevant and three times the lost wages or other benefits will be awarded on all wage and hour lawsuits where the plaintiff prevails. Employers will also be required to pay “the costs of the litigation and reasonable attorneys’ fees.” We strongly recommend that all Massachusetts employers review their wage and hour policies and consult with their attorneys if they have any questions.