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New Year, New Massachusetts Laws!

Republished from Pomeroy Law, Amesbury, MA
January 26, 2016

pomeroylaw_feb2016Welcome 2016! Another year, and some new laws to look forward to in Massachusetts. There are a couple employment law changes in Massachusetts that took effect on Jan. 1, and one proposed federal regulation change that will likely be implemented in 2016.

This is always a great time of year to review your personnel policies and handbook for the different changes in the laws that may affect your business. Here are three reasons to do such a review.

As you know, the Massachusetts Earned Sick Time Law that requires employers of employees who work primarily in Massachusetts to provide their workers up to 40 hours of earned sick time. Whether it's paid or unpaid sick leave depends on the number of employees. This law went into effect in July 2015, but the attorney general announced a safe harbor period for employers with preexisting time-off policies that met certain requirements. That safe harbor period expired Jan. 1 and all employers must now have sick time policies that are fully compliant with the Earned Sick Time Law.

The second law change for Massachusetts involved a wage and hour law. Effective Jan. 1, the minimum wage in the state increased from $9 to $10 per hour. For tipped employees, the service hourly rate increased to $3.35 per hour. This service rate applies to employees who receive tips of more than $20 per month, and the average hourly tips when added to the service rate equals the minimum wage. This is the second of three wage increases that were enacted by the Legislature. On Jan. 1, 2017, the third increase will take effect, increasing the minimum hourly wage to $11 per hour and the service rate to $3.75 per hour.

I also want to warn about an upcoming change in 2016 that will require all states to comply with the expected change in the Fair Labor Standard Act’s regulations. The Department of Labor previously announced a proposed rule change in 2015 that is expected would be finalized this year. While not yet effect as of this week, the amendment to the regulations will likely require employers to quickly react to the change as it relates to the overtime regulations.

The FLSA provides certain exemptions from minimum wage and overtime for executive, administrative, professional and computer employees, also known as “white collar” exemptions. One of the requirements to qualify for this exemption is that the employer pays the exempt employee a certain minimum set salary amount (salary basis). Under the proposed rule, the salary basis for these exempt positions under the FLSA will increase to $50,400 a year, or $970 per week. This more than doubles the current minimum salary basis of $455 per week or $23,660 per year. The rule change also provides for a mechanism to update the salary and compensation levels in the future.

When this rule is finalized and adopted by the Department of Labor, any employee in a previously qualifying exempt position will need to be paid the $50,400 per year salary basis in order to continue to be eligible for the white collar exemption. If the employee no longer qualifies for the exemption, that worker will need to be paid in accordance with the minimum wage and overtime requirements of the FLSA and any applicable state laws.

While this proposed regulation change is not in effect at this time, the Department of Labor is expected to enact it this year and it may come a little too quickly for some businesses. This change will likely impact many businesses. In anticipation of this rule change, business owners and managers should consider reviewing job positions classified as exempt under the FLSA to determine if they may be impacted by this rule change.

Business owners should review their policies and practices in view of these law changes and consult with an attorney to understand the implication that these changes in the state and federal laws will have on their businesses.

Maureen Louise Pomeroy, Pomeroy Law
100 Main Street, Amesbury, MA 01913
978.358.7550
www.pomeroy-law.com



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