Department of Labor’s Final Rule on Overtime Raises Minimum Salary Level to $35,568

Vehicles Stopping In Front Of Pedestrian LaneOn September 24, 2019, the U.S. Department of Labor issued a final rule significantly increasing the minimum salary level for the “white collar” exemptions to the Fair Labor Standards Act (“FLSA”).  Absent a legal challenge, the new threshold will be effective on January 1, 2020.

Under the final rule, the minimum salary level for exempt executive, administrative, and professional employees will increase from $455 a week ($23,660 annualized) to $684 per week ($35,568 annualized). Employers will be permitted to pay up to 10% of the minimum salary level in commissions, bonuses, and other non-discretionary incentives, provided that those non-discretionary payments are made at least annually or more frequently.  If the incentive payments fall short by any amount in any given 52 week period, the employer has a single pay period to make a “catch up” payment to ensure that the employee will receive the full $35,568 for the year. A failure to ensure that the employee has earned the minimum salary level would entitle that shorted employee to overtime pay for the entire prior year.

The final rule also increases the total annual compensation required to meet the test for a highly compensated employee, who is exempt from overtime requirements largely on the basis of total compensation paid, from $100,000 to $107,432. While nondiscretionary bonuses and incentive payments (including commissions) may be counted toward the total annual compensation requirement for a highly compensated employee, the highly compensated employee must still receive the standard salary requirement of $684 per each week on a salary or fee basis.

Note that there are special salary tests for Puerto Rico, the Virgin Islands, Guam, the Commonwealth of the Northern Mariana Islands, American Samoa, and employees in the motion picture producing industry.

Beck Reed Riden LLP is Boston’s innovative litigation boutique. Our lawyers have years of experience at large law firms, working with clients ranging from Fortune 500 companies to start-ups and individuals. We focus on business litigation and employment. We are experienced litigators and counselors, helping our clients as business partners to resolve issues and develop strategies that best meet our clients’ legal and business needs – before, during, and after litigation. We’re ready to roll up our sleeves and help you. Read more about us, the types of matters we handle, and what we can do for you here.

 

Concise Guide to Maintaining an Employee’s Personnel Record

The Massachusetts personnel records law, M.G.L. chapter 149, § 52C, is lengthy and quite dense, and it leaves most who read it confused as to what must and should be included in (or excluded from) an employee’s personnel record.

It’s impossible to create a one-size-fits-all solution to cover every possible personnel-record-related scenario that might arise. But the list below is designed as a concise tool to assist employers and human resources professionals in making the necessary day-to-day determinations about what information to maintain in an employee’s personnel file.

For any questions regarding this list or other employment-related issues, please do not hesitate to reach out to us.

Personnel Files: What to Include and Exclude

Include:

  • Basic Employee Information (name, address, phone number, emergency contact)
  • Employment/Orientation Records
    • Resume and/or Job Application
    • Offer of Employment
    • Job Title and Description
    • Handbook Acknowledgement
    • Consent Forms for Background Check and/or Drug Testing
  • Employee Contracts/Agreements (g., noncompete agreement, non-disclosure agreement)
  • Performance Records
    • Performance Evaluations
    • Self-Evaluations of Performance
    • Disciplinary Warnings
    • Performance Improvement Plans
    • Notes on Oral Performance Counselings
    • Information that Has Been or May Be Used to Negatively Affect the Employee’s Job
  • Training Records
    • Harassment Training Acknowledgment
    • Records of Other Job-Related Training
  • Compensation Records
    • Rates of Pay, Salary, or Commission
    • Other Compensation Paid (g., bonuses)
  • Termination Records
    • Termination Notice
    • Resignation Letter
    • Documentation of Involuntary Termination
    • Exit Interview
    • Separation Agreement
    • Confirmation of Payment of Wages on Separation Date (for Involuntary Terminations)
    • Documents Regarding any Claim for Unemployment Benefits

Exclude and Store Separately:

  • I-9 Forms and Copies of Identification
  • Background Test Results
  • Drug Test Results
  • Medical Records Information (including FMLA certifications, requests for reasonable accommodation for a disability)
  • Payroll Records Containing Social Security Numbers, Banking Information, or Other Confidential Information (g., IRS Form W-4, direct deposit forms, wage garnishment)
  • Workplace Complaints
  • Materials Related to Workplace Investigations
  • Personal Information About Other Employees

Beck Reed Riden LLP is Boston’s innovative litigation boutique. Our lawyers have years of experience at large law firms, working with clients ranging from Fortune 500 companies to start-ups and individuals. We focus on business litigation and employment. We are experienced litigators and counselors, helping our clients as business partners to resolve issues and develop strategies that best meet our clients’ legal and business needs – before, during, and after litigation. We’re ready to roll up our sleeves and help you. Read more about us, the types of matters we handle, and what we can do for you here.

Massachusetts Delays Contributions Toward Paid Family and Medical Leave

Late in the evening on June 11, 2019, Massachusetts Governor Charlie Baker, Senate President Karen Spilka, and House Speaker Robert DeLeo made the following joint announcement delaying by three months the start of payroll contributions to fund the state’s new Paid Family and Medical Leave benefits:

To ensure businesses have adequate time to implement the state’s Paid Family and Medical Leave program, the House, Senate, and Administration have agreed to adopt a three month delay to the start of required contributions to the program. We will also adopt technical changes to clarify the program design. We look forward to the successful implementation of this program this fall.

Prior to the announced delay, which still must be approved by the Massachusetts legislature and signed by the Governor, employers were faced with having to begin making payroll contributions on July 1, 2019, even though employees cannot begin making use of the new leave benefits until January 2021. Those contributions now have been pushed back to October 1, 2019. To ensure that the leave program remains funded at the same level despite the delay, the contribution rate will increase from 0.63% to 0.75% of wages, meaning that employees will experience considerably higher payroll deductions from their paychecks.

The new law provides employees with 12 weeks of paid family leave and 20 weeks of paid medical leave for their own serious health conditions at a rate equivalent to 80% of their wages up to half of the state average weekly wage. Thereafter, the rate falls to 50% of wages. The maximum weekly benefit will be $850. Benefits are paid out of the fund created by employer contributions. Under the law, employers are required to contribute at least 60% toward medical leave but are not required to contribute anything toward family leave. Employers are free to contribute more than the minimum amounts. It remains to be seen whether these amounts will change with the delay.

The delay will also allow the state to clarify issues in the new law regarding intermittent leave, the definition of serious health condition, and how the state law aligns with the federal Family and Medical Leave Act. Hopefully, these and other issues will be addressed in final regulations issued by the Department of Family and Medical Leave, the newly formed state agency responsible for overseeing the new law. Stay tuned for more information as things develop.

The lawyers at Beck Reed Riden are here to assist employers as the new Paid Family and Medical Leave law takes shape.

eck Reed Riden LLP is Boston’s innovative litigation boutique. Our lawyers have years of experience at large law firms, working with clients ranging from Fortune 500 companies to start-ups and individuals. We focus on business litigation and employment. We are experienced litigators and counselors, helping our clients as business partners to resolve issues and develop strategies that best meet our clients’ legal and business needs – before, during, and after litigation. We’re ready to roll up our sleeves and help you. Read more about us, the types of matters we handle, and what we can do for you here.

Department of Labor Proposes Increase to Salary Threshold for White Collar Exemptions

Related imageOn March 7, 2019, the United States Department of Labor (DOL) issued a new proposed rule that would raise the minimum salary threshold for “white-collar” employees under the Fair Labor Standards Act (FLSA).

Under the proposed rule, the minimum annual salary an employee must earn to qualify for either the executive, administrative, or professional exemption under the FLSA would increase from $23,660 ($455 per week) to $35,308 ($679 per week). At the same time, the minimum annual salary necessary to meet the definition of a “highly compensated employee” would increase from $100,000 to $147,414. The new proposed rule does not contain any changes to the primary duties employees still must perform to qualify for one of the white-collar exemptions.

In announcing the new proposed rule, Secretary of Labor Alexander Acosta stated, “At my confirmation hearings, I committed to an update of the 2004 overtime threshold, and today’s proposal would bring common sense, consistency, and higher wages to working Americans.”

The DOL last proposed an increase to the salary threshold for the white-collar exemptions in May 2016 when, under the Obama Administration, it proposed increasing the threshold to $47,476. On November 22, 2016, just before the new threshold was to take effect, the United States District Court for the Eastern District of Texas enjoined the DOL from implementing it. Since that time, the DOL has been developing the new proposed threshold.

The DOL expects to issue a final rule on the new salary threshold in January 2020. Until then, employers should remain vigilant in classifying their employees properly under the current threshold. Once a new threshold is finalized, employers should be prepared to either adjust salaries to meet the new threshold or reclassify affected employees as non-exempt.

eck Reed Riden LLP is Boston’s innovative litigation boutique. Our lawyers have years of experience at large law firms, working with clients ranging from Fortune 500 companies to start-ups and individuals. We focus on business litigation and labor and employment. We are experienced litigators and counselors, helping our clients as business partners to resolve issues and develop strategies that best meet our clients’ legal and business needs – before, during, and after litigation. We’re ready to roll up our sleeves and help you. Read more about us, the types of matters we handle, and what we can do for you here.

Massachusetts Raises Minimum Wage in “Grand Bargain”

On June 28, 2018, Massachusetts Governor Charlie Baker signed into law the “Grand Bargain” bill, that, over the next five years, will gradually raise the minimum wage to $15.00 per hour, require paid family and medical leave for Massachusetts employees, and phase-out Sunday and holiday time-and-a half pay for certain retail employees.

Minimum Wage Increase

The first minimum wage increase will take effect on January 1, 2019, at which time the minimum wage will increase from its current rate of $11.00 per hour to $12.00 per hour.  Thereafter, it will increase by 75 cents on January 1st of each year until it reaches $15.00 per hour in 2023.  Over the same five-year period, the minimum cash wage applicable to tipped workers will increase from $3.75 per hour to $6.75 per hour, with the rate of pay increasing by 60 cents each January 1st from 2019 to 2023.

Paid Family and Medical Leave

The new law also establishes one of the most generous family and medical leave programs in the nation, which will be phased in over several years.  While administrative regulations from a newly-created state agency, the Department of Family and Medical Leave, will be forthcoming and will provide more specific guidance to employers with regard to implementation of the law and obligations regarding family and medical leave, the key provisions are evident.

Effective July 1, 2019, employers must post a notice of benefits available under the act and provide employees with a similar written notice of the benefits within 30 days of the employee’s date of hire.  As of July 1, 2019, employers will also start contributing to the Family and Employment Security Trust Fund, which will fund the leave program, at a contribution rate of 0.63 % of each employee’s wages, which is subject to annual adjustment.  Employers may require employees to pay a portion of the contributions.  Employers with fewer than 25 employees in Massachusetts are not required to pay the employer share of the contributions.

Effective January 1, 2021, eligible employees will be able to take up to 12 weeks of paid family leave per benefit year and up to 20 weeks of paid medical leave per benefit year, with a maximum of 26 total weeks of paid leave per benefit year.  Employees are eligible for medical leave if they have a serious health condition.  Employees are eligible for family leave:

  1. To care for a family member with a serious health condition;
  2. To bond with a child during the first 12 months after the child’s birth or placement for adoption or foster care; or
  3. To attend to exigent circumstances arising out of a family member’s active military duty or impending call to active military duty.

Note that if leave is taken to care for a family member with a serious illness arising out of military service, up to 26 weeks of leave may be taken in a benefit year.  Paid family or medical leave under the law will run concurrently with any leave available to the employee under the Family Medical Leave Act or the Massachusetts Parental Leave Act.

After a seven-day waiting period (during which an employee can use accrued sick or vacation time), the employee will be entitled to wage replacement from the Family and Employment Security Trust Fund equal to 80% of their wages, up to a maximum of 50% of the state average weekly wage, and 50% of their wages above that amount, up to a maximum of $850 per week or an adjusted amount that equals 64% of the state average weekly wage.

The law also includes a notable anti-retaliation provision.  Retaliation against employees for exercising their rights under the new law is prohibited.  Significantly, any negative change in the terms or conditions of employment that occurs during a leave or within six months of the leave creates a presumption of retaliation.  Employer can rebut this presumption only by clear and convincing evidence of a non-retaliatory and independent justification for the change.  The law also provides for a private right of action with a three-year statute of limitations.  Available remedies include reinstatement, payment of three times the employee’s lost wages and benefits, and reasonable attorneys’ fees and costs.

Gradual Elimination of Sunday Premium Pay

Currently, the Massachusetts “blue laws” require that most non-exempt employees who work in retail establishments must be paid time-and-a-half  on Sundays and certain holidays.  This requirement will be gradually phased out over the coming years.  On January 1, 2019, the premium rate will decrease to 1.4 times the regular rate of pay.  Thereafter, it will decrease by 0.1 each January 1, until it is eliminated altogether on January 1, 2023.

Next Steps

As a result of the “Grand Bargain,” Massachusetts employers will want to prepare for the wage adjustments to minimum wage and Sunday premium pay that begin to take effect on January 1, 2019 and will continue annually until 2023.  Although the law’s provisions regarding paid family and medical leave are not fully effective until 2021, regulatory guidance is expected in 2019 and certain provisions are effective in July 2019 as well.  Employers are well advised to review their current leave policies, explore and anticipate procedures and practices to meet the leave law requirements, and remain abreast of any forthcoming guidance and regulations.

This legislative update was written by Laura Raisty of Beck Reed Riden LLP.

eck Reed Riden LLP is Boston’s innovative litigation boutique. Our lawyers have years of experience at large law firms, working with clients ranging from Fortune 500 companies to start-ups and individuals. We focus on business litigation and labor and employment. We are experienced litigators and counselors, helping our clients as business partners to resolve issues and develop strategies that best meet our clients’ legal and business needs – before, during, and after litigation. We’re ready to roll up our sleeves and help you. Read more about us, the types of matters we handle, and what we can do for you here.

New Guidance for Massachusetts Equal Pay Act Issued

In advance of a rapidly approaching July 1, 2018 effective date, the Massachusetts Attorney General’s Office has issued highly anticipated guidance concerning pay equity amendments to the Massachusetts Equal Pay Act (“MEPA”).

The guidance is available here.

he guide provides the following overview of MEPA:

In 1945, Massachusetts became the first state in the country to pass an equal pay law. But the gender pay gap persists in Massachusetts and across the country. In Massachusetts, on average, women working full time earn only 84.3% of what men earn. The gap is even larger for some women of color.

On July 1, 2018, an updated equal pay law will go into effect in Massachusetts, providing more clarity as to what constitutes unlawful wage discrimination and adding protections to ensure greater fairness and equity in the workplace. The statute, Chapter 177 of the Acts of 2016, An Act to Establish Pay Equity, amends the Massachusetts Equal Pay Act, M.G.L. c. 149, § 105A (“MEPA”).

MEPA generally provides that “No employer shall discriminate in any way on the basis of gender in the payment of wages, or pay any person in its employ a salary or wage rate less than the rates paid to its employees of a different gender for comparable work.” The law defines “comparable work” as work that requires substantially similar skill, effort, and responsibility, and is performed under similar working conditions.

Beck Reed Riden LLP’s attorneys are ready to assist employers with any questions and concerns they might have concerning this new guidance and how to comply with the MEPA amendments.

Beck Reed Riden LLP is Boston’s innovative litigation boutique. Our lawyers have years of experience at large law firms, working with clients ranging from Fortune 500 companies to start-ups and individuals. We focus on business litigation and labor and employment. We are experienced litigators and counselors, helping our clients as business partners to resolve issues and develop strategies that best meet our clients’ legal and business needs – before, during, and after litigation. We’re ready to roll up our sleeves and help you. Read more about us, the types of matters we handle, and what we can do for you here.

Reminder: Employers must use new Form I-9 by September 18 (2017)

On or before September 18, 2017, all employers must begin completing the recently updated Form I-9, Employment Eligibility Verification for each new employee hired in the United States, including citizens and noncitizens.  Form I-9 is used for verifying an individual’s identity and authorization to work in the United States.

The updates to the new Form I-9 include additions to the list of acceptable documents that employers can use to verify an employee’s identity and employment authorization. The revised Form I-9 does not change an employer’s storage and retention obligations. Form I-9 can be stored on paper, on microform, or electronically.  In addition, an employer must retain a Form I-9 for the duration of the employee’s employment and after termination for either three years after the date of hire, or one year after the date an employee’s employment is terminated, whichever is later.

Beck Reed Riden LLP is Boston’s innovative litigation boutique. Our lawyers have years of experience at large law firms, working with clients ranging from Fortune 500 companies to start-ups and individuals. We focus on business litigation and labor and employment. We are experienced litigators and counselors, helping our clients as business partners to resolve issues and develop strategies that best meet our clients’ legal and business needs – before, during, and after litigation. We’re ready to roll up our sleeves and help you. Read more about us, the types of matters we handle, and what we can do for you here.

 

Nicole Daly to Chair Panel Presentation on Employee Handbooks

On July 20, 2017Nicole Daly will be chairing a panel of attorneys at a presentation titled “Fortifying & Scrutinizing Employee Handbooks & Policies.” The program is sponsored by Massachusetts Continuing Legal Education, Inc.

According to MCLE’s description, the program will cover practical strategies for drafting, updating, enforcing, and challenging employee handbooks and policies, as follows:

“Bring-your-own-device” policies; paid sick leave; medical marijuana; and the National Labor Relations Board’s crackdown on social media and other policies . . . these are just a few of the myriad issues that employers need to keep abreast of as they draft and update employee handbooks. Veteran employment lawyers from both sides of the bar share practical tips for, and valuable insight into, drafting—and scrutinizing—employee handbooks and policies.

This highly focused program—essential for employment lawyers seeking to update or sharpen their skills, in-house counsel reviewing existing handbooks and policies, business lawyers looking for more detailed insight into employment-law issues, and general practitioners improving issue-spotting skills—provides direct access to counter-balanced experts in a small, conversational setting.

In addition to Nicole Daly, the panel will include the following speakers:

Today’s program starts at 2 p.m. and more information is available here.

Beck Reed Riden LLP is Boston’s innovative litigation boutique. Our lawyers have years of experience at large law firms, working with clients ranging from Fortune 500 companies to start-ups and individuals. We focus on business litigation and labor and employment. We are experienced litigators and counselors, helping our clients as business partners to resolve issues and develop strategies that best meet our clients’ legal and business needs – before, during, and after litigation. We’re ready to roll up our sleeves and help you. Read more about us, the types of matters we handle, and what we can do for you here.

THE GILLETTE COMPANY vs. CRAIG PROVOST, JOHN GRIFFIN, WILLIAM TUCKER, DOUGLAS KOHRING and SHAVELOGIC, INC.

Docket: CIVIL ACTION NO. 2015-0149-BLS2
Date: September 22, 2015
Parties: THE GILLETTE COMPANY vs. CRAIG PROVOST, JOHN GRIFFIN, WILLIAM TUCKER, DOUGLAS KOHRING and SHAVELOGIC, INC.
Judge: /s/Janet L. Sanders

MEMORANDUM OF DECISION AND ORDER ON PLAINTIFF’S MOTION TO DISMISS COUNTERCLAIMS

The Gillette Company (Gillette) brought this action against four former employees (collectively, the “individual defendants”) alleging that they misappropriated Gillette’s trade secrets to develop a wet shaving razor for defendant ShaveLogic, LLC (ShaveLogic). Count III of the Complaint asserts that the individual defendants violated Chapter 93A §11. They now move to dismiss that count on the grounds that the wrongdoing alleged (the misappropriation of confidential information) grew out of their employment with Gillette and that disputes arising from such a relationship are not actionable under Chapter 93A. Manning v. Zuckerman, 388 Mass. 8, 12-15 (1983). Relying on Informix v. Rennell, 41 Mass.App.Ct. 161, 162-163 (1996) (Lenk, J.), the defendants argue that the fact they were no longer employees of Gillette when they made use of the confidential information is of no consequence, since there would be no wrongdoing to complain of without the confidentiality agreement that was part of their original employment relationship. This Court finds this argument to be quite persuasive.

In opposing the motion, however, Gillette relies on Specialized Technology Resources, Inc. v. JPS Elastomeric, Corp., 80 Mass.App.Ct. 841 (2011) (Greene, J.). As in the instant case, the plaintiff there alleged that the individual defendant obtained certain trade secrets during his employment with plaintiff, then in breach of a confidentiality agreement that was part of his employment contract, misappropriated that information when he went to work for the defendant JPS. Upholding the judge’s finding of liability on the 93A clam, the Appeals Court held that the former employer-employee relationship between the plaintiff and the individual defendant “does not stand as a bar” to the chapter 93A claim and that his conduct was “actionable independent of his contractual obligations.” Id. at 847. Defendants maintain that Specialized was wrongly decided and that, if confronted with the same issue, the Supreme Judicial Court would come to a contrary conclusion. This Court is inclined to agree.

To dismiss this Count in the face of binding precedent to the contrary would not be appropriate, however. This issue is best addressed on a fuller record or even after a trial on a motion for a judgment notwithstanding the verdict if that becomes necessary. Accordingly, the Motion is DENIED, without prejudice.

/s/Janet L. Sanders
Justice of the Superior Court

Stephen Riden in Forbes on Ownership of Twitter Accounts

Stephen Riden is featured in a November 17, 2011, Forbes story titled “Who Owns Employees’ Twitter Accounts?”

The article is written by Forbes staff writer, Kashmir Hill.  It follows an earlier Forbes story covering a lawsuit filed by a company against its former employee for using a Twitter account after leaving the company.

In the lawsuit, the company, Phonedog, claims that its former employee, Noah Kravitz, established a Twitter account at the company’s request, and then used that account to promote the company’s services.

When the employee left, the Twitter account went with him.  So the company sued and is seeking damages for the alleged theft of its trade secrets, i.e., the Twitter account and its followers.

In the article, Steve discusses the importance of addressing the use of social media accounts in the employee handbook.

It’s an interesting case, and illustrates the importance of employers and employees hammering out these details in advance. “It’s much cheaper to spell this out ahead of time than to litigate it after the fact,” says Stephen Riden, a partner at Beck Reed Riden LLP, who specializes in employment law. He points to Dell’s social media policy as a good example of this, calling it “forward-thinking.”

Click here to read more about the intersection of social media and employment disputes.

About Us

Beck Reed Riden LLP is Boston’s innovative litigation boutique. Our lawyers have years of experience at large law firms, working with clients ranging from Fortune 500 companies to start-ups and individuals. We focus on business litigation and labor and employment. We are experienced litigators and counselors, helping our clients as business partners to resolve issues and develop strategies that best meet our clients’ legal and business needs – before, during, and after litigation. We’re ready to roll up our sleeves and help you. Read more about us, the types of matters we handle, and what we can do for you here.

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