Which issues would you most highlight to someone new to your state?
Massachusetts is an organized-labor-friendly and employee-friendly state. Unions and their causes generally have the support of the city of Boston’s administration and most state legislators. Further, each year the legislature considers laws that are favorable to employees. The office of the state attorney general (which enforces many wage, hour and leave laws) is also active. Finally, in recent years there has been an increase in efforts to bring about changes in employment law through the initiative petition process, which allows for a direct vote by the electorate.
What do you consider unique to those doing business in your state?
The Massachusetts legislature has become particularly active in the employment law sphere in recent years. This has resulted in, among other things:
- a comprehensive pay equity law (which took effect on July 1, 2018);
- a major change in the state’s law as to non-compete agreements (which took effect on October 1, 2018); and
- a so-called ‘grand bargain’, which reflected a compromise between business and employee advocates and which resulted in scheduled increases in the state’s minimum wage and the creation of a state-administered paid family and medical leave program.
Employers should actively monitor legislation and regulations at the state level. Another challenge is the high cost of living, particularly housing in eastern and (to a somewhat lesser extent) central Massachusetts. This can cause difficulties in recruiting workers to the state. On the plus side, because of the many higher-education institutions in the state, there is a large pool of educated workers. Also, there is a definite interest on the part of state officials in attracting new business to Massachusetts.
Is there any general advice you would give in the labor/employment area?
Pay close attention to wage and hour issues, including independent contractor classification issues and payment of wages upon termination. The state has a mandatory triple-damages provision for non-payment of wages and therefore even minor mistakes can result in large liabilities.
Proposals for reform
Are there any noteworthy proposals for reform in your state?
There were a lot of changes in 2018 (see “What do you consider unique to those doing business in your state?”). However, at the time of writing, there is nothing noteworthy on the horizon for 2019.
What are the emerging trends in employment law in your state, including the interplay with other areas of law, such as firearms legislation, legalization of marijuana and privacy?
See “What do you consider unique to those doing business in your state?” above.
In addition, Massachusetts has legalized recreational marijuana, although employers are still permitted to ban its use or possession in the workplace. (Massachusetts already has a medical marijuana statute.) The state has strict firearm restrictions and there does not appear to be any significant move to change these.
What state-specific laws govern the employment relationship?
There is a broad Anti-discrimination Law (Mass. G.L. c. 151B) which covers all employers with six or more employees. There is also a strong Payment of Wages Law, mandating payment of all wages due to an employee (including those accrued through unused vacation time) at the time of termination. Treble damages for violation of this law are mandatory. Further, there are a number of laws relating to time off and leave of absence. For example, there is a mandatory Sick Leave Law, a Domestic Violence Leave Law, and a “Small Necessities” Leave Law (which allows time off for medical appointments, school activities, and to care for parents). Finally, employees will soon have a state-administered paid family and medical leave. Employers will begin contributing to this program on July 1, 2019 and benefits will begin to be paid on January 1, 2021.
Who do these cover, including categories of workers?
The wage laws apply to most private employers. The Anti-discrimination Law governs employers with six or more employees. The Sick Leave Law applies to all employers, but leave must be paid only for employees working for employers with 11 or more employees. The Domestic Violence Leave Law applies to employers with 50 or more employees. The Small Necessities Leave Law has the same eligibility requirements as the federal Family and Medical Leave Act. The new paid family and medical leave program appears to apply to all employers
Are there state-specific rules regarding employee/contractor misclassification?
Yes. G.L. c. 149, Section 148B is among the stronger state laws regarding misclassification. Generally, all work is presumed to be performed by employees (as opposed to contractors) unless certain specific requirements have been met. To be deemed an “independent contractor”, the following criteria must be met:
- The work must be free from control and direction, both under contract and in fact;
- The work must be outside the usual course of the employer’s business; and
- The worker must be customarily engaged in an independent trade, occupation or profession.
Must an employment contract be in writing?
Are any terms implied into employment contracts?
An implied covenant of good faith and fair dealing is part of all employment contracts. This has been interpreted to prohibit terminations in violation of well-defined public policy, or terminations designed to deprive employees of commissions or other earnings due to past services. With respect to the public policy exception, Massachusetts courts have been relatively restrictive regarding the types of public policy which give rise to a legal claim. Further, if the public policy is set forth in a statute which contains its own cause of action, the employee will be limited to proceeding under the statute.
Are mandatory arbitration agreements enforceable?
Generally, yes, although arbitration provisions must be drafted with care if the intention is for them to have broad scope. To be enforceable regarding statutory claims, the arbitration provision should make at least some reference to either the statute (i.e., the Massachusetts Wage Act) or type of claim (i.e., discrimination claims). This area of the law is somewhat dynamic, so employers should ensure that the most recent judicial pronouncements have been reviewed before drafting arbitration provisions. Private arbitration agreements generally do not deprive state investigatory agencies (e.g., the Massachusetts Commission Against Discrimination or the Office of the Attorney General) of their right to investigate.
How can employers make changes to existing employment agreements?
No specific requirements exist in this regard. The terms of the agreement should establish the means of amendment. Except with regard to the introduction of non-compete agreements (where additional consideration is required for agreements entered into on or after October 1, 2018), continued employment is generally adequate consideration to make changes in terms of an at-will employment relationship.
What are the requirements relating to advertising open positions?
All advertisements must be non-discriminatory on the basis of race, age, gender and other protected categories. Advertisements must specifically note whether applicants are sought to replace workers engaged in a labor dispute.
What can employers do with regard to background checks and inquiries?
(a) Criminal records and arrests
An employer cannot make a criminal records inquiry in an initial application for employment. Thereafter, the employer may make inquiries regarding conviction of felonies (for any time period) or misdemeanors (within five years). An employer must conduct criminal record searches in a non-discriminatory manner. Employers cannot pick and choose which candidates to perform criminal records checks on. Further, any criminal records checks which utilize state criminal history records must comply with state law.
(b) Medical history
Most pre-employment medical inquiries and examinations are barred by the state’s Disability Discrimination Law. An employer can condition employment on a post-offer medical exam.
(c) Drug screening
Pre-employment drug tests are permissible if conducted with adequate procedural and privacy protections and in a non-discriminatory manner. Post-employment, reasonable suspicion and post-accident testing is also permitted. Random testing is permitted for employees in “safety sensitive” positions, and for those subject to random testing under federal law.
(d) Credit checks
Massachusetts has its own version of the federal Fair Credit Reporting Act (FCRA). In most situations, compliance with the FCRA will equal compliance with state law.
(e) Immigration status
No inquiries are stipulated beyond those allowed or required by federal law.
(f) Social media
There are no statutory restrictions. Legislation has been introduced to prohibit employers from requesting applicants’ social media passwords, but it is yet to be enacted.
Massachusetts prohibits employers from requesting or requiring applicants and employees to take lie detector tests. A notice to this effect must be included on employment applications. Further, effective July 1 2018 as part of the pay equity law, employers are not permitted to ask the wage and salary history of job applicants.
Wage and hour
What are the main sources of wage and hour laws in your state?
Mass. G.L. c. 149 and 151.
What is the minimum hourly wage?
As of January 1, 2017, the minimum hourly wage is $11 ($3.75 for tipped employees). This will increase to $12 per hour on January 1, 2019 and an additional $0.75 per hour each January thereafter, until a $15 per hour minimum wage is reached in January 2023. The tipped employee rate will increase to $4.35 on January 1, 2019 and then $0.60 per hour per year until a figure of $6.75 is reached on January 1, 2023.
What are the rules applicable to final pay and deductions from wages?
Employees must be paid all wages owed (including accrued vacation pay) on termination. Deductions from pay are allowed only if required by law or if authorized by the employee. These provisions are generally not waivable by employees.
Hours and overtime
What are the requirements for meal and rest breaks?
Employees who work six hours or more are entitled to a 30-minute (unpaid) meal break. Employees are allowed to voluntarily waive the meal break. This waiver should be in writing.
What are the maximum hour rules?
Most employers are entitled to one day of rest for every seven days. Other than that, there are no statutory restrictions, except for minors. There are numerous restrictions on the hours of work and jobs in which minors are allowed to be employed. These are more restrictive for those aged 16 or below, and slightly less restrictive for those between the age of 16 and 18.
How should overtime be calculated?
Overtime should be calculated at time and a half of the employee’s regular rate. In most regards, Massachusetts law is consistent with federal law regarding how the regular rate is calculated, and what constitutes “hours worked” for overtime purposes. Like the federal Fair Labor Standards Act, overtime is usually required only after 40 hours worked per week. At present, retail employees must be paid time and a half for work on Sundays and holidays. However, as part of the so-called ‘grand bargain’, which included increases to the state’s minimum wage and the establishment of a paid family and medical leave program, the Sunday and holiday overtime pay multiplier will be reduced to 1.4 times the regular rate as of January 1, 2019, and by 0.1 each year thereafter, until the overtime premium for Sunday and holiday work for retail employees vanishes altogether on January 1, 2023.
What exemptions are there from overtime?
For the most part, Massachusetts follows the federal exemptions for white collar employees (e.g., executive, professional, and administrative employees). There are 20 additional exemptions under state law, which are set forth at Mass. G.L. c. 151, Section 1A.
What payroll and payment records must be maintained?
Massachusetts requirements are generally consistent with federal requirements. Pay records must reflect hours worked, pay, basis for calculation, and deductions. Records must be maintained for a minimum of three years.
Discrimination, harassment and family leave
What is the state law in relation to:
Yes. Aged 40 and above.
Yes. Massachusetts has a broader definition of “disability” than the Americans with Disabilities Act.
(e) Sexual orientation?
As part of disability protection. Massachusetts also prohibits discrimination on the basis of genetic information.
Gender identity or expression and military or veteran status.
What is the state law in relation to harassment?
As part of the state Anti-discrimination Law, sexual harassment, and harassment based on other protected categories, is prohibited. Unlike federal law, Massachusetts imposes strict liability for sexual or other forms of harassment by supervisors and managers. Massachusetts also has a law requiring that employers develop and maintain a sexual harassment policy. Employees must be provided with a copy of this policy upon hire, and annually thereafter. Training on harassment prevention is encouraged, but not required.
Family and medical leave
What is the state law in relation to family and medical leave?
Massachusetts has no state version of the federal Family and Medical Leave Act. However, effective January 1, 2021, employees will be able to seek paid family and medical leave benefits under a state program to be established (which will be financed by employer contributions). While the exact parameters of the program are yet to be determined, eligibility for benefits under the program will, to a great extent, track Family and Medical Leave Act eligibility. State paid leave will run concurrently with any applicable Family and Medical Leave Act leave. The state also has a number of other leave-related laws, including:
- the Mandatory Earned Sick Time Law, which mandates up to 40 hours per year for absence related to employee illness or illness of certain family members. This leave is paid for employers of 11 or more workers and unpaid for employers with 10 or fewer workers;
- the Parental Leave Law, which provides up to eight weeks’ leave upon birth or adoption of a child;
- the Domestic Violence Leave Law, which allows up to 15 days’ leave for certain reasons related to the need to address domestic violence issues; and
- a law allowing up to 24 hours of annual leave for “small necessities”, such as attending educational events for the employee’s child, accompanying the employee’s child or parent to routine medical appointments, and accompanying an elderly relative to appointments for professional care. The employer and employee eligibility requirements under the Small Necessities Leave Act are identical to eligibility for family and medical leave.
Privacy in the workplace
Privacy and monitoring
What are employees’ rights with regard to privacy and monitoring?
There is no specific legislation. The state has a general “right to privacy” statute (G.L. c. 214, Section 1B). In interpreting this provision, courts have balanced the legitimate business reason for the intrusion against employees’ reasonable expectation of privacy. This balancing test has been applied to issues such as workplace searches, drug testing, and seeking personal information from employees. For purposes of recording audio communications, Massachusetts is an “all-party consent” state, meaning that all participants in a conversation must agree before audio discussions can be intercepted and recorded. In most cases, an employer can obtain consent by informing callers that the call will be recorded.
Are there state rules protecting social media passwords in the employment context and/or on employer monitoring of employee social media accounts?
Bring your own device
What is the latest position in relation to bring your own device?
There is no specific law or regulation addressing this issue.
To what extent can employers regulate off-duty conduct?
There are no statutory restrictions. Massachusetts has no lifestyle protection or lawful products statute. Unreasonable intrusions into off-duty conduct may give rise to a right-to-privacy claim.
Are there state rules protecting gun rights in the employment context?
Trade secrets and restrictive covenants
Who owns IP rights created by employees during the course of their employment?
Employers generally own IP rights created by employees during the course of employment. It is strongly advised that employers enter into written agreements with employees regarding such subjects.
What types of restrictive covenants are recognized and enforceable?
Non-solicitation and confidentiality agreements are generally enforced, if reasonable. The law regarding non-competition agreements underwent substantial change in 2018. Effective October 1, 2018, non-compete provisions are restricted in a number of ways. Among the more significant changes from prior law are the following:
- Non-competes are now unenforceable against non-exempt employees, interns and employees aged 18 or under.
- Non-competes are not enforceable if an employee is terminated from employment without cause.
- To enforce a non-compete entered into during the employment relationship, garden leave (50% of an employee’s base pay) must be paid to the employee during the non-compete period (which can be no more than 12 months, unless the employee has breached their fiduciary duty to the employer, or has taken employer property).
- If a non-compete is presented at the commencement of employment, it must be presented to the employee the earlier of either the date that an offer of employment is made, or 10 days before the commencement of employment.
- Existing employees must be given at least 10 days to consider a non-compete.
This is only a summary of the major changes. Since the law is new, consultation with counsel is essential before presenting a non-compete agreement to an applicant or employee.
It is also worth noting that, as part of the non-compete legislation, Massachusetts has adopted a version of the Uniform Trade Secrets Act.
Are there any special rules on non-competes for particular classes of employee?
There are a few industry-specific bans on non-competes (e.g., lawyers and doctors).
Right to work
Is the state a “right to work” state?
Unions and layoffs
Is the state (or a particular area) known to be heavily unionized?
Yes. The public sector (i.e., state, county and municipal employees) is overwhelmingly unionized. The private sector is less unionized, but is still at the higher end of the range when compared to other states.
What rules apply to layoffs? Are there particular rules for plant closures/mass layoffs?
The state has its own version of the federal Worker Adjustment and Retraining Notification Act which applies only in limited circumstances (e.g., when the employer has accepted funding from certain named quasi-public agencies). The law is inapplicable to most employers, so as a practical matter in dealing with mass layoff or plant closure issues the employer need only be concerned with the Worker Adjustment and Retraining Notification Act.
Discipline and termination
Are there state-specific laws on the procedures employers must follow with regard to discipline and grievance procedures?
No (regarding private sector employers).
At-will or notice
At-will status and/or notice period?
Employment is presumed to be at will without a contract or agreement to the contrary. In some situations, an employee handbook or policy may constitute an agreement for employment other than at-will employment. There is no statutory notice requirement for termination of employment.
What restrictions apply to the above?
At-will employees in violation of public policy cannot be terminated or deprived of compensation due to past services.
Are there state-specific rules on when final paychecks are due after termination?
Yes. If an employer terminates an employee, the employee must be paid all wages due (including accrued vacation pay) on the termination date. If the employee resigns, payment can be made on the next regular payday. There are mandatory treble damages for violation of the Payment of Wages Law.