In addition to the restrictions on opening in certain New England states, retailers with stores in Massachusetts and Rhode Island should also be aware of their obligation to pay their employees holiday pay (i.e., one-and-one-half of their regular rate) for working on state holidays (as well as on Sundays). These premium pay requirements are some of the last vestiges of the New England “blue laws” that regulate commercial activity on “days of rest.” Although these laws have roots stemming back hundreds of years, they are still vigorously enforced today.
In Massachusetts, retail businesses must pay their non-exempt employees at least one-and-one-half of their regular rate of pay for work performed on Sundays and holidays. Notably, this premium pay can be used to offset an equal amount of overtime pay earned over the course of the same workweek. For example, if an employee works a total of 48 hours in a given week during which 8 of those hours are worked on a Sunday or holiday, the employee is only due a total of 40 hours of regular pay and 8 hours of premium pay at time and a half. Retailers must pay holiday pay in Massachusetts on the following days:
- New Year’s Day
- Memorial Day
- Independence Day
- Labor Day
- Columbus Day
- Veterans Day
- Thanksgiving Christmas
Notably, with limited exceptions, most retailers in Massachusetts, Rhode Island, and Maine are prohibited from operating on Thanksgiving and Christmas. However, if they do open despite those restrictions, they must pay non-exempt employees holiday pay for all hours worked on those days.
In Rhode Island, the obligation to pay non-exempt employees one-and-one-half of their regular rate on both Sundays and holidays extends to all employees (not just retail employees) with limited exceptions. Rhode Island observes the same holidays as Massachusetts listed above as well as Victory Day, which falls on the second Monday of August.
In both states, where a holiday falls on a Sunday, the holiday is legally observed on the following Monday, which means employees working on both the Sunday and Monday in these circumstances will be entitled to time and a half compensation for work on both days. Employers should also be aware that in both states it is against the law to require an employee to work on a Sunday or holiday. Any form of discrimination on that basis is prohibited.
As the holiday season approaches, retailers with operations in Massachusetts and Rhode Island are well advised to review their pay practices with regard to holiday pay, particularly given the potential consequences of non-compliance. In Massachusetts, the statute of limitations on claims relating to unpaid wages is three years and treble damages are mandatory. In Rhode Island, the statute of limitations on claims relating to unpaid wages is also three years and successful plaintiffs may be awarded double their damages. The marked increase in wage and hour class action litigation over recent years is well known, and there have been class actions filed against retailers in New England due to the failure to comply with holiday pay laws.