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This Massachusetts Human Resources Manual is offered to you for free. Find state specific laws and regulations below.

Wages and hours — Massachusetts

Wages and hours in Massachusetts are governed by state and federal laws. The federal Fair Labor Standards Act (FLSA) establishes standards for:

  • a minimum wage rate
  • maximum number of hours
  • overtime pay
  • child labor
  • recordkeeping.

It requires employers to pay a minimum wage and overtime to certain employees, subject to several exceptions.

Massachusetts law is similar to federal law concerning minimum wage and overtime pay, with some key differences. To the extent federal and state laws differ, the employer must follow the law that more rigorously protects employees.

Coverage

The Fair Labor Standards Act (FLSA) applies to any individual who either:

  1. engages in commerce between the states
  2. produces good for commerce between the states.

Massachusetts wage law applies to all employees in the state.

Federal and Massachusetts wage laws cover employees even when the organization is not a covered enterprise.

The FLSA also covers certain domestic service workers, such as:

  • day workers
  • housekeepers
  • chauffeurs
  • cooks
  • full-time babysitters

depending on either:

  1. the amount of cash wages they receive from one employer in a calendar year
  2. whether they work a total of more than eight hours a week for one or more employers.

Enterprise coverage

The FLSA applies to all employees in a covered “enterprise.” An “enterprise” is a company as a whole, with related operations performed for a common business purpose, including all operations regardless of whether performed at the same location. 

A store that has multiple departments is an “enterprise,” while independent contractors and certain independent retail and service establishments connected to the store are not included within the enterprise. 

To qualify as a covered enterprise, a company must have two or more employees, and meet at least one of the following requirements:

  • an annual gross volume of sales made or business done that is not less than $500,000 (exclusive of excise taxes at the retail level that are separately stated)
  • be engaged in the operation of a hospital, an institution engaged in the care of the sick, aged, or mentally ill who reside on the premises, a school for mentally or physically disabled or gifted children, a preschool, elementary or secondary school; or an institution of higher education (for profit or not for profit)
  • be an activity of a public agency (that is, state or federal government).

Hospitals and nursing homes

The FLSA covers hospitals and institutions engaged in the care of the sick, aged, mentally ill, or disabled who reside on the premises.

Public agencies

The FLSA covers public employers. Special provisions apply to certain public employees, including higher overtime eligibility levels and longer work periods in which to calculate overtime for law enforcement and fire protection employees. The FLSA excludes elected officials and their personal staff members and appointees, as well as members of the legislative branch from coverage.

Educational institutions

The FLSA covers preschools (including childcare facilities), elementary schools, secondary schools, institutions of higher education, and schools for gifted or handicapped children.

Manufacturing companies

The FLSA covers the majority of manufacturing companies that are engaged in the production of goods for commerce.

Transportation companies

The FLSA covers transportation companies. However, certain employees such as interstate truck drivers, and the helpers and mechanics working on those trucks, are exempt from the overtime requirements of the FLSA.

Public utilities

The FLSA covers public utilities (that is, entities that are subject to government regulation and provide essential commodities such as water, electricity, or gas).

Retail and service establishments

The FLSA covers retail and service establishments whose annual revenues are at least $500,000. A “retail and service establishment” is “an establishment 75% of whose annual dollar volume of goods or services (or a combination of both) is not for resale and is recognized as retail sales or services in the particular industry.”

These establishments include:

  • retail stores
  • restaurants
  • hotels
  • theaters
  • cemeteries.

The "retail and service establishments" coverage includes a number of exclusions. These extended businesses include:

  • accounting firms
  • financial institutions
  • brokerage hours
  • doctors' offices
  • laundries
  • law firms
  • book publishers.

Employees of retail and service establishments paid on commission are not subject to the FLSA’s overtime requirements. To be considered such an employee, the employee must receive at least one and one half the current minimum wage and more than 50 percent of his or her earnings must come from commissions.

Posting requirements

Employers covered by the FLSA must display an official poster outlining FLSA provisions. This poster is available from the DOL by calling (866) 4US-Wage (866-487-9243) and it is available electronically for downloading and printing at:

Exemptions from minimum wage and overtime requirements

Federal and Massachusetts laws require covered employers to pay employees a minimum hourly wage and overtime compensation for all hours worked more than 40 hours in a workweek. An employee who is not covered by wage and hour law is known as “exempt,” and the minimum wage and overtime requirements do not apply to the individual. Federal and Massachusetts laws differ in the designation of positions that are exempt from wage and hour requirements. 

Note: Courts look at the actual duties of the position, not the job title, to determine whether an employee qualifies for an exemption under the FLSA or Massachusetts law.

White-collar exemptions

There are five principal white-collar exemptions to the FLSA.

  1. executive
  2. administrative
  3. professional
  4. computer employee
  5. outside sales.

Massachusetts law recognizes an exemption for “a bona fide executive, administrative or professional person” but does not elaborate on the definition of these positions. State law also includes an exemption for outside sales employees.

Salary basis

Under the FLSA, for the executive, administrative, or professional exemption to apply to the employee, the employer must pay the employee on a salary basis. Salaried status is not required for these exemptions under Massachusetts law, however, an employer should comply with this requirement to lawfully apply the federal exemptions. 

According to the federal regulations, the employer must pay a predetermined amount to the employee for each week the employee works. The employer may not deduct from the employee’s salary based on the quantity or quality of the work performed.

Effect of deductions
Week-long absences

The FLSA does not require an employer to pay an exempt employee for any week in which the employee performs no work, regardless of the reason for the absence.

Partial-day absences

An employer may not deduct from an exempt employee’s pay for partial day absences, except for intermittent or reduced-schedule FMLA leave or partial absences during the initial or final week of employment.

Absences of less than a week
  • Absences caused by the employer - An employer may not deduct from an exempt employee’s pay for absences of less than a week that are caused by the employer (such as lack of work), except for unpaid disciplinary suspensions.
  • Absences taken for reduced schedule or intermittent leave under the FMLA - An employer may deduct a proportionate amount from the pay of an exempt employee who takes intermittent or reduced schedule leave under the FMLA. The employer may make the deduction for full or partial days missed.
  • Absences in the initial or final week of employment - An employer may deduct for full or partial day absences in the first and last week of employment of an exempt employee.
  • Other absences of less than a week caused by the employee - An employer may not deduct from the pay of an exempt employee for an absence of less than a week that is caused by the employee, except in the following circumstances:
    • absence due to personal reasons
    • absence due to sickness or disability
    • absence due to jury duty, witness duty, or military leave.
Unpaid disciplinary suspensions

An employer may suspend an exempt employee without pay for one or more full days as discipline for an infraction of workplace conduct rules when the following conditions are met:

  • the suspension is in good faith
  • a written policy allows for such suspensions
  • the workplace conduct rule concerns serious misconduct (such as harassment, workplace violence, drug or alcohol violations, or violations of state or federal laws).

The employer may not suspend an exempt employee without pay for performance or attendance problems.

Deductions as penalties for violations of safety rules of major significance

An employer may deduct any amount from an exempt employee’s pay (including an amount that would be equivalent to a partial day of pay) as a penalty imposed in good faith for a violation of a safety rule of major significance (defined as a rule regarding the prevention of serious danger in the workplace or to other employees).

Effect of improper deductions

If an employer makes improper deductions from its employees’ salaries, it loses the exemption if the facts show that the employer did not intend to pay those employees on a salary basis. An actual practice of making improper deductions shows that the employer has violated the salary basis test.

An employer may remedy an isolated or inadvertent partial-day deduction without losing the exemption. However, when an employer makes such a deduction because of lack of work, the action jeopardizes the exemption (for instance, an employer sends an employee home early and does not pay the employee for the full day). The employer may also lose the exemption if it has a corporate policy that permits partial-day deductions or requires employees to work additional time to make up for partial-day absences.

The DOL’s regulations include a safe harbor for the salary basis test.  Under the safe harbor provision, an employer does not violate the salary basis test if all of the following are true:

  • it has a policy against improper deductions
  • it communicates that policy to its employees
  • it reimburses any employees who suffer an improper deduction.

A court must find that employees have actually been subject to impermissible deductions before it changes the exempt status of the employees. In other words, a court will not remove the exemption based on the possibility of an impermissible pay reduction. The employer’s unlawful policy must clearly apply to employees for a court to change the exempt status.


Federal law and Massachusetts laws include exemptions for certain professional positions.  While Massachusetts law is silent on the definition of these exemptions, federal regulations include the tests described below.

Executive employee exemption

The executive exemption applies to an employee who is paid at least $455 per week ($684 per week as of January 1, 2020) on a salary basis, and who meets the following criteria:

  • Primary duty - The employee manages the enterprise, or manages a customarily recognized department or subdivision of the enterprise.
  • Supervision - The employee customarily and regularly directs the work of two or more employees.
  • Authority - The employee has the authority to hire or fire other employees or his or her suggestions and recommendations as to hiring, firing, promotion or other change of status are given particular weight.

The executive exemption also includes any employee who owns at least a bona fide 20% equity interest in the enterprise and who actively engages in its management.

Administrative employee exemption

The administrative exemption applies to any employee who is paid at least $684 per week on a salary basis, and who meets both of the following criteria:

  1. Primary duty - The employee performs office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers, or performs functions in the administration of a school system or educational establishment or institution, or of a department or subdivision of such facility, in work directly related to the academic instruction or training carried on there.
  2. Discretion - The employee customarily and regularly exercises discretion and independent judgment with respect to matters of significance.

Examples of administrators include:

  • employees who lead a team of other employees assigned to complete major projects
  • executive assistants or administrative assistants to a business owner or senior executive
  • human resources managers
  • purchasing agents.

Professional employee exemption

The professional exemption, which includes both “learned professionals” and “creative professionals,” applies to an employee who is paid at least $684 per week on a “salary basis” or a “fee basis” and who meets the following criteria:

Learned professionals
  • Primary duty - The employee performs work:
    • requiring advanced knowledge
    • in a field of science or learning
    • customarily acquired by a prolonged course of specialized intellectual instruction.
  • Discretion - The employee consistently exercises discretion and judgment in performance.
  • Intellectual - The employee performs work that is predominantly intellectual and varied in character and is of such character that the output produced or the result accomplished cannot be standardized in relation to a given time period.
Note:
Teachers, lawyers, and physicians are exempt from the salary requirement of the learned professional exemption, and have their own duty requirements for this exemption.
Examples of learned professionals include:
  • registered or certified medical technologies
  • registered nurses
  • dental hygienists
  • physician assistants
  • accountants
  • chefs
  • certified athletic trainers
  • funeral directors or embalmers.
Salary requirements do not apply to:
  • teachers
  • attorneys
  • doctors.
Creative professionals
  • Primary duty - The employee performs work requiring any of the following:
    • invention
    • imagination
    • originality
    • talent
    • in a recognized field of artistic or creative endeavor as opposed to routine mental, manual, mechanical, or physical work.
  • Creative professionals perform work in fields such as:
    • music
    • writing
    • acting
    • graphic arts.

Computer employees exemption

The FLSA also includes an exemption for computer employees. This exemption from the FLSA applies to any employee who is compensated on a salary or fee basis at a rate of at least $684 per week or who is compensated on an hourly basis at a rate of not less than $27.63 per hour, who is employed as a computer systems analyst, computer programmer, software engineer, or other similarly skilled worker and whose primary duties consist of one or more of the following:

  • the application of systems analysis techniques and procedures including consulting with users to determine hardware and software specifications
  • designing computer-based systems based on and related to user specification
  • creating or modifying programs based on or related to systems design specifications
  • creating or modifying computer programs relating to machine operating systems.

Outside sales employee exemption

Both federal and Massachusetts laws include an exemption for outside sales employees. Federal regulation states that an outside sales employees is exempt if he or she regularly engages in making sales or obtaining orders for services or the use of facilities away from the employer’s place of business or away from an in-home office. Outside sales must be the employee’s primary duty. There is no salary requirement for this exemption.

Note:
In May of 2019, the Massachusetts Supreme Court held that under Massachusetts law salesperson paid on a 100% commission or draw basis must be paid separate and additional overtime and Sunday pay, even if their compensation exceeds 1.5 times the Massachusetts minimum wage per hour for such work.

Highly compensated employees

Under the FLSA exemption for highly compensated employees, an employee with total annual compensation of at least $107,432 is considered exempt if he or she meets the criteria described below:

  • The employee is paid on a salary basis or fee basis at a rate of at least $684 per week.
  • The employee’s total annual compensation is at least $107,432 (including both salary and commissions, nondiscretionary bonuses and other nondiscretionary compensation earned in a 52-week period).
  • The employee’s primary duty includes performing office or nonmanual work.
  • The employee customarily and regularly performs any one or more of the exempt duties or responsibilities of an executive, administrative or professional employee.

Other exemptions

Federal and state laws designate several other positions as exempt from overtime requirements. The following categories of employees are either totally exempt (exempt from minimum wage and overtime requirements), or partially exempt (exempt from overtime requirements only) from the wage provisions.

Total exemptions (minimum wage and overtime)

The following workers are exempt from the minimum wage and overtime provisions of the FLSA:

  • employees of recreational and amusement establishments and organized camps
  • local retail and service establishments
  • employees of certain small local newspapers (under 4,000 subscribers) and switchboard operators of small telephone companies
  • seamen employed on foreign vessels
  • employees engaged in fishing operations
  • employees engaged in newspaper delivery
  • farm workers employed on small farms (those that used less than 500 “man days” of farm labor in any calendar quarter of the preceding calendar year)
  • casual babysitters and persons employed as companions to the elderly or infirm.

Partial exemptions (overtime)

The following employees are exempt from only the FLSA overtime provisions:

  • certain commissioned employees of retail or service establishments
  • auto, truck, trailer, farm implement, boat, or aircraft salespersons employed by non‑manufacturing establishments primarily engaged in selling these items to final purchasers
  • auto, truck, or farm implement parts‑clerks and mechanics employed by non‑manufacturing establishments primarily engaged in selling these items to final purchasers
  • railroad and air carrier employees, taxi drivers, certain employees of motor carriers, seamen on American vessels, and local delivery employees paid on approved trip rate plans
  • announcers, news editors and chief engineers of certain non‑metropolitan broadcasting stations (non-metropolitan is defined as a town of 100,000 or less not part of a standard metropolitan statistical area of 100,000 or a town with a population of 25,000 or less that is part of such an area but at least 40 air miles from the center of the major city)
  • domestic service workers who reside in their employers’ residences
  • motion picture theater employees
  • farm workers.

Massachusetts law allows the following additional exemptions from state overtime requirements:

  • janitors or caretakers of residential property, who when furnished with living quarters is paid a wage of not less than 30 dollars per week
  • golf caddies, newsboys, or child actors or performers
  • outside salesmen or outside buyers
  • learners, apprentices or handicapped persons under a special license
  • fishermen or as a persons employed in the catching or taking of any kind of fish, shellfish, or other aquatic forms of animal and vegetable life
  • switchboard operators in a public telephone exchange
  • drivers or helpers on a truck
  • in a business that is carried on during a period or accumulated periods not in excess of 120 days in any year, and determined by the Massachusetts Department of Labor Commissioner to be seasonal in nature
  • seamen
  • in a hotel, motel, motor court or similar establishment
  • in a gasoline station
  • in a restaurant
  • garage men, which positions do not include parking lot attendants
  • in a hospital, sanatorium, convalescent or nursing home, infirmary, rest home or charitable home for the aged
  • in a nonprofit school or college
  • in a summer camp operated by a nonprofit charitable corporation
  • laborers engaged in agriculture and farming on a farm
  • in an amusement park containing a permanent aggregation of amusement devices, games, shows, and other attractions operated during a period or accumulated periods not in excess of 150 days in any one year.

Payment of wages

Payment of wages is governed by Massachusetts law.

Coverage

The Massachusetts Payment of Wages statute broadly applies to “every person having employees in his service.” An employee is any person employed for hire by an employer in any lawful employment. It excludes individuals:

  • under age 18 who are engaged in domestic service at the home of the employer
  • persons engaged in agricultural service
  • employees of any social club, fraternal, charitable, educational, religious, scientific or literary association, no part of the net earnings of which benefits any private individual.

Method of payment

Employers may pay employees on a piece‑rate basis, as long as they receive at least the equivalent of the required minimum hourly wage rate. Employers of tipped employees (those who customarily and regularly receive more than $20 a month in tips) may consider the tips as part of their wages, provided that employers meet certain conditions (such as keeping accurate records of the tips).

Time of payment

Massachusetts law requires that employers pay employees within either:

  • six days of the pay period for which the wages were earned
  • seven days when the employee works every day.

In addition, the employer must pay employees, at a minimum, on a weekly or biweekly schedule. However, the law permits an employer to pay bona fide executive, professional or administrative employees who are salaried on a biweekly or semi-monthly schedule or, at their election, on a monthly schedule. Massachusetts law also allows an employer to change from weekly to biweekly payments for nonexempt employees so long as the employer provides employees with written notice 90 days before the first biweekly paycheck.

Payment after termination

Massachusetts law also includes requirements for payment upon termination of the employment relationship. When an employee voluntarily leaves his or her employment, the employer must pay the employee in full on the following regular payday or, if there is none, on the following Saturday. When an employer terminates an employee’s employment, the employer must pay the employee in full on the day of the dismissal. Failure to meet these timelines can result in an employer being liable for triple wages and attorney fees. There is no safe harbor and the triple wages applies for both intentional and unknowing failure to pay wages in the time limits required by Massachusetts law.

The employer must also pay a departing employee his or her commissions when the amount of such commissions has been definitely determined and become due and payable under the company’s plan.

Penalties 

An employer subjects itself to severe penalties for violation of the Payment of Wages statute. Both civil and criminal actions are available under the statute. The Massachusetts Attorney General and individual employees have the authority to institute an action against an employer. If an employee proves to the court that the employer violated the Payment of Wages statute, she or he may recover up to three times the alleged damages, as well attorneys’ fees and costs. In addition, an officer, agent, or employee of the employer may be held individually liable for violation of the statute, and may be subject to civil or criminal sanctions.

Compensable working time

In general, the FLSA considers time spent performing activities that are primarily for the employer’s benefit as compensable “hours worked,” while time spent primarily for the employee’s benefit is not. 

Rest periods

Courts generally consider rest periods to be for the employer’s benefit. Thus, short periods of 20 minutes or less for breaks, such as for coffee and snacks, are compensable hours worked.

Meal periods

The general rule is that an employer does not need to compensate an employee for a meal period of 30 minutes or more.

If an employee does not punch in and out for an unpaid meal period during the work shift, the employer must ensure that the employee is relieved of duties for the entire meal period. Supervisors must be sure that employees actually take their scheduled meal periods. Where they do not, the time cards must be marked accordingly. Generally, when an employee does not spend the meal period on tasks for the benefit of the employer, the time is not compensable. Conversely, when an employee uses his or her meal period for the benefit of the employer, the time is compensable.

Example:
When an employer requires an office employee to eat at his desk and answer telephone calls, the time is compensable. Similarly, when an employer requires a factory worker to be at his machine during lunch, the time is compensable.

If an employee’s meal period is interrupted by more than an insignificant amount of time (that is, two or three minutes), the employee must be paid for the lunch period or receive a second lunch period. When an employee experiences repeated interruption of meal periods on a continuing basis, a court may find that the employee is not entirely relieved of duties and, therefore, the meal periods are compensable hours.

Waiting time while on duty

When employees are idle during their regular workday because of interruptions beyond their control, the time spent waiting is counted as working time if it is:

  • unpredictable
  • short in duration
  • controlled by the employer such that employees are unable to use that time for their own purposes.

Below are a few instances of compensable working times:

  • a factory worker who, while waiting for the machine she operates to be repaired, talks with her co-workers
  • a clerk who, while waiting on an assignment or for a large copy job to be completed, reads a book or works a crossword puzzle
  • a repairman who, while waiting on his customer to get the premises ready, talks on the phone with a friend.

24-hour duty

Employees on duty for 24 or more hours or who reside on the employer’s premises may agree in writing to have uninterrupted sleep time of up to eight hours per night deducted from hours worked. The employer may not take this reduction unless it provides at least five hours of sleep. An employer may also deduct up to three hours of mealtimes. Persons who reside on the employer’s premises also may voluntarily sign agreements setting forth their work and non-work time on a fair and reasonable basis.

On-call time

Whether on-call time is compensable depends on the extent to which the employee’s personal time is restricted. Carrying a beeper does not constitute hours worked, provided the employee is relatively free to come and go as he or she pleases and the employee is given sufficient time to report (generally 20 to 30 minutes, depending on geographic population density of the area), so that the employee can be free to use time to engage in personal activities while on call. An employer may require the employee to refrain from drinking alcoholic beverages during this period. 

Some restrictions may translate on-call time into hourly work, such as requiring an employee to stay at work or placing an employee constantly on-call or frequently interrupting the on-call period.

Travel time

All in one day

  • When an employee commutes to and from work in a particular geographic area, the time is not compensable.
  • When an employee travels (as a driver or passenger) to a distant location, the time is compensable.
  • When an employee travels between work locations or between a work location and another place of assignment, the time is compensable.

Out of town overnight

  • When an employee travels during normal work hours, the time is compensable.
  • When an employee travels outside normal work hours as a passenger, the time is not compensable.
  • When an employee travels as a driver (other than typical commuting), the time is compensable.
  • If the employee may use public transportation for the trip, but instead uses an automobile for personal reasons, the company may count the hours worked as either:
    1. the time the employee spends driving to the destination
    2. the time the employee would have worked had the employee used public transportation.

Commuting in company vehicle

The use of an employer’s vehicle for travel by an employee commuting to and from work and incidental activities, such as getting a car washed or its oil changed, are not considered part of an employee’s principal activities (and, therefore, not compensable) if:

  • the use of such vehicle for travel is within the normal commuting area for the employer’s business or establishment
  • the use of the employer’s vehicle is subject to an agreement on the part of the employer and the employee or representative of such employee.

Meetings, lectures, and courses

When an employee attends meetings, lectures, and training programs or courses, the time is compensable unless all four of the following requirements are met:

  1. the time is outside employee’s normal working hours
  2. the course subject is not directly related to the employee’s regular job (such as learning the requirements of a new or higher-rated job)
  3. attendance is truly voluntary (except for state mandated training)
  4. no productive work is performed.

When an employee spends time outside of normal work time in state or licensing agency-mandated training such as to meet continuing education requirements, the time is not compensable.

Uniform changing

When an employee spends time changing uniforms, the activity is compensable if the employee must change at work and the employee cannot perform his or her job without the uniform.

Medical attention

When an employee spends time waiting for and receiving medical attention, the time is compensable if the medical attention is received during normal work hours and either:

  1. the medical attention is received at the employer’s facility or on plant premises
  2. the employer directs the medical attention to be obtained elsewhere.

Physical examinations

When an employee spends time receiving a physical examination that is required for continued employment, the time is compensable. However, when an employee or applicant takes a drug test for employment, the time is not compensable.

Civic and charitable work

When an employee spends time working for public or charitable purposes at the employer’s request, under its direction or control, or while the employee is required to be on the premises, the time is compensable. For instance, when an employer requires that its employee attend a charitable function, the employer must pay the employee for that time. However, when an employee participates in such activities outside its normal working hours, the time is not compensable.

Additional compensatory time issues for public employees

Volunteers

Public employees may engage in voluntary, sporadic, or occasional work for an employer without those hours being combined for overtime purposes. For instance, a school clerk may collect tickets at a high school football game without being compensated for the time.

Compensatory time off

In general, federal, state, and local government employers, with the agreement of employees, may give compensatory time off (at a rate of time and one-half) to an employee rather than pay overtime. In other words if an employee works 60 hours in a week, he could get 30 hours of compensatory time off instead of 20 hours of overtime pay.

If an employee participates in a public safety activity, emergency response activity, or seasonal activity, the employee may accrue up to 480 hours of compensable time (320 hours of actual overtime worked).

  • Public safety activities - This term generally refers to activities by law enforcement officers and firefighters.
  • Emergency response activities - Emergency response activities generally refer to the dispatch of emergency vehicles, rescue work, and ambulance services.
  • Seasonal activities - These activities typically include work during periods of increased demand, which are regular and recurring in nature.

For all other types of work, the law caps compensatory time at 240 hours (160 hours of actual overtime worked).

When an employer gives compensatory time to an employee, it must be at the rate of not less than one and one-half hours of time for each hour of overtime work, and must be under an agreement or understanding between the employer and employee prior to the beginning of the overtime.

There is no specific time limit by which a public employee may elect to use compensatory time earned. However, the public employer must permit the employee to use such time within a reasonable period after the employee requests time off, unless such use will unduly disrupt the government’s operations. This determination depends on the current workload, and the specific circumstances of the case. When an employee’s employment ends, the employer must pay him or her for all remaining compensatory time at his or her current rate of pay.

Records that must be kept

Information that must be maintained

Employers are required to maintain payroll records including the following information:

  • For all employees:
    • employee's name and company identification number
    • home address
    • birth date (if under 19)
    • sex and occupation
    • time of day and day of week that employee's workweek begins
    • total wages paid per pay period
    • the hours worked each day and each week by each employee
    • date paid and pay period covered by payment.
  • For employees subject to minimum wage and overtime provisions of the FLSA:
    • regular hourly rate of pay in effect for the time period covered by the records
    • hours worked per day and per week (must furnish this information to employees with every payment of wages)
    • total daily or weekly earnings exclusive of overtime pay
    • total premium pay for overtime hours
    • total additions or deductions from pay including purchase orders or wage assessments (payroll deduction information must be furnished to employees with every payment of wages).
  • For exempt employees:
    • the basis on which wages are paid in sufficient detail to permit calculation for each pay period of total compensation, including fringe benefits.
Note:
A copy of the paycheck is not sufficient to meet these requirements.

Record retention

The Fair Labor Standards Act (FLSA) requires an employer to retain certain records, including:

  • payroll records (such as ledgers and payroll registers), employment agreements, and sales and purchase records for three years (the FLSA does not require any particular form for these records)
  • supplementary basic records (such as timecards, work sheets, wage rates, and billing records) for two years
  • state and federal tax withholding forms, such as W-2’s, for whichever is later of:
    • four years from the due date of the tax
    • the date the tax is paid.
Note:
Employers must comply with the longer record retention requirements of the FLSA for employees covered by that statute.

Penalties

When an employer fails to maintain adequate or accurate employment records, it may be held responsible for the information contained within such records. Thus, for instance, employee testimony as to hours worked generally will be believed in the absence of accurate records of such work.

Courts and government agencies maintain that the employer can hardly complain about this consequence, since it could have been easily avoided by accurate recordkeeping.

Recording hours worked 

The hours an employee works includes all hours an employee is engaged to work, engaged to wait, or actually at work, whether or not the employer authorizes the time. Thus, if an employee starts work early or works beyond the end of his or her shift, the employer must compensate for the time, whether or not it authorized the time. However, an employer may discipline an employee for unauthorized or unnecessary work.

Employers may keep track of employees’ time using any method of choice. For instance, employers may use a time clock, have a timekeeper keep track of employees’ work hours, or require employees to write their own time on the records. Generally, any timekeeping plan is acceptable so long as it is complete and accurate.

Time clocks

Time clocks are not required but may be used to record work hours. If an employer uses time clocks, it may employ a rounding practice. If the rounding method is followed, employers must ensure it does not mean that they fail to compensate employees properly for all the time they have actually worked. Employers should round employee time to the nearest increment (five minutes or 10 minutes, not to exceed 15 minutes).

Minimum wage

According to Massachusetts law, all employers in Massachusetts must pay their employees a minimum wage of $14.25 per hour, increasing to $15.00 per hour on January 1, 2023, and $6.15 per hour for tipped employees, increasing to $6.75 on January 1, 2023.  The tipped rate applies only if the employee receives tips of more than $20 per month and if his or her average hourly tips, when added to the hourly rate, equal the basic minimum hourly rate for non-tipped employees.

Under the FLSA, employees who receive tips may be credited up to 40% of the statutory minimum wage per hour for tips received. The employer must be able to demonstrate the employee receives at least the minimum wage for each hour of work when tips and direct wages are combined. Before January 1, 2019, employers in Massachusetts were allowed to perform this calculation at the end of each pay period. Now, however, Massachusetts employers are required to perform the calculation at the end of the employee’s shift. Although this change in the law affects when employers must determine whether a tipped employee has been paid less than the minimum wage and thus is owed more money, it does not affect when employers must pay tipped employees.

Overtime calculations

The Fair Labor Standards Act (FLSA) and Massachusetts law require an employer to pay an overtime premium for all hours worked more than 40 in a workweek, except where the employee is exempt from the overtime requirements.

Number of hours

The FLSA does not limit either the number of hours in a day or the number of days in a week that an employer may require an employee to work, as long as the employee is at least 16 years old. Massachusetts law includes detailed requirements concerning hours worked by minors under 18 years old, based on the age of the individual. See Child labor.

Rate of overtime pay

Overtime pay rate is one and one-half times the employee’s regular rate of pay. An employer must include all compensation in its calculation of an employee’s regular rate unless specifically excluded by the FLSA. To calculate an employee’s regular rate of pay, the employer divides the employee’s total weekly compensation by the total hours worked during the workweek.

Example 
An employee who works 40 hours in one workweek and receives $640 has a regular rate of $16.00.

Regular rate of pay

In determining an employee’s regular rate for purposes of determining overtime, the employer must include the employee’s hourly wages and any incentive pay, commission or bonus (including attendance, production and incentive bonuses).

Even if the employee will not receive a bonus until later (for example, a quarterly production bonus or an annual longevity bonus), the payments must be included in the overtime compensation determination – even if it means retroactively adjusting those computations once the amount of the bonus is determined. The FLSA provides special rules for retroactive adjustment of an employee’s regular rate. The regular rate need not include:

  • discretionary bonuses (where the employer has discretion as to whether to make the payment and the amount of the payment)
  • gifts (which are not dependent on hours worked, production or efficiency and which are neither promised in advance nor annually received such that the employee comes to expect them)
  • payments made according to a bona fide profit‑sharing plan, trust, thrift or savings plan
  • payments made to a retirement or insurance plan
  • vacation, holiday or sick pay
  • reimbursements for expenses
  • “show up,” “reporting” or “call‑back” pay (but cannot be prearranged)
  • loans or pay advances
  • profits from stock options or stock purchase plans established to comply with requirements (explained below)

In December 2019, the DOL issued a final rule updating the FLSA definition of the regular rate of pay for the first time in more than 50 years. The final rule, which went into effect on January 15, 2020, clarifies that many benefits and perks should be excluded from the regular rate calculation, including (in addition to those listed above):

  • the cost of providing certain parking benefits, wellness programs, gym access and fitness classes, employee discounts on retail goods and services, certain tuition benefits and adoption assistance
  • payments of certain penalties required under state and local scheduling laws
  • certain sign-on bonuses and certain longevity bonuses.

The final rule also includes guidance and fact-based examples of what types of bonuses are considered discretionary. Bonuses that may be discretionary include:

  • bonuses to employees who made unique or extraordinary efforts that are not awarded according to pre-established criteria
  • severance bonuses
  • referral bonuses for employees not primarily engaged in recruiting activities
  • bonuses for overcoming challenging or stressful situations
  • employee-of-the-month bonuses
  • other similar compensation.

Such bonuses are usually not promised in advance, and the fact and amount of payment are in the sole discretion of the employer until at or near the end of the period to which the bonus corresponds.

Finally, the final rule updates the regulations regarding the “basic rate,” which is authorized under section 7(g)(3) of the FLSA as an alternative to the regular rate under specific circumstances. Under the current regulations, employers using an authorized basic rate may exclude from overtime computation any additional payment that would not increase total overtime compensation by more than $0.50 a week on average for overtime workweeks in the period for which the employer makes the payment. The final rule updates this regulation to change the $0.50 limit to 40% of the higher of the applicable local, state or federal minimum wage.

Hours not worked

When an employer pays an employee for hours that the employee did not work, such hours do not count for the purpose of overtime calculation. For instance, an employer does not have to pay the overtime rate for:

  • holidays
  • vacations
  • sick days
  • absences due to:
    • voting
    • jury service
    • reporting to a draft board
    • attending a family member’s funeral
    • inability to reach work because of inclement weather.

Unauthorized overtime

Employers often want to enforce a “no overtime without prior authorization policy” to control costs. However, even with such a policy, employees are entitled to overtime compensation for any hours worked more than 40 in a workweek. In such cases, the employer should notify employees that working unauthorized overtime will lead to discipline (but not non-payment of wages).

If an employee continues to perform unauthorized work, the employer should pay him or her, and discipline the employee appropriately (up to and including termination).

Special plans

There are a number of special circumstances to which the above FLSA overtime provisions do not apply.

Two rates in one workweek

An employee who works two jobs at two different rates for an employer during the same workweek should be paid overtime earnings when the total hours worked exceed the applicable overtime level according to one of two available approaches.

Approach #1 - weighted average approach

Under this approach, the employer divides the employee’s total earnings for the two separate jobs by the total number of hours worked. That figure is the weighted average regular rate.

Example:
If an employee works 40 hours per week at a job that pays $15 an hour and works 10 hours at another job that pays $20 an hour, the weighted average rate would be $800, divided by 50 hours, which is an hourly rate of $16.00.
Approach #2 - rate of overtime approach

An employee and his or her employer may agree before performance of the work that the employee will be paid overtime compensation based upon the rate of the job being performed during the overtime hours. To be enforceable, the employer and employee should agree to the terms in writing.

Fixed salary for fluctuating hours

In May 2020, the DOL issued a final rule clarifying that employers who use the fluctuating workweek method of calculating overtime (in other works, pay a fixed salary for all hours) may provide these employees with bonuses, commissions, premiums or other additional pay as long as overtime is paid on these additional amounts.

The fluctuating workweek method is available when the following conditions are met:

• The employee’s hours of work must fluctuate from week to week.

• The employee must receive a fixed salary that does not vary based upon the number of hours worked in the workweek, whether the hours worked are few or many.

• The fixed salary must equal at least a minimum wage for all hours worked in a workweek.

• There must be a clear understanding with the employee that the fixed salary represents compensation for all hours worked, whether they are few or many, in a workweek.

• The employee receives overtime compensation due, in addition to the fixed salary and any bonus or other premium payments of any kind for all overtime hours worked at not less than one-half of the employee’s regular rate of pay for each workweek.

Belo contracts

A “Belo” contract is a very specialized guaranteed pay plan derived from a Supreme Court decision by the same name. Such a plan only applies where an employee’s hours of work regularly fluctuate above and below 40 hours per week for reasons beyond the employer’s control. Such an employee could include a service technician who handles customer emergency equipment breakdowns. The guarantee may involve a straight-time and overtime component for workweeks up to a certain number of hours (50, for instance) and a time and one-half payment for hours worked over that limit. The regular rate used in such plans must be a bona fide rate and operative in determining compensation. Due to the complexity of these contracts, the employer should consult an attorney before implementing this plan.

Joint employment

An employee working for two or more organizations at the same time (joint employers) is entitled to overtime after 40 hours of total work and cannot legally be required to work more than 40 hours of straight time for joint employers.

Specifically, the wage and hour regulations provide that when an employee either:

  1. performs work that simultaneously benefits two or more employers
  2. works for two or more employers at different times during the workweek

a joint employment relationship generally will be considered to exist, and all employers are responsible, individually and jointly, for compliance with the overtime provisions of the FLSA. 

The following situations represent joint employment relationships:

  • an arrangement between employers to share the employee’s services (in other words, the employee performs jobs for each employer)
  • one employer acts directly or indirectly in the interest of the other employer (or employers) on behalf of the employee
  • the employers are not completely disassociated with respect to the employment of a particular employee and may be deemed to share control of the employee, directly or indirectly, due to of the fact that one employer controls, is controlled by, or is under common control with the other employer.

Meal and rest periods

Massachusetts law mandates that employers provide employees who work more than six hours a day with a 30-minute meal break. The meal break may be paid or unpaid, but at least one Massachusetts trial court judge has held that meal breaks count as compensable working time, for which employees must be paid, unless the employee is relieved of all work-related duties during the break. See DeVito v. Longwood Security Servs., Inc

In addition, Massachusetts requires an employer to provide one day of rest each week to most employees. The following establishments and employees are excluded from this law:

  • establishments for the manufacture or distribution of gas, electricity, milk, or water
  • hotels
  • establishments used to transport food
  • establishments that sell or deliver food by or in establishments other than restaurants
  • railroads
  • janitors
  • employees who do no work on Sunday other than setting sponges in bakeries or caring for live animals or machinery
  • certain newspapers employees
  • farm or personal service
  • drug store pharmacists
  • any work as a result of an unanticipated emergency.

Massachusetts employers that operate on Sunday must post a list of all employees, which designates the day of rest for each individual. An employer that violates this law may be subject to a fine of up to $300. In addition, retail stores that employ more than seven persons (including the proprietor) on each day during the week must pay non-managerial employees who work on Sundays (and on certain specified holidays) time and one-half wages for hours worked on that day, regardless of how many hours the employee worked during the week. Retail stores may not require employees to work on Sundays or on a holiday included in the statute, and an employee’s refusal to work on Sunday or on one of the specified holidays cannot be grounds for any type of penalty. Employers should note, however, that the retail premium pay requirement for Sundays and certain holidays is being phased out, with the applicable premium decreasing in stages each year until 2023, with no premium pay required beginning that year. The other Sunday and holiday work rules (i.e., that work must be voluntary and refusal to work cannot be grounds for any type of penalty) will continue to apply through and after 2023. There are three holidays that were not included in the bill which shall continue to require premium pay at this time. They are:

  1. New Year’s Day
  2. Columbus Day/Indigenous Peoples Day
  3. Veteran’s Day

How wage and hour laws are enforced

The U.S. Department of Labor Wage and Hour Division enforces the child labor, minimum wage, and overtime provisions of the Fair Labor Standards Act (FLSA). Government investigators have authority to inspect and copy an employer’s records, to interview employees, and to make determinations of FLSA violations. Based on the results of DOL audits, the Secretary of Labor, an individual employee, or a group of employees may sue an employer to collect past due minimum wages or overtime compensation.

Complaint process

The Payment of Wages statute also allows a private individual to file a claim against his or her employer. Massachusetts law allows an employee to recover three times his or her damages for violations of Massachusetts wage law. The employee may also obtain injunctive relief (that is, an order from the court requiring an employer to take a specific action or refrain from an action), other benefits, attorneys’ fees, and litigation costs.  

Generally, when the attorney general files a criminal complaint against an employer, the complaint must be filed within three months of the violation. However, an individual employee may file a criminal complaint up to six years from the violation.

Alternatively, the attorney general may issue a written warning or civil citation to an employer to correct any violation. In doing so, the attorney general may order the employer to pay civil penalty of up to $15,000 per violation, and up to $25,000 per violation for repeat offenders.

Civil remedies

The attorney general or a private individual may also seek civil remedies. An individual employee must first file a complaint with the attorney general's office, and then may bring a civil action for injunctive relief and damages. The employee must file its civil claim within three years of the violation.

Available remedies include:

  • an order from the court requiring the employer to do or refrain from doing an act in the future (for instance, changing that manner in which it pays wages going forward)
  • damages (up to three times the amount of the employee’s actual loss)
  • attorneys’ fees and costs. 

Finally, the DOL may impose civil fines of up to $2,203 for each repeated or willful violation.

Penalties

Willful FLSA violations (those violations in which a court finds an employer knew or should have known that pay practices were in violation of the FLSA) may result in criminal prosecution. First offenders are subject to a fine not to exceed $10,000. Second offenders are subject to a fine and maximum prison term of six months.

Massachusetts law includes severe penalties for violation of its wage laws. An employer may be subject to criminal and civil penalties for violation, including damages equal to three times the actual loss to affected employees. 

When an employer commits a willful violation of the minimum wage or overtime requirements, a court may impose criminal penalties, including fines of up to $25,000 or imprisonment for up to one year, or both, for a first offense. In addition, officers, agents, and employees of the employer may be found individually liable for a violation. Finally, an employer may not retaliate against an employee who complains to the Attorney General, or who participates in any related investigation or proceeding.


The FLSA is very complex and involves numerous detailed regulations. Moreover, in the last few years, lawsuits for failure to pay overtime compensation have increased dramatically, with companies collectively paying more than $1 billion annually to resolve these claims. Thus, it is extremely important that employers consult an attorney at the earliest stage of any potential lawsuit or DOL audit involving wage and hour laws. This chapter only addresses a portion of the relevant laws and regulations related to wage and hour laws.

Equal pay requirements

The equal pay provisions of the Fair Labor Standards Act (FLSA), known as the Equal Pay Act (EPA), state that individuals who perform jobs requiring equal skill, effort and responsibilities at the same establishment may not be paid different wage rates based upon their sex. Massachusetts similarly has a law, the Massachusetts Equal Pay Act (MEPA), which prohibits discriminatory wage practices based on sex. The MEPA, passed in 1945, was the first law in the country to require comparable pay for comparable work. In 2016, the Massachusetts legislature enacted (and the governor signed) a new law - the Act to Establish Pay Equity - which updates and significantly modifies the MEPA. The Pay Equity Act went into effect on July 1, 2018, and it imposes important new requirements on employers. For a full discussion of the Massachusetts pay equity laws, including the changes effected by the new Pay Equity Act, please see Discrimination.

Enforcement

The equal pay provisions of the FLSA are enforced by the Equal Employment Opportunity Commission (EEOC). Recently the EEOC has increased enforcement of this Act in light of statistics revealing a persistent wage gap between the genders.

Statute of limitations

The Equal Pay Act has the same statute of limitations as other provisions of the FLSA – two years for ordinary violations and three years for willful violations. Liquidated (predetermined) damages are also available to claimants where the employer cannot show that its actions were taken in good faith.

Equal pay based on other characteristics

On January 29, 2009, the Lilly Ledbetter Fair Pay Act was signed into law. The Ledbetter Act further expands protection to employees with disparate pay claims. Unlike the Equal Pay Act, the Ledbetter Act covers more than just gender discrimination – it also protects against discrimination in pay based on:

  • race
  • color
  • religion
  • national origin
  • age
  • disability.

The Ledbetter Act further states that an unlawful employment practice occurs “each time wages, benefits, or other compensation is paid, resulting in whole or in part from a [discriminatory] decision or other practice.” So if an employee believes that she was denied a promotion as the result of a discriminatory practice, each paycheck she receives after that decision triggers the start of a new 180-day period within which she may file a claim of discrimination. 

If the employer committed an unlawful employment practice, the employee may be entitled to recover back pay for up to the two-year period before she or he filed the charge.

Courts deem the Ledbetter Act to be effective as of May 28, 2007, and it applies retroactively to all pending claims of discrimination after that date.

Deductions made from wages

Under Massachusetts law an employer may not make any deductions from an employee’s paycheck without both:

  • the employee’s written consent
  • the consent of the Massachusetts attorney general

if the deduction would bring the employee’s wages below minimum wage. Generally, even if an employer’s deduction would not reduce the wages below minimum wage, it should obtain an employee’s consent before taking such action. If an employer deducts from an employee’s wages for tardiness, the amount deducted may not exceed the amount the employee would have earned for working during that time.

Wage assignments

An assignment of wages is an agreement between an employee and a creditor, under which the employee agrees to let the creditor collect part of his or her wages from each paycheck in order to repay a debt.

The wage assignment must be in writing; signed by the employee; include the names of all the assignees; and state the total amount of money to be deducted from the employee’s pay and the repayment schedule.

An assignment must be accepted in writing by the employer in order to be valid and employers are not legally obligated to accept wage assignments. Many employers refuse to accept them because of the added payroll responsibilities associated.

Restrictions on garnishments

Wage garnishment occurs when an employer withholds a portion of an employee’s earnings for the payment of a debt as the result of a court order or other equitable procedure. 

Under federal law, the maximum amount of an individual’s disposable earnings (earnings after statutory withholding) that may be subjected to garnishment is the lesser of:

  • 25% of disposable earnings for that week
  • 30 times the federal minimum hourly wage in effect at the time the earnings are payable.

These restrictions do not apply to any debt due for a state or federal tax, child support or alimony, or any order of a bankruptcy court under Chapter 13 of the Bankruptcy Act.

Internal audits 

A prudent employer will audit its wage and hour practices to identify any potential violations before it is subjected to a lawsuit. These audits should focus on:

  • exempt status (particularly in light of the recent changes to white-collar exemptions) and classification of individuals as employees or independent contractors
  • proper recording of hours worked
  • correct calculation of overtime compensation
  • equal pay.

The assistance of an outside attorney is advisable for an audit to eliminate non-compliance with wage laws before a government agency investigates the business.

Government contractors 

In addition to the FLSA, other federal wage and hour laws may apply to employers that conduct business with the federal government.

Walsh-Healey Public Contract Act

This Act sets basic labor standards for employers with federal government contracts to manufacture or supply articles with a value of more than $15,000. Under this law, government contractors must pay prevailing wage rates and must conform to the requirements of the FLSA. The amount recoverable for violations of this Act includes the difference between the wages paid and the prevailing wage or benefit rate and liquidated (predetermined) damages to claimants. In addition, an employer may be excluded from future government work based on its violation of the Act.

Davis-Bacon Act

This Act covers mechanics and laborers engaged in federal public buildings and work projects with a value of $2,000 or more. Under this law, government contractors must pay prevailing wage rates and must conform to the requirements of the FLSA. An employer may be excluded from future government work based on its violation of the act. In addition, the employer may be required to pay back wages.

Service Contract Act

This Act covers employers with federal government service contracts worth $2,500 or more. Its provisions and enforcement are similar to the Walsh-Healey and Davis-Bacon Acts.

Avoiding liability

In light of the potential liability to employers and the amount of back pay and penalties that can be awarded in connection with a wage and hour investigation or lawsuit, internal wage and hour compliance audits are advisable.

Such audits should focus on:

  • exempt status
  • proper recording of hours worked
  • correct calculation of overtime compensation
  • equal pay
  • verification that rest and meal breaks are taken and recorded.

In connection with performing a wage and hour compliance audit, employers should seek the assistance of an outside attorney specializing in wage and hour issues. Of course, the value of a wage and hour compliance audit is severely diminished if any compliance issues discovered during the audit are not promptly remedied and resolved.

Summary 

Employers have seen a dramatic increase in wage and hour enforcement activity in the past several years. In addition to increased administrative enforcement, a number of individuals and groups of employees have brought private lawsuits alleging violation of wage laws. In Massachusetts, employers should be particularly wary of these claims because if an employee proves his or her claim, the employer must pay three times the amount of actual damages suffered, as well as the employee’s attorneys’ fees and costs. Thus, compliance with federal and state wage laws is essential, and employers should conduct self-audits at regular intervals.

Where to go for more information

U.S. Department of Labor Wage and Hour division

Massachusetts Executive Office of Labor and Workforce Development: