Wage and Hour Compliance

Questions about an employer’s wage and hour obligations are among the most frequently asked—understandably so. Employers in Massachusetts have an obligation to comply with both the federal Fair Labor Standards Act (FLSA) and the state laws that define wage and hour obligations. The state and federal laws, regulations, rules and tests are not mirror images of each other. It is often difficult to pin down opinion letters and other guidance published by the state and federal departments of labor. The reality is the common law (e.g. declaratory rulings, case law, and opinion letters) is more often the source of compliance obligations, rather than the statutes. Three commonly misunderstood mandates: wages for training time and travel time, and required break time.

• Training time: When an employer requires an employee to participate in training, such time is considered “hours worked” for the purposes of calculating overtime pay. Training programs that fall outside of the normal working hours and are completely voluntary do not constitute “hours worked.”
• Travel time: An employer does not have to pay an employee for the time spent commuting to and from work. However, an employer is obligated to compensate an employee for travel during the work day if that travel benefits the employer.
• Break periods: Perhaps the most misunderstood of the wage and hour requirements. Employers must provide each employee who works six or more consecutive hours with a thirty minute unpaid meal break. Employers may decide to pay for the break time. Unlike most wage and hour rights, an employee may voluntarily waive a meal break but it must be in writing.

The training time and travel time rules are summarized generally here and can become much more complicated when specific fact patterns are assessed. The good news is we can help. Please contact us if you have questions or if you would like us to audit your practices to ensure compliance.

Smoker Free Workplaces?

The New York Times is reporting a trend from smoke free to smoker free workplaces in hospitals and medical businesses in many states, including Massachusetts. Frustrated with the lack of results with softer efforts to stop smoking and the concern about smoker productivity, new rules are treating cigarettes like an illegal narcotic. Job seekers must submit to urine tests for nicotine and new employees caught smoking face termination. This is a tricky issue and will no doubt bring challenges. Smoking could be seen as a pretext for certain protected classes in discrimination claims. If smoking bans achieve their goals of driving down healthcare costs, is it the thin edge of the wedge for bans on other legal activities like drinking alcohol or riding a motorcycle?

For now, we are taking a watch and see on this issue and recommend the same for employers.

IRS Tax Credit

Maybe you received a postcard from the IRS regarding employer eligibility for the Small Business Health Care Tax Credit. Even if you did not, you may still qualify if:

• Health care coverage of at least 50% of the cost of the single rate is provided to some workers;
• Employers must have less than the equivalent of 25 full-time workers; and
• Average annual wages must be below $50,000.

Both taxable and tax-exempt employers are eligible. Check out www.irs.gov for more details.

The Commonwealth Gets Busy.

Audits and Enforcement Up
If you thought those Executive Orders calling for Joint Task Forces did not do much, you were wrong—at least this time. In Massachusetts, the Joint Task Force (JTF) on the Underground Economy and Employee Misclassification, 2010 Annual Report recently reported on its second full year of operations (April 2009-March 2010). The state recaptured more than $6.4 million in unpaid taxes, workers compensation and unemployment insurance---up $5 million from the JTF's first-year total. Other highlights from the report:

• $2,071,211 in new unemployment insurance taxes and $188,788 in Fair Share contributions;
• $500,000 in restitution and penalties plus 5 years probation in settlement of a criminal case in which owner of a temporary employment agency pleaded guilty to 65 criminal counts of violating wage and hour laws;
• 3,676 stop work orders for lack of workers’ compensation insurance, resulting in $1,867,394 in fines.

These results ensure more investigations are on the way and the Joint Task Force will stay active as a revenue generator in a cash- starved state. View full report:

Is There a New Protected Class in the Works?
Governor Deval Patrick signed an executive order forbidding state government and its contractors from discriminating on the basis of “gender identity or expression.” Many believe that this Executive Order will create a new protected class for all workplaces in Massachusetts. There are currently 11 protected classes—can you name them?

You can reach us at 508-548-4888 or info@foleylawpractice.com.