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Employment Law and Litigation

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Changes to FLSA, if unimpeded, may have large repercussions for employers

Joseph Coupal - Monday, December 05, 2016

Pierce and Mandell, PC, Boston, MABy Karen Rabinovici

The Fair Labor Standards Act (FLSA), which applies to all employees employed in the private sector as well as to government employees, establishes the minimum wage, overtime pay requirements, recordkeeping requirements, and child labor standards.  It was the FLSA that first introduced the forty-hour workweek, the concept of minimum wage, and time and a half for overtime work, along with prohibiting “oppressive child labor,” something that was common in 1938 when the FLSA was first drafted.

The Department of Labor has long tried to make changes to the FLSA’s overtime regulations, and the fruits of its labor may be just around the corner, and were set to go into effect December 1, 2016.  The changes, however, are not without opposition, and the fate of the changes is currently on hold.  The changes, should they go forward, may impact dental and medical practice employers in particular, who often find themselves in murky waters when classifying employees as exempt or non-exempt.

The Changes

In determining which employees are exempt from receiving overtime pay and which employees are not exempt, the FLSA takes earned compensation into account.  Under the old rule, if executive, administrative, and professional employees earned less than $455 per week, or $23,660 per year, such employees were not exempt from receiving overtime pay.  The new rule changes those benchmarks to $913 per week, or $47,476 per year, increasing the number of non-exempt employees.  Additionally, under the old rules, employees who are exempt from receiving overtime pay under provisions relating to “highly compensated employees” must be paid $134,004 per year, up from $100,000, again increasing the number of non-exempt employees.

The new rule will prompt employers to make necessary changes to their classification of executive, administrative, and professional employees.  If an employee’s salary no longer meets the new minimum requirements, and another exemption does not apply, reclassification may be necessary, accompanied by overtime pay.  Alternatively, employers may increase salaries to maintain exemptions.

The Challenge

In an 11th hour plot twist, on November 22, 2016 the U.S. District Court in Sherman, Texas issued an order enjoining the Department of Labor from implementing the new rule.  Prior to this, 21 states filed an emergency motion for a preliminary injunction to stop the new rule, arguing that the Department of Labor has exceeded its authority in increasing the salary minimums for exempt employees.  Additionally, the fact that the changes do not take the nature of employee duties into account, which can often determine whether an employee is exempt or non-exempt, has been another argument of the new rule’s opponents.  A date for a full ruling by the Court has not yet been announced.  So, until the Court rules on the Department of Labor’s authority to implement such changes, employers do not need to comply with the new rule and can maintain the status quo.

Pierce & Mandell’s experienced employment law attorneys can guide employers and workers through the classification and employment process.  We encourage employers and workers alike to contact us to ensure that terms of employment are compliant with the relevant laws.

Can Employers Uncover An Employee’s Criminal Records?

Joseph Coupal - Wednesday, March 09, 2016

By: Scott M. Zanolli

When one considers the phrase “sealed record,” what words or phrases come to mind? Airtight?  Impenetrable?  While records should remain sealed to an employer who may file a Criminal Offender Record Information (CORI) request as part of a background check on a potential employee, neither word accurately describes the working definition for sealed records under Massachusetts law (M.G.L. Chap. 276, § 100A). Even after a record is officially “sealed,” there are certain government agencies that can always access criminal records.  For example criminal justice agencies, firearms licensing authorities, and some government agencies that work with children may still obtain all CORI records.

The general rule in Massachusetts is that someone wishing to seal a criminal record can petition the state Commissioner of Probation after a waiting period of five years for a misdemeanor conviction or after a waiting period of ten years for a felony conviction.  The clock resets, however, if the petitioner is convicted of another misdemeanor or felony during that waiting period (in Massachusetts or in another state). And the waiting period starts the date the petitioner is found guilty OR completes a period of incarceration – whichever date is later.

Some other twists and turns:

  • A judge can seal a case before the waiting period runs;
  • Courts can also seal dismissed cases or cases where the prosecutor dropped the case (nolle prosequi) or cases that ended up with a finding of not guilty;
  • If a case is continued without a finding (CWOF), the waiting period commences on the date of the CWOF, not the later date set by the court for the final dismissal;
  • Some charges come with longer waiting periods, such as restraining order violations.
  • Some misdemeanors are treated as felonies when it comes to the waiting period and carry the ten year waiting period, not the five year standard;
  • Sex offense convictions carry longer waiting periods before a record can be sealed (if indeed it can be sealed). Any conviction for a sex offense that results in having to register with the Sex Offender Registry is not even eligible for consideration for sealing until 15 years after the conclusion of the case, including release from incarceration and the end of supervision and probation;
  • And then there are convictions where a record can never be sealed. These are Level 2 and Level 3 sex offenses and certain firearm-related convictions.

Pierce & Mandell attorneys routinely represent employers and employees in matters involving CORI requests, sealed records, and other regulatory issues impacting the employer-employee relationship.  Visit us at www.piercemandell.com or contact Scott Zanolli at scott@piercemandell.com.

Small Businesses Fight Back Against PPACA Financial Burdens

Joseph Coupal - Tuesday, July 28, 2015

By Karen Rabinovici

Small business owners who have decided to reimburse their employees’ health insurance premiums as a way of lowering the burdensome cost of directly providing health insurance are learning the meaning of the expression “no good deed goes unpunished.”

Faced with the expense of providing health insurance as required by the Patient Protection and Affordable Care Act (“PPACA”), some small business employers instead encouraged their employees to buy their own health insurance plans (either on or off the marketplace) and then reimbursed their employees for all or a portion of the premiums.

But what employers thought was a good-faith attempt to help meet the health insurance needs of employees at a lower cost to the business is instead being viewed as a violation of the PPACA and could cost employers far more money than providing a health insurance plan would have, as staggering penalties begin to add up.

The described reimbursement arrangement, also called employer payment plans, are considered under the PPACA to be part of a plan, fund, or other arrangement established or maintained for the purpose of providing medical care to employees. As such, these arrangements are considered group health plan coverage under the PPACA and are subject to the market reform provisions of the PPACA applicable to group health plans. Such arrangements cannot be integrated with individual market policies, and as such fail to comply with the PPACA market reforms. Therefore, reimbursement arrangements violate the PPACA.

This violation comes at a heavy financial penalty of up to $100.00 for each day such an arrangement is in place, per applicable employee. This can total $36,500 per year per employee.

Small businesses are not taking this sitting down. On Thursday July 23, 2015 small business owners, organized by the National Federation of Independent Business, took their case to Capitol Hill to lobby Congress to change this provision of the PPACA. Their argument is that the penalty punishes small businesses that cannot afford to provide employer-sponsored health insurance, but are still trying to help employees meet their health insurance needs through another method. Larger businesses have also expressed opposition to this provision of the PPACA.

The proposed legislation aimed at changing that provision is the Small Business Healthcare Relief Act, which enjoys bipartisan support in both the House and Senate where it has been introduced. In its current form, the Act allows employers with fewer than 50 employees to offer reimbursement arrangements without penalties. Those who support the Act believe that if President Obama truly desires, as stated, common-sense improvements to health care, then the Act should pass.

If the Act does not pass, small employers do have one other option. Although reimbursement arrangements are considered violations of the PPACA and are subject to heavy penalties, additional compensation arrangements are not. This alternative arrangement allows employers to provide additional compensation to employees that is intended to help meet health insurance needs. While employees have the option to use the additional compensation to help pay for health insurance premiums, employers cannot make such use a condition of the provision of additional compensation, and thus cannot guarantee that employees will use the additional compensation to acquire insurance. This option, therefore, is rendered less effective for helping meet employees’ health insurance needs.

According to the U.S. Treasury Department, 96% of all businesses in the U.S. have 50 or fewer employees, so their collective voice in Washington will certainly be heard. But until Congress acts, small business owners will have to tread carefully or risk an even greater financial burden than the one they were trying to alleviate in the first place.

State Court Joins Federal Court to Uphold Earned Sick Time Law, Employers Try to Navigate New Law Effective July 1, 2015

Joseph Coupal - Tuesday, July 14, 2015

By: Curtis B. Dooling

A Massachusetts District Court judge upheld the earned sick time law on Monday (July 13), the second court to uphold the new law after construction contractors unsuccessfully challenged the law. A U.S. District Court judge dismissed their claims last week.

The earned sick time law, which requires nearly all Massachusetts employers to provide earned sick time to their employees, was approved by  voters last  November and  went into effect  July 1, 2015.

Basic Summary of Sick Time Law

Employees who work for employers having eleven or more employees can earn and use up to 40 hours of paid sick time per calendar year, while employees working for smaller employers can earn and use up to 40 hours of unpaid sick time per calendar year. Employers must provide all employees, including part-time and seasonal employees, one hour of sick time for every 30 hours worked. The maximum amount of sick time an employee can accrue in one year is 40 hours.

An employee can use earned sick time if required to miss work for the following reasons: (1) to care for a physical or mental illness, injury or medical condition affecting the employee or the employee’s child, spouse, parent, or parent of a spouse; (2) to attend routine medical appointments of the employee or the employee’s child, spouse, parent, or parent of a spouse; or (3) to address the effects of domestic violence on the employee or the employee’s dependent child.

Employees can carry over up to 40 hours of unused sick time to the next calendar year, but cannot use more than 40 hours in a calendar year. Employers are not required  to pay employees for unused sick time at the end of their employment. If an employee misses work for a reason eligible for earned sick time, but agrees with the employer to work the same number of hours or shifts in the same or next pay period, the employee will not have to use earned sick time for the missed time, and the employer will not have to pay for that missed time. Employers may not interfere with, restrain or deny the exercise of an employee’s rights under the law and employers may not retaliate against employees for exercising their rights under the law.

The Massachusetts Attorney General’s Office (“AGO”) has issued final regulations (available at http://www.mass.gov/ago/docs/regulations/940-cmr-33-00.pdf) regarding the interpretation and enforcement of the law.

A Brief Summary of the AGO’s Final Regulations For  Employers and Employees

  • An employer’s paid time off policy already in place may be substituted for earned sick time as long as 40 hours of time off under the policy complies with the following:
    • Accrual at the rate of no less than one hour for every 30 hours of work;
    • Pay at the employee’s same hour rate;
    • Access to time off for all uses authorized under the law;
    • Availability with the same rules concerning notice and documentation;
    • Offers the same job protections.
  • Employees must be paid at the “same hourly rate” when using earned sick time, with specific carve-outs for tipped employees, employees paid on commission and salaried employees.
  • Employees may accrue and use their time if their primary place of employment is in Massachusetts.
  • The smallest increment of sick time employees may use is one hour.
  • Employees may not use sick time as an excuse to be late for work. If an employee engages in a clear pattern of taking leave on days just before or after a weekend or vacation, an employer may discipline the employee for misuse of sick leave time unless the employee provides proof or verification of authorized use of sick leave.
  • Employees may retain earned sick time when they are terminated and rehired with certain restrictions.
  • Employees must provide notice to their employers when using sick time except in cases of emergency.
  • Employers can require written documentation (within seven days, with certain exceptions) for an employee’s use of sick time in the following circumstances:
    • if the leave exceeds 24 consecutively scheduled work hours;
    • exceeds three consecutive days on which the employee was scheduled to work;
    • occurs within two weeks before an employee’s final scheduled day of work, except in cases of temporary employees;
    • occurs after four unforeseeable and undocumented absences within three-month period;
    • for employees aged 17 and under, occurs after three unforeseeable and undocumented absences within a three-month period.

Understandably, many employers are concerned with the daunting task of implementing a sick leave policy that fully complies with the statute and the newly-enacted regulations. Pierce & Mandell’s experienced employment law attorneys are here to guide employers through this process. We strongly encourage employers to contact us in order to proactively implement compliant sick leave policies.

Employment Law Rights and Sexual Harassment Laws in Massachusetts

Joseph Coupal - Thursday, February 28, 2013

Employment Law Rights in Massachusetts: The Latest Developments from the Massachusetts Commission Against Discrimination on Sexual Harassment and Discrimination

By: Michael C. Fee

Massachusetts General Laws c. 151B prohibits sexual harassment in the workplace.  Sexual harassment is defined as “sexual advances , requests for sexual favors, and other verbal or physical conduct of a sexual nature when: (a) submission to or rejection of such advances is made either explicitly or implicitly a term or condition of employment and (b) such advances, requests or conduct have the purpose or effect of unreasonably interfering with an individual’s work performance by creating an intimidating, hostile, or sexually offensive work environment.

In order to prove a claim of hostile work environment harassment, a complainant must prove that he or she was: (1) subjected to sexually demeaning conduct; (2) the conduct was unwelcome; (3) the conduct was objectively and subjectively offensive; (4) the conduct was sufficiently severe or pervasive as to alter the conditions of employment and create an abusive work environment; and (5) the employer knew or should have known of the harassment and failed to take prompt and effective remedial action. See College-Town Division of Interco, Inc. v. MCAD, 400 Mass. 156, 162 (1987); Ramsdell v. Western Mass Bus Lines, Inc., 415 Mass. 673, 678 (1993).

In a case recent decided by the Massachusetts Commission Against Discrimination, Avila v. J&S Restaurant, et al., Docket No. 09-BEM-01557, a complainant alleged that she was subjected to unwelcome touching, comments and propositions of a sexual nature by her restaurant owner boss.  She testified that such conduct occurred on a number of occasions and was demeaning, intimidating and threatening to her.  Notable to the Hearing Officer was the fact that the complainant was a relatively small woman, and the respondent a very tall, large man.  The complainant alleged that she was intimidated by his size and physical strength, and that his conduct included a physical altercation that began with the boss cornering her and touching her breast. The incident frightened and intimidated the woman sufficiently to cause her to leave her employment and to file a criminal complaint for assault and battery.

In proceedings before the Massachusetts Commission Against Discrimination, evidence of sexual harassment must be considered from the perspective of a reasonable person in complainant’s position, and by evaluating all the circumstances, including the frequency of the conduct, its severity, whether it was physically threatening or humiliating, and whether it unreasonably interfered with the worker’s performance .  See Scionti v. Eurest Dining Service’s, 23 MDLR 234, 240 (2001) citing Harris v .Forklift Systems, Inc., 510 U.S. 17 (1993).  Also relevant is the subjective standard of sexual harassment, which requires a determination as to whether the complainant personally experienced the behavior to be unwelcome. See Couture v. Central Oil Co., 12 MDLR 1401, 1421 (1990).  In this case, the Hearing Officer determined that the Complainant met all the requisite standards of proof.

In order to find that a worker who has left a job was constructively discharged, the evidence must show that the conditions under which complainant worked were so intolerable that a reasonable person would have felt compelled to resign. Choukas v. Ocean Kai Restaurant, 19 MDLR 169 (1997).  On all of the evidence in Avilla, the Hearing Officer determined that the woman had no option but to resign her employment after the physical confrontation with her boss. Prior to those events, she was intimidated, demeaned and humiliated by her employer’s unwelcome sexual comments and propositions, but his actions of that evening caused her to feel threatened and fearful.  The evidence also showed that there was no individual in the workplace with whom complainant could lodge a complaint, no avenue for seeking relief, and that she was without expectation that the situation would improve.  On those facts, the Hearing Officer found that the woman’s refusal to return to work after the altercation was the result of a constructive discharge.

Upon a finding of unlawful discrimination, the Massachusetts Commission Against Discrimination is authorized to award remedies to make a complainant whole and to ensure compliance with the anti-discrimination statutes.  G.L. c. 151B, §5; Stonehill College v. MCAD, 441 Mass. 549, 576 (2004).  The Commission may award monetary damages for, among other things, lost wages and emotional distress suffered by a complainant as a direct and probable consequence of the unlawful discrimination.  In this case, the woman was awarded lost wages and tips for a period exceeding six months after she left her employment, as well as damages for emotional distress in the amount of $50,000.00.  While awards for emotional distress are not commonplace, when appropriate they must be fair and reasonable, as well as proportionate to the harm suffered.  It is also the burden of the complainant to show a sufficient causal connection between the respondent's unlawful act and the complainant's emotional distress. Stonehill College v. Massachusetts Commission Against Discrimination, et al., 441 Mass. 549, 576 (2004).  In this case, the woman presented substantial evidence that her employer’s conduct caused her grievous mental pain and suffering, and as a result, the Commission felt a substantial monetary award for her emotional distress was warranted.

If you believe that your employment law rights have been violated, or are an employer with questions on how best to comply with statutory obligations, contact the employment law professionals at Pierce & Mandell.

The Facts About Pregnancy Related Employment Discrimination

Joseph Coupal - Thursday, January 31, 2013
By: Michael C. Fee

It is unlawful for an employer to terminate a pregnant female’s employment, or to take any other adverse employment action against the employee, on account of pregnancy.  Under Federal law, The Pregnancy Discrimination Act amended Title VII of the Civil Rights Act of 1964, and provides that discrimination on the basis of pregnancy, childbirth, or related medical conditions constitutes unlawful sex discrimination.  The law covers employers with 15 or more employees, and mandates that women who are pregnant or affected by pregnancy-related conditions must be treated in the same manner as other applicants or employees with similar abilities or limitations.

Some examples:

  • An employer cannot refuse to hire a pregnant woman because of her pregnancy, or because of the prejudices of co-workers, or customers.
  • An employer may not single out pregnancy-related conditions for special procedures to determine an employee's ability to work.
  • If an employee is temporarily unable to perform her job because of her pregnancy, the employer must treat her the same as any other temporarily disabled employee.
  • Pregnant employees must be permitted to work as long as they are able to perform their jobs.
  • Employers must hold open a job for a pregnancy-related absence the same length of time jobs are held open for employees on sick or disability leave.
  • Any health insurance provided by an employer must cover expenses for pregnancy-related conditions on the same basis as costs for other medical conditions.
  • Employers must provide the same level of health benefits for spouses of male employees as they do for spouses of female employees.
  • Pregnancy-related benefits cannot be limited to married employees.
  • Employees on leave because of pregnancy-related conditions must be treated the same as other temporarily disabled employees for accrual and crediting of seniority, vacation calculation, pay increases, and temporary disability benefits.

In Massachusetts General Law Chapter 151B, sec. 4 makes it an unlawful practice to discharge an employee because of her sex. “Pregnancy and childbirth are sex-linked characteristics and any actions of an employer which unduly burden an employee because of her pregnancy or the requirement of a maternity leave are considered sex discrimination.” School Committee of Braintree v. MCAD, 377 Mass. 424, 430 (1979); Gowen-Esdaile v. Franklin Publishing Co., 6 MDLR 1258 (1984) (termination of complainant during troubled pregnancy because of fears of further absences deemed unlawful sex discrimination).
 
Claims for pregnancy related employment discrimination are often brought in the Massachusetts Commission Against Discrimination, or MCAD, where a complainant must establish a prima facie case by demonstrating that (i) she was a member of a protected class (i.e. pregnant); (ii) she was performing her job at an acceptable level; (iii) she was terminated from her employment or otherwise subject to an adverse employment action; and (iv) her employer sought to fill the position by hiring another individual with similar qualifications, or that complainant’s termination occurred in circumstances that would raise a reasonable inference of discrimination.  Abramian v. President & Fellows of Harvard College, 432 Mass. 107, 116 (2000); Wynn & Wynn v. MCAD, 431 Mass. 655, 665 (2000); Weber v. Community Teamwork Inc., 434 Mass. 761 (2001); and Sullivan v. Liberty Mutual Ins. Co., 444 Mass. 34 (2005).
    
If you are an employee or employer with questions about your rights or obligations under state and federal laws that prohibit employment discrimination on the basis of pregnancy, contact the Pierce & Mandell employment litigation team.

Non-Compete Agreements in Massachusetts

Joseph Coupal - Wednesday, January 09, 2013
By Michael C. Fee

Highly compensated executives are routinely required to sign non-compete agreements as a condition of their employment.  It is well-accepted that employers have a legitimate interest in protecting their investment in their employees, and courts are often called upon to balance such concerns against an employee’s right to make a living in his or her chosen field.

So, are non-compete agreements enforceable? It depends.  Massachusetts appellate courts have extensively addressed the enforceability of employee non-compete agreements and have articulated a variety of factors that will be considered in determining the enforceability of a specific agreement.

First, it's essential to understand the employer’s purpose in having an employee sign a non-compete agreement.  What interest is actually being protected?  Non-compete agreements often address issues such as non-disclosure of an employer’s confidential information, non-solicitation of an employer’s employees and clients, and non-competition with the employer.  But courts will often require proof that an agreement’s particular, restrictive language is reasonably related to the protection of an employer’s legitimate business interest.

When considering the enforceability of a covenant not to compete, both employer and employee must consider the reasonableness of its time and geographic restrictions, and whether the terms are reasonably tailored to protect the legitimate business interests of the employer. Most judges disfavor non-compete agreements and will be quick to reject overly broad or unduly restrictive provisions, however, in certain circumstances, carefully crafted agreements will be enforced.

If you are in a situation where a non-compete agreement may affect your present or future employment, or are an employer seeking guidance on what type of non-compete provisions will pass judicial scrutiny, please contact Pierce & Mandell’s business and employment lawyers for assistance.


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