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  • Writer's pictureJennie Tannenbaum

Will Massachusetts Small Business Owners be made Blue by the New Blue Law changes?

It was late Saturday morning and Jae was looking anxiously at the newly released work schedule for the upcoming week, while thinking about whether she would be working on Sunday again. She was hoping to be off this Sunday, because she had been invited to her long time friend’s gathering to meet the newest member of the family. Awesome, exhaled Jae, she had Sunday off from work.

Jae usually didn’t mind working on Sundays, because up until the end of 2019, she was paid the Sunday premium pay which is 1.4x times her regular rate of pay as a non-exempt employee at the bookstore. However, Massachusetts has now changed this rate of pay beginning in 2020. The premium rate of pay at retail has decreased from 1.4x to 1.3x. And while this is not great for Jae, she can still decide if she wants to work on Sundays. Most retail employers in the state face the same restriction from 2019, that is, employees cannot be forced to work on Sundays and they cannot be retaliated against for refusing to work on a Sunday. If Jae decides to work on Sunday in the future she will receive the new premium pay of 1.3x.

A business in Massachusetts that violates these Sunday work laws also known as the Blue Laws faces a fine of a minimum of $20 and a maximum of $100 for the first violation. For each subsequent violation the fine is a minimum of $50 and a maximum of $200. If the rate of pay isn’t in compliance and the employee was retaliated against the fine can be up to $1,000.

Other laws affecting small businesses in Massachusetts have also changed, specifically hourly minimum wage requirements. In 2020 in Massachusetts the law concerning the hourly minimum wage changed as well, in addition to the Sunday premium pay. Previously, the minimum wage was $12.00 per each hour worked. Now in 2020 the minimum wage has increased to $12.75 each hour worked. So Jae will be happy that her pay increased by $0.75 an hour.

At the federal level under the Fair Labor Standards Act (FLSA) on January 1, 2020, the new overtime rule of increasing salary thresholds for exemptions for overtime requirements become effective. The salary threshold for white collar exemptions have increased from $455 a week to $684 a week. Also, increased is the threshold for highly compensated employees from $100,000 a year to $107,432 a year.

The federal changes grants businesses the right to use non-discretionary bonuses and incentive payment plans, such as, commissions to be paid at a minimum annually to meet up to 10 percent of the threshold for highly compensated employees. So what does all this mean for your small business?

Small businesses should have already reviewed the 2019 compensation plans to determine whether their employees who are categorized under the administrative, executive or professional exemptions were paid less than the $684 a week threshold. If this is so, then employers should have increased the pay of those employees to a minimum of $684 to meet the threshold, in order for those employees to remain in the overtime exempt category. Alternatively, employers could have categorized those employees into the non-exempt category. If this alternative was chosen then employers should be tracking hours worked as well as paying employees overtime for hours worked over 40 hours a week.

If you fail to pay your employees in accordance with the changes in the law you are leaving your small business open to liability. If you are unsure how to comply with the new laws contact Simply Good Law for assistance.

This article is for information purposes only and is not meant to be construed as legal advice. For more information or discussion contact me at jennie@simplygoodlaw.com or at 978-681-0017.

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