Many states are imposing stricter penalties for employers who illegally avoid paying unemployment insurance and workers’ comp by misclassifying workers as independent contractors.
In Somers v. Converged Access, the Massachusetts Supreme Judicial Court ruled that the independent contractor law is a strict liability statute. This means that the employer’s intent in misclassifying a worker is irrelevant. Therefore, the worker was entitled to compensation for wages, overtime and benefits that he would have received, if he had been correctly classified as an employee. In addition, the employee was permitted to keep the $65 per hour that the company paid him as an independent contractor – an amount far in excess of an employee’s wage in the same job.
The Massachusetts company was required to pay the employee for benefits including vacation and holiday pay. In addition, the company was ordered to pay the employee overtime at a rate of $97.50 per hour – 1.5 times the worker’s $65-per-hour wage.
The state minimum wage in Massachusetts will increase by 50 cents from $7.50 to $8.00 on January 1, 2008. This change puts the state’s minimum wage on a par with California, tied at second highest in the nation, after the Washington state minimum wage.
Under significant exceptions to the minimum wage, however, tipped employees can be paid just 2.63 per hour, as long as they earn an average of $5.37 per hour in tips over the shift. Workers in the agricultural industry can be paid just $1.60 per hour.
The Massachusetts minimum wage statue does not require employers to pay a premium for weekends, holidays or night work. However, the state Blue Laws do require that some retailers pay a premium for Sundays and holidays.
Massachusetts is one of a handful of states that requires employers to compensate employees for any accrued vacation time upon termination. However, the state does not mandate any paid sick days or severance pay.
Most workers are entitled to overtime at 1.5 times the usual rate of pay after 40 hours in one week under Massachusetts minimum wage law. However, a number of employees are excluded from the state’s overtime provision, including:
Residential Janitors who are furnished with living quarters
Handicapped person under special license
Switchboard Operator for the Phone Company
Truck Driver or Helper covered by ICC
The state also exempts employees of a seasonal business from overtime payments, provided that business operates less than 120 days per year.
Employees in several industries are also exempt from the state overtime provisions, such as those who work in hotels, restaurants, hospitals, gas stations, nursing homes, and amusement parks. Employees in non-profit schools or colleges are also exempt from overtime, as are workers at non-profit summer camps.
Some of the workers named above may be entitled to overtime under federal regulations.
When labor laws change, employers are required to post the updated information with new labor law posters. In 2008, several changes will occur so that employers will need to update their information. Complete listings are available at www.laborlawcenter.com.
Most of the states in the country have enacted state minimum wage laws. Over a dozen of these states will introduce increases in these minimums on January 1, 2008.
In Arizona, Florida and Montana, the minimum will see a small raise of just a few cents per hour. Arizona’s minimum will go from $6.75 to $6.90. Florida will add 14 cents to its current rate of $6.65 to get $6.79. Only nine cents will be added to Montana’s minimum wage to go from $6.15 to $6.26 per hour.
Conversely, Iowa will add over a dollar to raise their minimum from $6.20 to $7.25 per hour. New Mexico, too will add more than a $1 per hour, from $5.15 to $6.50 per hour.
Later in the year several more states will up their minimum wages, too. July 1, 2008, Kentucky will go up almost a dollar per hour from $5.58 to $6.55. Ninety cents will be added to the minimum wage in Pennsylvania of $6.25 to reach $7.15 per hour.
The federal minimum wage will go into effect on July 24, 2008 at $6.55 per hour. Many states have legislation that connects their minimum wages to the federal minimum, including Virginia, Indiana and Nebraska. On July 24, 2008, then, these states will increase their minimum wages, too. Washington D. C. has tied its minimum to the federal at exactly one dollar more, so when the new federal minimum debuts on July 24, D.C.’s minimum will go up to $7.55 per hour.
If, as an employer, the changes are not clear, or more information is needed regarding how and what to update, businesses can get information on all 50 states online at www.laborlawcenter.com.
Our consideration of states with overtime laws progresses to Massachusetts. Like many other states in the Union, Massachusetts has a very traditional approach to overtime law, meaning they accept the usual standard for most employees of the 40 hour work week.
So like many states and like the federal regulations on overtime in the Fair Labor Standards Act, Massachusetts overtime law says that a worker is entitled to time and a half pay for any time they spend over these 40 hours working in a week.
The Massachusetts state law, though, does not entitle workers to any special benefits for overtime work in a specific day. For instance, if you were a worker who put in 9 hours on a Friday, you would not be entitled to time and a half for that extra hour, considering that 8 hours is the usual workday. Instead, all that would matter would be whether you worked more than 40 hours once that entire week, or seven-day period, was over.
Where Massachusetts also sets its own standard is with compensatory time. Unlike other states, Massachusetts does not permit compensatory time. That means that employees who are entitled to overtime must take overtime pay when their due it, instead of using that overtime pay to offset hours later on.
Massachusetts law even makes it so clear as to say that no employee or employer is beyond the reach of this facet of their overtime law even if they come up with an agreement on compensatory time ahead of time.
The state also delves into the whole differentiation between nonexempt and exempt workers, meaning those who are entitled to overtime and those are not. The law says that just because a worker is salaried, for instance, that doesn’t make him or her automatically exempt from overtime. It is more the nature of the job, than whether they are salaried or not, that truly matters, the law says.