Massachusetts Delays Family and Medical Leave Act Payroll Contribution Three Months

Late Tuesday evening, news broke from Beacon Hill that the payroll tax funding the Paid Family and Medical Leave Act – scheduled to take effect on July 1st – is being delayed three months to October 1, 2019.  According to a joint statement issued by Governor Baker, House Speaker DeLeo, and Senate President Spilka, the delay is intended “[t]o ensure businesses have adequate time to implement the state’s Paid Family and Medical Leave program….”  It is expected that the legislature will pass, and the Governor will sign, an emergency bill over the next few days to officially delay the implementation of the payroll tax.

The joint statement also foreshadowed the legislature’s intent to “adopt technical changes to clarify program design.”  At this time, it is not clear what “technical changes” the legislature is considering.  It appears, however, that to maintain the amount of pre-funding and not reduce total contributions paid to the new family and medical leave trust fund, the contribution rate will be increased from .63 percent to .75 percent of wages when withholding of contribution amounts begin on October 1, 2019.

We will continue to monitor all developments regarding the Paid Family and Medical Leave Act.  Please contact any member of the Labor, Employment and Employee Benefits Group if you have any questions.

Posted in FMLA | Tagged , , | Leave a comment

Department of Family and Medical Leave Announces Extension of Time to Provide Notice to Employees

On May 1st, the Commonwealth’s Department of Family and Medical Leave announced that the deadline for the employer notice to employees has been extended from May 31, 2019 to June 30, 2019.  The notice, which may be provided electronically, must include the opportunity for an employee or self-employed individual (which would include independent contractors) to acknowledge receipt or decline to acknowledge receipt of the information.

It is anticipated that the Department will be publishing further updates as the final regulations deadline of July 1, 2019 approaches.  We will continue to provide updates as appropriate. 

If you have any questions on the above requirements or concerning the Commonwealth’s Paid Family and Medical Leave Law, please contact any member of Mirick O’Connell’s Labor, Employment and Employee Benefits Group.    

Posted in Leave Laws | Tagged , | Leave a comment

A Rebalancing for Wage Act Claims and Class Actions?

Citing three Wage Act cases in 2018, I raised the question in this space whether the Massachusetts Supreme Judicial Court was now taking a more pro-employer view. With appointees of Governor Baker now holding a majority of the Court, did those three decisions in which the Court adopted a narrow interpretation of the Massachusetts Wage Act, G.L. c. 149, §148, mean that the interests of employers might be in the ascendancy? A fourth Wage Act decision decided in April 2019, however, suggests that those questions were premature.
In Gammella v. P.F. Chang’s China Bistro, Inc., the Court took up the appeal of a plaintiff-employee whose attempts to assert a class action based upon wage violations had been thrown out at the trial court level. The case involved alleged “reporting pay” violations by the defendant-employer. Specifically, “reporting pay” is required when an employee who appears for work is sent home early. When sent home early, the employee must be paid for at least minimum wage for three hours.
Mr. Gammella’s individual “reporting pay” claim was small – $453. He therefore sought class certification which would enable him to assert “reporting pay” claims on behalf of hundreds of employees of the defendant-employer who in the aggregate had been sent home early 7,000 times over a four year period. If proven, the class claims would dwarf the individual claims of Mr. Gammella.
A Superior Court judge denied class certification. He found that the plaintiff had failed to show that a sufficient number of those 7,000 instances were entitled to “reporting pay” due to violations by the employer to satisfy the class action numerosity requirement. In that regard, the lower court had held that the plaintiff’s showing had failed to establish which employees had been sent home for reasons that would trigger “reporting pay” and which had left early for reasons for which no such payment was required (for example, the employee had asked to leave early). Because of that uncertainty, the plaintiff’s proof failed and class certification was denied.
After successfully defeating the class certification attempt, the defendant-employer had then employed a tactic to prevent the plaintiff from appealing that denial. In that regard, it tendered a certified check for all of the payments that the plaintiff claimed were due. Following the plaintiff’s rejection of that check, the defendant argued that his claim should be dismissed. Adding insult to the injury of the denial of class certification, a different Superior Court judge agreed and found that the plaintiff’s rejection of that offer rendered his individual case moot. The case was then dismissed in its entirety.
On appeal, the Supreme Judicial Court sided with the employee, vacating the dismissal and denial of class certification. The Court then remanded the case for a further consideration of whether the class should be certified.
In reaching that conclusion, the Court looked askance at the employer’s obstruction of the plaintiff-employee’s efforts to develop the facts that might have permitted him to meet the class requirements. Specifically, the employer had provided records showing employees who had been sent home early, but its records did not show why. The employer also refused to provide employee names effectively handcuffing the plaintiff’s ability to show that the reasons were illegitimate and should have triggered the payment requirement. The uncertainty created by the defendant’s strategic “information monopoly,” the Court held, should not be held against the plaintiff-employee, but rather against the employer. Giving the benefit of the doubt to the employee, the Court held that it was “reasonable to infer that the number of plaintiffs would satisfy the numerosity requirement.”
The Court also rejected the employer’s argument that the plaintiff-employee’s refusal to accept its “make whole” offer should render his individual claim moot. Recognizing that such a finding would have the effect of terminating the entire litigation and avoiding the possibility of an appeal of the class certification denial, the Court overturned the lower court’s mootness ruling and dismissal. In doing so, the Court avoided giving the defendant the practical power to make the denial of class certification questions unreviewable through this type of clever buy-out strategy. The net effect was that the Court revived the plaintiff-employee’s individual claim and permitted him a chance to relitigate the class question aided by the Court’s strong language tilting in favor of certification.
In light of this recent opinion, it is apparent that the potential “lean” of the Baker Court perceived by this author [See “WARN Act Violations ≠ Wage Act Violations,” January 3, 2019; “Violation of Sick Time Payout Policy Not a Wage Act Violation,” January 31, 2018; “A Bridge Too Far – Individual Liability for Wage Act Violations,” January 3, 2018] was more imagination than reality. Or is it perhaps a situation where the employer’s aggressive tactics in this one case precipitated the need by the Court to level the playing field?
Posted in Wages | Tagged , , , | Leave a comment

Decision in Spaulding v. Town of Natick School Committee is a Message to All School Committees

A Superior Court Judge recently issued a decision holding that portions of the Natick School Committee’s Public Participation at School Committee Meetings Policy (the “Policy”) are unconstitutional. The relevant provisions, which are common in similar school committee policies across the Commonwealth, prohibited “improper conduct and remarks” and “defamatory remarks.” Although the Policy allowed “objective criticisms of the school operations and programs,” it provided that the School Committee would not hear “personal complaints of school personnel nor against any member of the school community.”

The Judge, applying well-established First Amendment principles, determined that the public comment portion of a school committee’s meeting creates a “designated public forum,” meaning that the government body can only restrict statements based on their content when necessary to effectuate a compelling state interest. The School Committee argued that it had such “compelling interests” in trying to protect student and staff privacy, promoting a learning environment that fosters success, maintaining a positive workplace, prohibiting bullying and conducting its business in an orderly and efficient manner.

The Judge acknowledged and agreed with the School Committee’s interests and then analyzed those interests in light of the School Committee’s statutory authority to hire and fire the superintendent of schools, review and approve budgets, and establish educational goals and policies for the District. In light of the School Committee’s legal authority, the Judge distinguished between complaints about school operations and programs, which are within the School Committee’s jurisdiction, and personal complaints about staff (excluding the Superintendent) and students, which are not. Thus, the Judge concluded the provision of the Policy prohibiting complaints was lawful, except to the extent it prohibited complaints against individuals under the jurisdiction of the School Committee, i.e., the Superintendent of Schools. The Judge also held that the limitation in the Policy to “objective” criticisms was unconstitutional.

With respect to the prohibition on “defamatory” remarks, the Judge held that the Policy could only lawfully be applied to comments that have been found by a court to be defamatory. Other critical comments, however, may not be prohibited simply because they show an individual or the school district in a negative light. The Judge also held that the prohibition of “improper” and “abusive” remarks was not narrowly tailored to meet the School Committee’s compelling interest in conducting orderly meetings as the First Amendment only allowed for the prohibition of so-called “fighting words” or threats.

Although Spaulding v. Natick School Committee is only a Superior Court decision and, therefore, not binding on school committees state-wide, the decision appears well-reasoned and supported by other precedent-setting decisions. As such, we recommend that all school committees review their current public comment policies. For school committee policies based upon the MASC’s model policies, the relevant policy is BEDH. School committees would be wise to clarify their policies to provide that public comment will only be permitted with regard to matters under the school committee’s jurisdiction. In addition, any references, typically in paragraph 4, to “improper” and “abusive” comments should either be stricken or defined as prohibiting only vulgarities, threats or remarks likely to provoke a violent reaction. References to “defamatory” comments should either be deleted or limited to the unlikely comment related to a matter in which a court has already adjudicated a comment as defamatory. References, typically in paragraph 6, to “objective” criticisms should be deleted.

 The Judge’s full decision, including a description of the specific facts involved, can be found here

 Please contact any member of our Public Education Group if you have any questions or if you need assistance updating your policies regarding public participation at school committee meetings.

 

Posted in Public Education | Tagged , , , | Leave a comment

Department of Labor Releases Proposed Rule to Increase Minimum Salary Threshold for Overtime Exemption

On March 7, 2019, the Department of Labor released a long-awaited proposal to increase the minimum salary requirement for exempt employees from $23,660 to $35,308.  The DOL’s proposed rule comes nearly two months after it sent the rule to the Federal Office of Management and Budget for review – a story we previously reported about here.  

Assuming the proposed rule is adopted, to be exempt from overtime, an employee would need to be compensated on a salary basis at a rate of not less than $679 per week and perform the job duties required by the applicable “white-collar” exemption – namely, the executive, administrative, professional, outside sales, or computer professional exemption.   According to commentators, the increase in the minimum salary threshold would make 1.1 million additional workers eligible for overtime.

The proposed rule also contemplates a process to update the minimum salary threshold every four years.  The DOL has specifically requested input from the public on how this process should function.   

The proposed regulations will be formally published in the Federal Register next week.  After their publication, members of the public (e.g. employers, unions, business groups, workers’ rights groups, etc.) will have 60 days to comment on the proposed regulations.  Following the notice and comment period, the DOL may decide to amend its proposal based on the feedback it receives.  Alternatively, the DOL could keep its proposed rule intact.  

Readers will recall that in 2016, twenty-one states, the U.S. Chamber of Commerce, and several business groups filed a lawsuit to enjoin the Obama Administration from raising the minimum salary from $455 per week to $913 per week.  Many commentators believe this time around will be no different and readily expect both business and workers’ rights groups to mount legal challenges.

We will keep you updated on this developing story.   

March 7, 2019, the Department of Labor released a long-awaited proposal to increase the minimum salary requirement for exempt employees from $23,660 to $35,308.  The DOL’s proposed rule comes nearly two months after it sent the rule to the Federal Office of Management and Budget for review – a story we previously reported about here.  

Assuming the proposed rule is adopted, to be exempt from overtime, an employee would need to be compensated on a salary basis at a rate of not less than $679 per week and perform the job duties required by the applicable “white-collar” exemption – namely, the executive, administrative, professional, outside sales, or computer professional exemption.   According to commentators, the increase in the minimum salary threshold would make 1.1 million additional workers eligible for overtime.

The proposed rule also contemplates a process to update the minimum salary threshold every four years.  The DOL has specifically requested input from the public on how this process should function.   

The proposed regulations will be formally published in the Federal Register next week.  After their publication, members of the public (e.g. employers, unions, business groups, workers’ rights groups, etc.) will have 60 days to comment on the proposed regulations.  Following the notice and comment period, the DOL may decide to amend its proposal based on the feedback it receives.  Alternatively, the DOL could keep its proposed rule intact.  

Readers will recall that in 2016, twenty-one states, the U.S. Chamber of Commerce, and several business groups filed a lawsuit to enjoin the Obama Administration from raising the minimum salary from $455 per week to $913 per week.  Many commentators believe this time around will be no different and readily expect both business and workers’ rights groups to mount legal challenges.

We will keep you updated on this developing story.   

 

Posted in DOL, Overtime, Uncategorized | Tagged , , , , | Leave a comment

Coming to a Workplace Near You: New Fair Labor Standards Act Overtime Regulations Appear Imminent

The U.S. Department of Labor (“DOL”) recently sent proposed regulations to the Federal Office of Management and Budget (“OMB”) to amend the Fair Labor Standard Act’s White Collar Exemptions – i.e., the professional, executive and administrative exemptions – by increasing the minimum salary requirement for exempt employees.

Readers may recall that in 2016, the Obama Administration planned to raise the minimum salary requirement for the White Collar Exemptions from $455 per week to $913 per week but was blocked from doing so by Judge Amos L. Mazzant of the United States District Court for the Eastern District of Texas. For a refresher on that case, take a look at our colleague, Bob Kilroy’s, article on Judge Mazzant’s decision here.

It is expected that OMB will take a few months to review the proposed regulations before they are published in the Federal Register, at which point the public (i.e., affected employers) will have the opportunity to review and comment on the proposed regulations for the first time. Following the public comment period, the DOL may further amend the proposed regulations based on comments received, or it could decide to adopt the regulations as proposed, without any further amendments.

Although we cannot anticipate with certainty where the proposed rule will set the minimum salary, several commentators expect the salary level to be set in the low to mid $30,000s, which would equate to a weekly salary of between $575-$700. If this were to happen, employees presently classified as exempt under one of the White Collar Exemptions making less than the new salary level would need to be reclassified as non-exempt hourly employees or, in the alternative, have their pay increased to at least the new salary level to retain their exempt status.

We will continue to track the status of the proposed regulations and update you when they are released for public comment.

Posted in DOL, FLSA, Overtime | Leave a comment

WARN Act Violations ≠ Wage Act Violations

Early in 2018, the Massachusetts Wage Act, G.L. c. 149, §148, was in the news with two noteworthy decisions by the Massachusetts Supreme Judicial Court. Bookending 2018, the Supreme Judicial Court closed the year with yet another decision narrowing the definition of earned wages under the Wage Act, this time in connection with a premature mass layoff.

In the case of Calixto v. Coughlin et al, ISIS Parenting (“ISIS”), which offered pre- and post-natal classes and sold related products, abruptly closed, throwing more than 200 employees out of work. ISIS, however, had failed to give the proper 60-day notice under the federal Worker Adjustment and Retraining Notification (WARN) Act. The employees instituted a federal class action against ISIS and obtained a $2 million default judgment, representing the pay they would have received during the 60-day notice period if the company had not closed prematurely.

As the judgment against ISIS was uncollectable, the employees then filed a state court action against four corporate officers of ISIS alleging that the WARN Act damages were wages to which they were entitled under the Massachusetts Wage Act. They sought to hold those four individuals personally liable and requested that their damages be trebled, remedies available to them only under the Wage Act.

Once again, the Court wasn’t buying. The Wage Act, the Court held, is directed at “particularly egregious behavior, i.e., not paying wages for work actually performed.” It is not intended to provide the same protection and enhanced remedies for other employment violations where work would have been performed but for some intervening event, such as the abrupt closure without notice. Giving the phrase, “wages earned,” its plain and ordinary meaning, the Court affirmed the dismissal of the employees’ suit.

Since his election in 2014, Governor Charlie Baker has appointed five of the seven current Supreme Judicial Court justices. In my blog posts regarding two earlier Wage Act decisions by that Court, Segal v. Genitrix, LLC, and Mui v. Massachusetts Port Authority, [See “Violation of Sick Time Payout Policy Not a Wage Act Violation,” January 31, 2018; “A Bridge Too Far – Individual Liability for Wage Act Violations,” January 3, 2018], I posed the question as to whether we were seeing a determined effort to hold the line against an expansive interpretation of “earned wages” under the Wage Act and the enhanced remedies that result. While it may still be too early to call that race, the recent data points suggest that a narrower view is prevailing.

Posted in SJC, Wages | Tagged , , , | Leave a comment