The Massachusetts and federal governments have increased efforts
to ensure employees are paid fair wages. These efforts include (1)
the introduction of new wage-related laws and regulations; and (2)
the increased enforcement of all wage laws. Attorneys advising
employers and employees should stay abreast of the changes to
Massachusetts and federal wage laws, and should advise their
clients about the impact of increased enforcement efforts in Beacon
Hill and Washington, D.C.
The enactment of new laws ensures fair
wages
The Massachusetts Legislature has demonstrated an increased
focus on the payment of fair wages by enacting laws which increase
the wages Massachusetts employees earn.
The Legislature increased the total wages many Massachusetts
workers earn by increasing the minimum wage from $9.00 to $10.00
for the period January 1, 2016 to December 31, 2016, and from
$10.00 to $11.00 beginning January 1, 2017 . (M.G.L. c. 151, §1,
2). The Massachusetts Legislature also enacted the new Earned
Sick Time Law, ensuring that employers with eleven (11) or more
employees pay their employees one hour of sick time for every
thirty hours worked, up to a total forty hours. (M.G.L. c. 149, §
148C).
Massachusetts' efforts to ensure its employees are paid a fair
wage are similar to efforts nationwide. The Department of Labor has
made efforts to ensure non-exempt workers are fairly paid overtime
by enacting new overtime regulations. These new regulations, which
went into effect in December 2016 more than doubled the base salary
for overtime exemption, from $455 per week to $913 per week (or
approximately $47,000). As a result, most employees who earn less
than $913 per week are now classified as non-exempt workers, and
must be paid time and a half for work performed in excess of forty
(40) hours per week. The Department of Labor expects that these
changes will effect approximately 4.2 million workers nationwide,
with 84,000 of those workers in Massachusetts alone.
The increased enforcement of new and existing laws
ensures proper payment of wages
In addition to new wage laws, there is a heightened interest by
local, Massachusetts and federal governments in policing wage theft
through the increased enforcement of all wage laws.
Locally, officials have taken creative steps to leverage laws
already in existence, in an effort to maximize compliance with all
wage-related laws in their jurisdictions. On October 23, 2014,
Boston Mayor Martin J. Walsh signed an Executive Order requiring
city vendors to certify compliance with state and federal wage laws
before being awarded city contracts. According to the Mayor's
office, the certification of compliance, made under oath, is
intended to "strengthen the City's ability to hire vendors that
treat their employees fairly." On September 17, 2015 Mayor Walsh
issued another innovative directive aimed at preventing wage theft-
a requirement that any business seeking to renew a food or liquor
license before the Boston Licensing Board must certify, under oath,
its compliance with state and federal wage laws. The directive also
expands the Mayor's Office of Workforce Development to include a
"Theft & Living Wage Division" to educate workers about their
rights and to actively investigate employers suspected of violating
wage-related laws. Violating employers are referred to the Boston
Licensing Board for potential disciplinary action, including loss
of license.
Similar commitment to fighting wage theft exists at the state
level. On July 21, 2016, Attorney General Maura Healy announced
that her office reached an agreement with national restaurant
company "Bloomin' Brands, Inc." to pay $210,000 in restitution and
penalties for failure to pay wages for required training: a
violation of state law. This settlement is part of a larger trend
demonstrating Healy's ongoing efforts to combat wage theft. In the
first quarter of 2016, Healey issued 29 civil citations against
construction companies totaling nearly $260,000 in restitution to
employees and $68,000 in fines levied against the companies.
According to the Attorney General's Office, this is an increase
from the previous two quarters. Healey has publicly declared that
her Office will continue its increased enforcement of wage laws
noting that, "[w]age theft is a real issue in Massachusetts,
including in the construction industry where dishonest companies
continue to cheat their employees. Our office is working to level
the playing field so that workers are paid fairly and contractors
who follow the rules are not at a disadvantage."
Massachusetts' increased focus on wages is unlikely to subside,
as numerous wage-related bills are currently pending in the
Legislature. For example, the Massachusetts Senate passed An Act to
Prevent Wage Theft and Promote Employer Accountability (S.B. 2434).
If enacted, S.B. 2434 would afford the Massachusetts Attorney
General the right to issue stop work orders to businesses violating
certain Massachusetts wage laws, including the aforementioned
minimum wage and Earned Sick Time Laws. The anticipated stop work
orders, coupled with the already significant penalties for wage
theft (including treble damages and reasonable attorneys' fees
awards, M.G.L. c. 149, § 150), will likely substantially decrease
wage law violations. S.B. 41 represents the Massachusetts
Legislature's recognition that laws increasing wages are toothless
without corresponding laws increasing enforcement.
Enforcement efforts are also increasing at the Federal level.
The Department of Labor has collected an average of nearly $250
million per year in back pay for workers during fiscal years 2011
to 2015. This represents a nearly 35% increase from the annual
average of $184 million collected in back pay for workers from
fiscal years 2006 to 2010. U.S. Secretary of Labor Thomas Perez has
credited the Department's enlarged roster of wage theft
investigators for the success in this area, and has credited local
and state government entities for serving as much needed
"redundancies in law enforcement."
Conclusion
This increased focus on wages, both in Massachusetts and
federally, is unlikely to subside. Accordingly, employment lawyers
must focus on educating themselves and their clients about
new wage laws and increased efforts to enforce all wage
laws. With proper education and guidance from their attorneys,
employers can assist the federal and state governments to ensure
that all workers are paid a fair wage.