Mass-Peculiarities: An Employers Guide to Wage & Hour Law in the Bay State 2022 Edition
70 | Massachusetts Wage & Hour Peculiarities, 2022 ed. © 2022 Seyfarth Shaw LLP The following section focuses on how to calculate the overtime rate for “non-exempt” employees (i.e., those employees covered by the overtime provisions of the FLSA or the Massachusetts Minimum Fair Wage Law). 404 Although the overtime requirements apply to a large number of employees, there are significant exceptions to the overtime pay requirements, which are discussed in Section VI. A. Calculation of the Regular Rate of Pay As explained above, overtime must be paid at a minimum of one and one-half times the employee’s “regular rate of pay.” 405 Accordingly, it is important for an employer to understand what constitutes an employee’s “regular rate” and to know how to calculate this rate properly. The “regular rate of pay” is the amount of compensation that an employee receives for a typical hour of the workweek. 406 For employees paid on an hourly basis, the regular rate of pay generally is their hourly rate. For employees who are paid on a basis other than an hourly rate (e.g., fixed salary or piece rate), the regular rate of pay is generally determined by dividing the employee’s total earnings for the week by the total number of hours worked during that week. 407 Both federal and Massachusetts overtime laws regulate the types of compensation that must be included in an employee’s regular rate for purposes of calculating overtime. Because the types of compensation included are not identical, in certain circumstances the overtime compensation owed an employee will differ under federal and Massachusetts law. Employers should pay the employee the higher of the federal or state overtime rate. 1. Compensation Included in the Calculation of the Regular Rate of Pay Under Federal Law To determine the amount of an employee’s pay for calculating overtime, federal law provides that the regular rate of pay shall include the following types of remuneration: • Compensation received by an employee, including hourly pay, piece rate pay, commissions, salary, and other compensation items, such as board, lodging, and use of facilities at torneys’ fees pursuant to the Massachuset t sWage Act . Lambirth v. Advanced Auto, Inc ., 140 F. Supp. 3d 108, 111-12 (D. Mass. 2015) (denying defendant ’s mot ion to dismiss Wage Act claim, not ing that Wage Act “applies to unt imely payment of all wages to which an employee is ent it led under either state or federal law”). 404 This sect ion addresses the calculat ion of the regular rate for purpose of paying overt ime for hours in excess of forty per workweek. One issue that arises in lit igat ion, however, is whether an employee worked any overt ime without pay andwhether the employer had actual or const ruct ive knowledge that the employee was working the overt ime. See , e.g. , Vitali v. Reit Mgmt. & Research, LLC , 88 Mass. App. Ct . 99, 111 (2015) (reversing summary judgment in favor of employer due to factual dispute about whether employer knew or should have known that plaint iff did not take her full lunch breaks even though plaint iff failed to comply with work report ing procedures, not ing that alleged work was done at plaint iff’s cubicle as opposed to off site and that employers bear the responsibility for ensuring t ime sheet s are accurate). 405 M.G.L. ch. 151, § 1A; 29 U.S.C. § 207. 406 454 C.M.R. § 27.03; 29 U.S.C. § 207(e). 407 454 C.M.R. § 27.03; 29 C.F.R. § 778.200-778.225.
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