Mass-Peculiarities: An Employers Guide to Wage & Hour Law in the Bay State 2022 Edition

© 2022 Seyfarth Shaw LLP Massachusetts Wage & Hour Peculiarities, 2022 ed. | 81 the goal is a true “salary” for the set number of hours, Method 1 does not serve that goal. Method 2 provides a true salary, but requires recalculation of the regular rate of pay on a weekly basis. Method 3 does not require recalculation and thus avoids the administrative burden associated with recalculation, but it results in additional expense due to the higher regular rate. Method 3 also carries some risk due to the fact that the DOL has not specifically opined on the issue. 11. Calculation of the Regular Rate for an Employee Working at Two or More Rates When an employee performs two or more types of work for an employer and receives different pay rates for each type of work, in Massachusetts (unlike many other states) the employee’s regular rate will be a weighted average of those pay rates. 436 Example: An employee works for a furniture store that pays its warehouse employees $20.00 per hour and its showroom employees $15.00 per hour. In one week, the employee works in the warehouse for 30 hours and in the showroom for 20 hours. The employee’s regular rate is determined by multiplying the 30 hours worked in the warehouse by the warehouse rate of $20.00 (30 x $20.00 per hour = $600.00) and the 20 hours worked in the showroom by the showroom rate of $15.00 (20 x $15.00 per hour = $300.00) and then dividing the sum of these numbers, $900.00 ($600.00 + $300.00), by the employee’s total hours for the week, in this case 50 hours. Thus, the employee’s regular rate for purposes of calculating overtime is $18.00 per hour ($900.00 ÷ 50 hours) and the employee is owed additional compensation at a rate of $9.00 (.5 x $18.00) for each hour over 40 hours. Here, the employee’s total compensation for the week would be $990.00 – $900.00 in regular pay, plus $90.00 in overtime ($9.00 x 10 hours). B. Sunday and Holiday Overtime Pay Requirements In 2019, Massachusetts began to phase out the requirement that retail businesses employing more than seven employees compensate non-exempt employees at a rate not less than one and one-half times their regular rate for all hours worked on Sunday and some holidays. 437 The premium pay requirement decreased to 1.4 times the regular rate in 2019, 1.3 times in 2020, 1.2 times in 2021 and 1.1 times in 2022, and will decrease to straight time in 2023. 438 Under Massachusetts law, 436 See DLS Opinion Let ter MW-2001-014 (Nov. 27, 2001). Under Massachuset t s law, the only approvedmethod for calculat ing regular rate for employees working at two or more rates is the weighted average approach described in the text . Id. See also DLS Opinion Let ter MW-2002-003 (Jan. 25, 2002). Federal law and several other states allowfor an alternat ive method, in which the rate in effect at the t ime that overtime is workedmay be used as the regular rate, provided that the employee and employer agree to that method prior to the t ime the work is performed. 29 C.F.R. § 778.415. Massachuset t s does not allow this method. 437 See St . 2018, ch. 121, §§ 5-16; M.G.L. ch. 136, § 6(50) (requiring premium pay on Sundays); M.G.L. ch. 136, § 13 (ext ending premium pay obligat ions to New Year’s Day, Columbus Day, and Veterans Day); M.G.L. ch. 136, § 16 (extending premium pay obligat ions to Memorial Day, Labor Day, Juneteenth Independence Day and Independence Day). See Sect ion I.B for a detailed discussion of the Massachuset t s laws governing Sunday and holiday premium pay requirement s. 438 See St . 2018, ch. 121, §§ 5-16.