Governor Baker Attempts to Take Away Earned Overtime

UPDATED November 7, 2019Due to an impressive level of pushback from Massachusetts workers, the provisions in the Baker budget that would have deprived commission-only workers of their earned overtime were removed during deliberations in the Massachusetts legislature. Two key takeaways from this: (1) your calls, emails and letters to your state legislators matter, keep them up, you can find your legislators here; (2) those calls and emails are really going to matter this winter and spring of 2019-2020 because the Massachusetts legislature created a commission to study whether or not the industry should going to get what it wants, a reduction in overtime rights for commission-only and other Massachusetts workers. That commission must file a report by the first day of March, 2020. Please make your views known to your Massachusetts state legislators, and we’re optimistic we can prevail. Updates will be posted here.

Original Article, posted September 20, 2019:

In September, Governor Baker introduced a supplemental budget bill meant to retroactively take away earned overtime from car salespeople and other commission-only workers who work overtime. And the Governor goes even further than that, seeking to strengthen employers’ hand in overtime disputes by creating new defenses to all overtime claims. If this bill is enacted into law, it will have sweeping and harmful consequences for the middle-class in Massachusetts.

Baker’s proposed changes to the law were tucked away in a supplementary budget normally meant to settle the state’s books before end of the year (like modifying the snow removal budget). Notably, the Governor did not mention employees or overtime in his press release for the supplemental budget. For Massachusetts employees, Governor Baker’s bill would do three critical things:

  • Retroactively eliminates Sunday pay and overtime protections for commissioned employees, slashing key protections that have been in place for decades;
  • Enable employers to manipulate the administrative process to create new defenses to the wage laws, which have traditionally been construed strictly so that workers get paid their earned wages; and
  • Extract lawfully earned wages out of Massachusetts citizens’ pockets by retroactively classifying them as exempt under the Wage Act, Overtime Laws and Blue Laws.

If the bill is passed with these provisions, millions of dollars in overtime and Sunday pay, owed to thousands of hard-working Massachusetts residents, will instead go back to the businesses making these proposals.

The May 2019 Supreme Judicial Court issued its decision in Sullivan v. Sleepy’s LLC, SJC-12542, ruling that the overtime law, prior caselaw, and administrative regulations have all required and continue to require that employers make separate and additional overtime and Sunday pay for non-exempt sales employees, even if they are paid on a commission-only basis. Department of Labor regulations made this requirement abundantly clear back in 2015, when the DLS promulgated the following regulatory language: “Whether a nonexempt employee is paid on an hourly, piece work, salary, or any other basis, such payments shall not serve to compensate the employee for any portion of the overtime rate for hours worked over 40 in a work week.” 454 Code. Mass. Regs. 27.03(3). The language presented in the budget bill represents a wholesale upending of the SJC’s decision confirming that the existing legal requirements require that employers pay commissioned employees overtime and Sunday pay.

The Governor’s allies have argued that the proposed changes to the law would merely bring Massachusetts law in line with Federal law. However, this sidesteps a key fact: Through the legislative process, workers in Massachusetts have won additional rights that do not exist in, say, Florida or Iowa, so matching Massachusetts law to federal law result if those rights and benefits being lost. And dramatically so here, where the thousands of workers have already earned wages that may be retroactively taken away with a stroke of a pen.

This story is ongoing as of October 3, 2019.

Case Report: Massachusetts Superior Court Certifies Car Sales Employee Class Action

On July 23, 2019, the Massachusetts Superior Court for Plymouth County certified a class of sales employees in Speakman v. Sullivan Bros. Nissan, Inc., et al., Case No. 16-00165, an unpaid wage class action. Our law firm was appointed as class counsel for the employees.

In our motion for class certification, we argued that the employees had suffered similarly due to two different violations of the Massachusetts Wage Act:

  • Employees worked more than 40 hours in a workweek and were not paid overtime wages for those overtime hours.
  • Employees received pay stubs that did not list their actual hours worked.

The defendants opposed the motion, but the judge agreed with the employees and certified an Overtime Class and a Pay Slips Class.

If you worked for Sullivan Brothers between February 2013 and the present, or if you are an employee at a different company facing similar issues, feel free to contact us.

Six Flags Overtime Decision

On June 20, 2019, the Massachusetts Superior Court for Suffolk County issued a major decision regarding the rights of amusement park workers to overtime pay.

We represent a class of approximately 10,000 seasonal Six Flags New England workers in a case for unpaid overtime. The Court issued a decision last week granting this class of workers summary judgment on their claims for 2015, 2017, and 2018. The Court decided in Six Flags favor for the years 2013, 2014, and 2016. Summary judgment is a procedure that the Court can use to decide a case that only hinges on a legal interpretation when the parties agree on the material facts.

In this case, Six Flags claimed an exemption under the Overtime Law for amusement parks that do not operate more than 150 days in a year. We argued that Six Flags routinely operates more than 150 days in a year and therefore did not meet its burden to prove an entitlement to the exemption.

Crucial to the Court’s decision were the days in 2017 and 2018 during which Six Flags operated “Holiday in the Park,” a Christmas-themed version of the park’s normal activities. While the park claimed that Holiday in the Park was an attraction separate from the park’s normal activities, we argued and the Court agreed that all Holiday in the Park days counted towards the operating day limit, pushing 2017 and 2018 past the amusement park exemption threshold.

Six Flags also argued that it should be permitted to count some operating days as “partial days” for the purposes of keeping the total at 150 or fewer days, but the Court disagreed stating, “the statutory exemption says nothing about counting hours, or treating shorter days as less than a calendar day.”. The Court therefore denied Six Flags the exemption for 2015, while upholding it for 2013-2014 and 2016.

This case began in early 2016, so we are pleased to have finally secured this victory on behalf of thousands of park employees who work hundreds of hours of overtime for the park without the benefit of overtime pay for their labor. You can read the full decision here:

Feel free to contact us if you work in excess of 40 hours a week and are not paid overtime. An overtime exemption could apply to your work, but not every employer exemption is valid.

Overtime for Commission-Only Employees

Overtime for commission employees
Commission-only employees have right to overtime pay

On May 8, 2019, the Massachusetts Supreme Judicial Court issued a major decision guaranteeing overtime to employees who are paid on a commission-only basis. The case is Sullivan v. Sleepy’s LLC. The SJC was considering whether salespeople who receive only commissions and a draw and no other salary are eligible for overtime and Sunday premium pay.

The case was brought by salespeople at Sleepy’s, a national chain of mattress stores, who were paid a daily draw of $125 and any sales commissions above that amount. They did not receive any extra pay for working overtime or on Sundays, and they argued that they were eligible for both.

Sleepy’s did not dispute that the overtime statute applied to its salespeople. Instead, it maintained that if you took the salespeople’s take-home pay (again, made up only of the draw and commissions) and divided it by the number of hours they worked, their effective hourly rate was at least the minimum wage for straight time and at least 1.5 times the minimum wage for overtime hours worked. The employees were, in effect, already receiving premium pay as part of their regular pay, according to Sleepy’s argument. The company relied on two opinion letters by the Massachusetts Department of Labor Standards from 2003 and 2009.

This reliance was misplaced, because as the SJC reminded us, the wage and hour laws do not allow employers to “retroactively reallocate and credit payments made to fulfill one set of wage obligations against separate and independent obligations.” In other words, an employer cannot use one wage obligation (to pay commissions) to cover another one (to pay overtime).  

If employers could credit commission and draw payments against their overtime obligations, it would undermine the chief purposes of the overtime law: to discourage long work hours (so that employees can have more personal and family time), to encourage employers to hire more workers (to avoid paying the overtime premium), and to reward employees who do work overtime hours with extra pay. The interpretation of the law advocated by Sleepy’s – whereby it did not have to pay extra money when employees worked overtime – undercut each of these purposes, so the SJC rejected it. 

The SJC’s decision in Sleepy’s will be very important for overtime cases. We have several cases on behalf of employees who are paid on a 100 percent commission basis, must work far more than 40 hours a week, but receive no additional compensation beyond commissions and draws. Those cases will be strengthened by this decision. Feel free to contact us if you work more than 40 hours in some workweeks but only get paid commission, no overtime — or if you work in retail, and work on Sundays, but get paid nothing beyond your commissions.

Case Report: $2 Million Wage Act Class Action Settlement

On January 14, 2019, settlement checks went out to the more than a thousand class members in a class action we brought against a Massachusetts home healthcare company. We were appointed as counsel for a settlement class of home health aides, who we alleged were required to travel between client sites during the workday for no pay, and whose transportation expenses weren’t reimbursed.

The Court’s final order approved a gross settlement fund in the amount of $2 million for the home health aides.

It was a satisfying conclusion to a hard-fought case that began back in February 2017, and we were happy to secure a good result on behalf of these Massachusetts workers.

Feel free to contact us if you have information regarding the failure of a Massachusetts home health care agency to pay for intraday travel time or to reimburse employees for travel-related expenses. Note: this applies to travel during the work day and not to travel between home and work at the beginning or end of the day.related expenses.

Supreme Judicial Court Issues Ruling on Agricultural Overtime Pay

Today the Massachusetts Supreme Judicial Court issued an important decision in favor of agricultural workers. The case is Arias-Villano et al. v. Chang & Sons Enterprises, Inc. which was brought on behalf of workers of a company farming and distributing bean sprouts. The key question in the case was whether the workers were entitled to overtime pay for their overtime hours worked.

While the Superior Court had decided in favor of the defendants, determining that the workers fell under the agricultural exemption and therefore could not receive overtime, the SJC, which was reviewing the case on appeal, overruled this decision.

This agricultural exemption applied to employees “engaged in agriculture and farming on a farm,” and so the key issue here, as SJC’s slip opinion underlined, was “the meaning of the phrase ‘agriculture and farming’”. To answer this question, the SJC turned to the legal definition of these terms, as established by M.G.L. c. 151, § 2: “labor on a farm and the growing and harvesting of agricultural, floricultural and horticultural commodities.”

This definition, the SJC pointed out, “does not include postharvesting activities.” This was essential to the case, because the plaintiffs “were not involved in the growing operations” of the beansprouts, “but instead cleaned, inspected, sorted, weighed, and packaged” them, as well as cleaning the facility and discarding waste. This work, the SJC wrote, “does not fall within the scope of the statute.” And, it pointed out, the history of the minimum wage and overtime statutes indicates that the agricultural exemption was meant to be applied narrowly, as here.

The SJC remanded the case to the Superior Court, granting the plaintiffs’ motion for summary judgment and overruling the grant of the defendants’ motion.

This is a big win for agricultural workers when it comes to wage law in Massachusetts. We are likely to see many more cases brought on behalf of workers like these who were involved in “postharvesting activities” rather than in the literal farming of a crop. The case means that these workers, who worked as many as seventy hours a week, and others like them logging hundreds of hours a month in the agricultural industry, can receive the overtime pay they have earned.

If you are an agricultural worker engaged in “postharvesting activities” who is not being paid overtime rates for your overtime hours worked, feel free to reach out to us.