Retail Sunday Pay and Massachusetts Wage Act

Massachusetts retailers must pay employees who work on Sunday “one and one-half times the employee’s regular rate.” M.G.L. c. 136, § 6(50).  However, traditionally, this law could only be enforced by the Attorney General: Individual employees and groups of employees could not sue under the Wage Act for violations of the retail premium pay laws (sometimes referred to as a “blue law”) and receive treble damages and attorneys’ fees.  Recently, however, the Business Litigation Session of the Suffolk Superior Court issued an interesting opinion that held that the contrary was true.

In Bassett et al. v. Triton Technologies, Inc. et al., C.A. No. 1684CV03475-BLS2, Judge Salinger held that “the Wage Act requires prompt payment of all wages earned by an employee, including higher wages earned under G.L. c. 136, § 6(50), for work on Sundays.”  Judge Salinger further noted that the Wage Act “applies to all wages earned, whether the obligation to pay the wage is solely a function of a private contractual arrangement or arises in whole or in part under a statute.” This reasoning is consistent with two other cases in recent years. Lambirth v. Advanced Auto, Inc., 140 F.Supp.3d 108, 110 (D.Mass.2015) (denying motion to dismiss a Massachusetts Wage Act claim enforcing overtime owed under federal law); Carroca v. All Start Enterprises and Collision Center, Inc., C.A. No. 12–11202–DJ, 2013 WL 3496537 at *3 (D. Mass July 10, 2013) (granting summary judgment for plaintiff on claims under the Massachusetts Wage Act where plaintiff demonstrated entitlement to overtime wages under federal law).

Only employees who work in a store, a shop or a liquor store that employs seven people or more, counting the owners, are entitled to Sunday premium pay.

Judge Salinger’s decision will help experienced wage and hour attorneys bring Wage Act cases for non-payment of wages earned under the provisions of the Massachusetts retail blue laws.


Credit Cards as Basis for Individual FSLA Coverage

Not all employees and business are covered by the federal minimum wage and overtime law, the Fair Labor Standards Act. If a business is covered, all of its employees are covered. However, even if a business is not covered, some of its employees may be covered. For Massachusetts employees, this matters because there are some exemptions under Massachusetts overtime law, such as for workers in hospitals and restaurants, that don’t exist under federal law. So, in these circumstances, it’s key to determine if the employee or business is covered by federal law to know whether that employee is entitled to overtime.

“Enterprise” coverage means coverage for the business, and generally exists when there has annual gross revenues of more than $500,000.

“Individual” coverage determines whether or not an employee is covered, irrespective of whether the business is covered. Individual coverage exists when an employee is engaged in interstate commerce or in the production of goods for interstate commerce.

This Department of Labor fact sheet explains the distinction.

Many things are obviously interstate commerce, like the manufacture of goods to be sold throughout the United States, and many things are clearly not interstate commerce, such as painting a house. The question in this post is whether an employee who handles customer credit card transactions is engaged in interstate commerce, thereby invoking “individual” coverage.

First, the idea of “interstate commerce” has vast implications in constitutional and federal law generally. The federal courts have interpreted the phrase expansively to permit Congress to regulate local activities. However, in the context of employees’ entitlement to overtime and the minimum wage, federal courts have interpreted the phrase quite narrowly and in favor of business defendants. Generally, the test is:

  • whether an employee engages in interstate commerce by performing work involving or related to the movement of persons or things (whether tangibles or intangibles, and including information and intelligence) between one state and another.
  • The employee must engage in these interstate activities as a “substantial part” of their work.
  • It is not enough that the employee’s activities affect or indirectly relate to interstate commerce, but they must be in or so closely related to the movement of the commerce as to be a part of it.

An employee who regularly uses the instrumentalities of interstate commerce in his work, e.g., regular and recurrent use of interstate telephone, telegraph, mails, or travel, is engaged in interstate commerce. See Thorne v. All Restoration Servs., Inc., 448 F.3d 1264, 1266 (11th Cir. 2006).

So, what about credit cards? A waiter or retail employee who is processing credit cards throughout the day, every day, seems to be using an instrumentality of interstate commerce. The electronic signal transmitting the credit card transaction information travels through the phone lines or the internet, and the actual transaction is approved and processed in a different state (a plaintiff’s lawyer must gather admissible evidence showing all of this). Isn’t this enough like using the phone lines or mails to render an employee’s activities to be in interstate commerce?  Well, opinions differ.

First, the Dept. of Labor believes that an employee who regularly handles credit card transactions is engaged in interstate commerce:  “[e]mployees … are individually covered under the FLSA if, in the performance of their duties, they are engaged in interstate commerce …. Such employees include those who regularly handle interstate mail and telephone calls, engage in banking or credit card transactions, or receive or handle goods or materials from or destined for out-of-state sources.” Dept. of Labor Opinion Letter, FLSA, 1999 WL 1002373 (March 5, 1999).

However, federal courts routinely ignore the DOL’s guidance and provide it very little deference. In the 2006 case cited above, Thorne v. All Restoration Servs, the court didn’t give the DOL’s position any weight and largely sidestepped the legal issue by stating, “Even assuming, without deciding, that credit card transactions alone could constitute an instrumentality of interstate commerce, Thorne did not produce sufficient evidence of interstate activity […] Thorne did not produce evidence that he corresponded with merchants outside the state of Florida using the mail, phone, or fax, and nor did he produce evidence that he made purchases of goods from out-of-state vendors.” Id at 1267.

In short, the plaintiff in Thorne didn’t produce enough evidence about the regularity of the employee’s credit card processing and the interstate nature of those transactions. Yet, throughout Florida in the coming years, at least four district courts after Thorne have held that, as a matter of law, credit card transactions for the purchase of local goods could not form the basis for individual FLSA coverage. Marckenson v. LAL Peker, LLC, 2011 WL 5023422, *4 (S.D.Fla. Oct. 19, 2011);Kitchings v. Fla. United Methodist Children’s Home, Inc., 393 F.Supp.2d 1282, 1293 n. 26 (M.D.Fla.2005); Dent v. Giaimo, 606 F.Supp.2d 1357, 1361 (S.D.Fla.2009); Joseph v. Nichell’s Caribbean Cuisine, Inc., 862 F. Supp. 2d 1309, 1313 (S.D. Fla. 2012), as amended (July 17, 2012).

This conversation has been dominated by federal courts in the 11th Circuit (headquartered in Atlanta but governing Florida). However, a few voices have emerged from elsewhere, such as in Owusu v. Corona Tire Shop, Inc., No. 09-CV-3744 NGG JO, 2013 WL 1680861, at *4 (E.D.N.Y. Apr. 17, 2013), where the court credited the DOL’s opinion that credit card transactions could form the basis of individual FLSA coverage.  The federal courts in Massachusetts have not addressed this issue, and I cannot predict much about the outcome. However, I believe that, for a plaintiff wanting to put himself in the best possible position, a key is laying a strong foundation regarding the interstate nature of the credit card transaction itself, and arguing that the nature of these transactions makes the employee engaged in interstate commerce, despite any local nature of the goods sold.

Leyes de Propinas y Cargos de Entrega en Massachusetts

La mayoría de los salarios de los trabajadores en Massachusetts se basan en las propinas. Por esta razón, el estado de Massachusetts tiene leyes fuertes y estrictas para asegurar que todos los trabajadores reciban las propinas que ganan. En otras palabras, cada dólar que un cliente paga como propina, debe pagarse al empleado directamente y como una propina. Ninguna parte de la propina puede ir al empleador, al gerente o a algún otro empleado con un cargo administrativo o que no tenga derecho a una propina.

A pesar de estas leyes, algunas empresas cobran a los clientes cargos por costos de entrega y otras tarifas de servicio que, aparentemente parecieran ser propinas, pero, en realidad es la empresa quien retiene estos cobros. De esta manera la empresa puede mantener sus precios y aumentar las ganancias generando estos costos a los clientes que pagan tales cargos pensando que son realmente propinas para los empleados. Esto es ilegal en Massachusetts. Si una empresa cobra a sus clientes una tarifa que el cliente espera sea pagada al empleado como un tipo de propina, la empresa no puede retener total o parcialmente ese dinero.

En la industria de los restaurantes los costos ilegales mencionados anteriormente se presentan de la siguiente manera: Cuando el cliente termina su consumo en el restaurante recibe una factura con un 15 % de cargo adicional mencionado en la factura como “costo de servicio”. Por lo tanto, el cliente no agrega una propina pues supone que ese cargo del 15% adicional es la propina para los meseros por el servicio brindado, pero, lo que sucede realmente es que el restaurante obtiene ese cargo adicional y los empleados no reciben esas propinas. Así mismo sucede con los conductores repartidores de domicilios, ellos son engañados pues la empresa, aunque incluye en la factura para el cliente el “costo de entrega”, el restaurante no paga ese dinero al conductor. Este tipo de situaciones son ilegales y se extienden a otras industrias como Hoteles, empresas de catering y compañías de limusinas donde se incluyen varias tarifas de servicio que por ley deben ser pagadas en su totalidad a los empleados.

La ley de propinas, M.G.L. c. 149 § 152, prohíbe a los empleadores conservar total o parcialmente las propinas recibidas, cargos de costos por entregas a domicilio o de servicios. La ley define cargos por costos de servicio y demás cobros de manera amplia para incluir cualquier cobro adicional que el cliente pudiera pensar que va destinado al empleado, estos costos adicionales incluyen costos de servicios, costos de entrega, costos por transporte y tarifas de instalación, entre otros. La ley también define de manera amplia cada categoría de empleados que legalmente tiene derecho a recibir propinas o cobros adicionales que hace el empleador como por ejemplo empleados de servicios generales, camareros y meseros. Los tribunales de Massachusetts han interpretado la Ley de propinas para proporcionar la mayor protección posible a los empleados y para prevenir y evitar que los empleadores implementen políticas de propinas ilegales.

En un caso reciente de la empresa Tigges v. AM Pizza, Inc., una corte federal en Massachusetts añadió una protección adicional para los empleados en este contexto. El tribunal sostuvo que incluso cuando los empleados aptos para recibir propinas firmen acuerdos de arbitraje y renuncias por acción colectiva antes del inicio de su empleo, tienen el derecho de entablar demandas colectivas que cuestionen las prácticas de compensación de su empleador en los tribunales. En Tigges, los repartidores de pizza demandaron a su empleador por cobrar a los clientes un cargo de costo de entrega en todas las órdenes a domicilio y quedarse con este valor sin pagarlo a los conductores. La compañía cobró a todos los clientes un costo de envío que osciló entre $ 1.99 y $ 2.99. Los conductores además eran empleados con derecho a propinas que recibían un salario por hora inferior al salario mínimo. Los conductores de entregas presentaron el caso como una demanda colectiva buscando compensaciones por daños y perjuicios para todos los conductores que habían dejado de recibir sus propinas debido a la política del empleador de no pagar los cargos por costos de envío que les correspondía por ley y que la empresa había estado cobrando en las facturas a los clientes.

La empresa argumentó que el caso no podría prosperar en el tribunal porque los conductores habían firmado acuerdos de arbitraje que contenían una renuncia de acción colectiva. En otras palabras, los conductores habían firmado contratos cuando fueron contratados en los cuales se les exigía que resolvieran todas las disputas con la empresa a través de arbitraje, es decir, foros de resolución extrajudicial y sólo como individuos, no como acción colectiva.

El tribunal estuvo en desacuerdo con los argumentos de la empresa y declaró los contratos inaplicables. Sostuvo que un estatuto federal, la Ley Nacional de Relaciones Laborales (NLRA), da a los empleados el derecho de participar en una acción colectiva relacionada con sus condiciones de trabajo. Ese derecho incluye el derecho a presentar demandas colectivas contra los empleadores. Una renuncia de ésta acción colectiva, como la que los conductores de reparto debieron firmar como requisito para ser contratados, eliminaría el derecho de los empleados a la acción colectiva, lo que sería una violación de la NLRA. La corte explicó que la NLRA existe para asegurar que los empleados tengan el derecho de unirse para hacer cumplir a los empleadores con sus obligaciones legales. Si a los empleadores se les permitiera exigir que los empleados perdieran ese derecho como condición para obtener un empleo, todo el propósito de la NLRA sería nulo. Con ese fin, el tribunal sostuvo que las exenciones de acción colectiva no se cumplían y que los conductores de reparto podrían presentar sus reclamaciones como un grupo colectivo.

Este caso evidencia la fuerte protección judicial para los derechos de los empleados y la importancia de las demandas colectivas. La mayoría de las veces los empleados individuales dudan en demandar a sus empleadores por tratarse de cantidades relativamente pequeñas de dinero y el riesgo de represalias por parte del empleador (a pesar de las fuertes leyes de represalias que existen bajo las leyes federales y del estado de Massachusetts). Sin embargo, una demanda colectiva permite a los empleados acercarse a su empleador como grupo y hacer cumplir sus derechos salariales mientras minimizan sus temores de represalias.

Si desea obtener más información sobre la ley de propinas y los cargos por costos de servicio o entrega, no dude en comunicarse con nosotros para una consulta gratuita y confidencial. Numero, 617-338-9400.

MA Court Adopts Relieved-of-All-Duties Standard for Meal Breaks

The Business Litigation Session of the Massachusetts Superior Court for Suffolk County heard the defendants’ summary judgment motion in our case, Devito v. Longwood Security Services, Inc., a certified class action on behalf of a group of security officers who, during breaks, had to remain in job sectors, monitor their radios, remain in uniform, and respond to calls as needed. These officers, despite performing the majority of their normal job duties while on break, had their pay from these “break” times auto-deducted from their paychecks each shift.

The defendants argued that a federal test about what counts as work should apply to our claims under the Massachusetts Wage Act and Massachusetts Overtime Law. We argued that, instead, a relieved-of-all-duties test should apply, as this test is found in our state regulations and is consistent with Massachusetts wage laws.  Under the relieved-of-all-duties test, an employer cannot deduct time from an employee’s paycheck for a break unless that employee is relieved of all of their work duties during their break.

The federal courts have declined to follow a federal Department of Labor regulation (which also calls for use of a relieved-of-all-duties test) and instead have adopted a more employer-friendly test, known as the predominant benefit test. Instead of asking whether an employee had any duties while on break, the federal test asks, who gets the most benefit from a break period when you weigh the duties and liberties during that period. If the employee is seen to be the recipient of the majority of the benefit during a break period, the employer can deduct the break time from the employee’s paycheck. This test means that an employer can make an employee perform some duties on breaks, pay nothing, and get free work.

The federal courts have endorsed this test due to old Supreme Court precedent, the fact that the federal Department of Labor relieved-of-all-duties regulation doesn’t have the force of law, and perhaps due to some general skepticism about employee claims.  We argued, and Superior Court Judge Leibensperger agreed, that our state regulation, which applies the relieved-of-all-duties test, should apply to our claims because the regulation is unambiguous and has the force of law in Massachusetts. This decision will provide important guidance about what constitutes break time versus work time in Massachusetts.

The decision can be viewed here.  Our firm is co-counsel in this case with Elizabeth Ryan of Bailey & Glasser, LLP.

How to Collect Unpaid Wages in Massachusetts

The Massachusetts Wage Act is one of the strongest wage laws in the country, protecting employees who don’t recieve earned wages, salaries, commissions and other forms of compensation. What makes the law so strong?  First and foremost, once an employee files a case for unpaid wages in court in Massachusetts, they are entitled to three times those wages if they win. In addition, the law provides that the employer, and not the employee, must pay for the employee’s attorneys’ fees and court costs.  It can very expensive for employers who fail to pay earned wages

The steps in collecting unpaid wages are straightforward.

  1. Keep all the evidence related to your wages, including any and all pay slips, time slips, employment agreement, and any emails, letters or texts from your employer.  If your employer is not faithfully keeping track of all your hours, start keeping a handwritten journal of when you arrive at work each day, when you take breaks, when you return from those breaks, and when you leave for the day.  If you are getting paid “under the table,” keep clear and detailed records of the cash you are paid.
  2. The next step is to fill out a complaint form with the Massachusetts Attorney General.  Contact us at 617-338-9400 and we’ll help you do this for no charge.  Whether you file the complaint form on your own or with our help, the result will be the same: Because of the large number of wage complaints in Massachusetts, the Attorney General almost always declines to take any direct action, but instead authorizes you in writing to file a private lawsuit.
  3. That authorization comes in a “Private Right of Action” letter, which you will receive in the mail a week or two.  If we help you, we will also get a copy of the letter in the mail.  This letter authorizes you to sue your employer in court. This is very important because your entitlement to three times your wages and attorneys’ fees only arises once your case is actually filed in a court of law (the Attorney General complaint does not count for that).
  4. Contact us or another private attorney or law firm to take the next steps of preparing and filing a court complaint. Only when this is filed and service of the complaint is made does your employer find out about the case.
  5. Once the case is in court, the professionals mostly take over. We litigate the case, demanding discovery from your employer to build the evidence required to win. Many cases settle once your employer’s attorney is confronted with the evidence and the law, but in some cases it is necessary to testify at a deposition and at trial.
  6. Assuming you prove your case and win — or, as is more common, the case settles — you receive your wages, and often more (up to three times), and your attorneys get paid by your employer, and the matter is concluded.

This are the basic steps in claiming, reporting, and collecting unpaid wages in Massachusetts. We are wage and overtime specialists and when we take on a case, we do so on a contingent fee basis, so feel free to reach out to us for a free case review.


Pending Wage Class Action: Massachusetts Home Health Care Agency

Our firm has filed suit against Massachusetts home health care agency and its local franchisee on behalf of a putative class of home care aids (also sometimes called “home health aids”).

The class action complaint seeks back wages, including treble damages, for the Massachusetts home health care agency’s violations of Massachusetts wage and hour laws. Right at Home, and its franchisee, employ several hundred hourly home care aids in Massachusetts who provide in-home health care, companionship, cleaning and personal care to the sick, disabled, and elderly.

These home care aides must use their own vehicles to travel from home to home to provide these services. However, the defendants fail to pay their employees for this travel time, as required by law. The defendants also fail to reimburse their workers for all transportation expenses, as required by Massachusetts Regulations, 454 Code Mass. Regs. 27.04.

The litigation is currently in the discovery phase. Feel free to contact us if you have information regarding the failure of a Massachusetts home health care agency to pay for intra-day 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.