Of Note (Legally Speaking)

What is the Massachusetts Paid Family Medical Leave Law (“PFML”):

In short, this new law will entitle many Massachusetts employees and independent contractors to:

• up to 20 weeks paid medical leave for their own health conditions
• up to 12 weeks paid family leave for birth, adoption or foster care of a child
• up to 12 weeks paid family leave to care for a family member with a serious health condition

When does it take effect?

The ability to take these paid leaves will begin January 1, 2021.

What happens before then?

September 30, 2019

• Employers must post workplace notices in English and in any other language spoken by more than five employees.

• Employers must provide separate written notices to all employees.

• If a company’s workforce includes more than 50% of the workforce,                                   the company must provide written notices to all contractors.

• Click Here for a link to model Posters and Notices, in English and                                       other languages.

October 1, 2019

• Payroll contributions to the Commonwealth Fund which will pay for these leaves begin.  The employer’s obligation to reimburse employees for their contributions depends on whether the company’s workforce has more or less than 25 “covered individuals” as defined Here.

Resources and Guidance?

• Massachusetts recognizes that this is a seismic change for all Massachusetts employers (there are very few exceptions).  Accordingly, it has endeavored to provide as much information as possible in this Employer’s Guide.  And, as always, I’m here to help if you need more guidance.

After almost ten years of back-and-forth in the legislature, a new non-compete law (M.G.L. c. 149, §24L) will take effect in Massachusetts on October 1, 2018. Although the new law does not wholly do away with non-compete agreements, it does impose numerous restrictions and requirements, and applies to both employees and independent contractors. Key provisions of this new law include the following:

• New employees who are asked to sign a non-compete in connection with the commencement of employment must be provided with that non-compete either before a formal offer of employment is made or 10 business days prior to the employee’s start date.

• Employees asked to sign non-competes at any point during the course of employment must be provided “garden leave pay” or some other mutually agreed upon fair and reasonable compensation, which cannot simply be the continuation of employment. Garden leave pay refers to payment of at least 50% of the employee’s base salary during the non-compete period.

• Non-competes will not be enforceable (i.e., are banned) with respect to (i) nonexempt employees, (ii) employees aged 18 years and under; (iii) employees who are terminated without cause or laid off (but, otherwise compliant non-competes can be entered as part of a separation agreement), and (iv) undergraduate or graduate students with internships or similar short-term employment.

• Enforceable non-competes must be no broader than necessary to protect an employer’s legitimate business interests. The law specifically provides presumptions as to what is reasonable in terms of the scope of proscribed activities, duration and geographic reach.

• All non-competes must be in writing, signed by both parties, and specify the employee’s right to consult with counsel prior to signing.

Takeaway:

This new law applies to non-compete agreements entered into on or after October 1, 2018, so any business that has written employment or independent contractor agreements containing a non-compete provision should be sure to review and revise those provisions prior to then in order to ensure compliance with the new law.

As noted in a prior post, Massachusetts has one of the narrowest definitions of an “independent contractor” in the country. It should come as no surprise, therefore, that Massachusetts is equally strict when it comes to whether interns must be paid.

The US Department of Labor has six criteria that must be met in order to classify someone as an unpaid intern. Briefly: (1) the internship must be similar to educational training; (2) the internship must benefit the intern; (3) the intern cannot take the place of regular employees and must be closely supervised; (4) the employer cannot derive any immediate advantage from the intern’s activities; (5) the intern is not entitled to a job at the end of the internship; and (6) the intern understands that s/he is not entitled to be paid.

Massachusetts imposes a seventh requirement: the intern must be performing services as part of “training programs in charitable, educational or religious institutions.”

Accordingly, unless your Massachusetts business is a charitable, educational or religious organization, your interns must be paid, regardless of whether they fit the federal criteria.

On August 1, 2016, Massachusetts enacted the Pay Equity Act (M.G.L. c. 149, §105A), which is intended to make it unlawful to pay men and women different amounts for “comparable work.” While one might have thought that the Massachusetts Equal Pay Act already provided such protections, that law had been interpreted such that it was limited in its application to men and women with the same job titles. The newly enacted Pay Equity Act evaluates whether two positions are comparable by examining factors such as skill, effort, responsibility and working conditions. The Act provides an affirmative defense for employers who complete a good faith self-evaluation of their pay practices and make reasonable progress towards eliminating gender pay gaps.

In addition, the Pay Equity Act prohibits employers from asking job applicants about their salary history before a job offer is made. Employers should ensure their application forms are updated.

Also, it is now unlawful for employers to prohibit employees from sharing wage information with coworkers.

The Pay Equity Act goes into effect January 1, 2018 so employers have plenty of time to evaluate their hiring and wage practices, and to adapt them if necessary.

A Company hires an employee and has a well-drafted, enforceable written agreement containing confidentiality provisions, non-solicitation clauses, and non-compete obligations (so-called “Restrictive Covenants”). The employee stays with the Company for years, receives various promotions and then decides to leave and go to a competitor. The Company is disappointed but comforted by the written employment contract containing those Restrictive Covenants. Or so it thought. It turns out that the Company overlooked the law in Massachusetts that if an employee’s employment status “changes materially,” there is a substantial risk that those Restrictive Covenants are no longer enforceable. Instead, Massachusetts law requires that new Restrictive Covenants must be signed when certain material changes occur such as a promotion to a new position, a significant pay raise, or assignment of additional job responsibilities. The takeaway: employers should review existing agreements on an annual basis to determine whether the employee’s status has changed sufficiently to warrant the re-signing of any agreement containing restrictive Covenants.

The new Massachusetts sick time law goes into effect on July 1, 2015 and requires ALL employers of any size to provide up to 40 hours/year of sick time to ALL Massachusetts employees of any status.

Fairly simple and straightforward.

But, as with all such laws, the details are numerous, and, until the Attorney General issues regulations addressing this new law, some of the details remain uncertain.

Here’s what is known so far:

• The law applies to all employers regardless of whether they have one employee or 100. The only difference related to the size of the company is that in companies with 11 or more employees, this statutory sick time is paid. Employees in companies with less than 11 employees are entitled to same amount of sick time but that time can be unpaid.

• The law applies to all Massachusetts employees, whether full-time, part-time or temporary. The law doesn’t address independent contractors but it seems likely that legitimate independent contractors will be excluded from this benefit.

• The 40 hours do not accrue all at once, but rather at a rate of one hour of sick time for every 30 hours worked. Accrual starts as of 7/1 or the date of hire, whichever is later, but the sick time cannot be used until 90 days after the start of employment.

• Sick time under this law cannot be subject to a year-end “use or lose it” policy but instead can be carried over from year to year. Nonetheless, an employee cannot use more than 40 hours of this statutory sick time in a single calendar year.

Stay-tuned as the Attorney General, affected employers and eligible employees begin implementation and enforcement of this groundbreaking new law.