Massachusetts is one of the most employee-friendly states in the nation when it comes to wage-and-hour laws. While the federal minimum wage is only $7.25 per hour, Massachusetts currently requires most employers to pay a $15.00 hourly minimum wage—regardless of size—and has a number of unique legal requirements of which employers need to be aware. Below are some common mistakes that Massachusetts employers make, which can have costly consequences. Not only must an employer pay a prevailing employee treble damages, costs, and attorneys’ fees in most Massachusetts wage-and-hour cases, but uniform or wide-spread violations of wage-and-hour laws expose employers to potential class/collective actions.
Not Providing Employees A Minimum Amount of Paid Sick Leave
Massachusetts wage-and-hour statutes have stringent requirements for paid sick time. Employers with 11 or more employees must offer a minimum number of paid sick days per year[1]—at least one hour of sick time for every 30 hours worked. Accrual starts on employees’ first day of work, and employees must be allowed to use accrued earned sick time on the 90th calendar day following their start date. In addition, employers with 11 or more employees must allow employees to use at least 40 hours of earned paid sick time within a calendar year. A violation carries heavy consequences: an employer’s failure to pay an employee even a few hours less than the required earned sick time may result in treble damages, costs, and attorneys’ fees.
Failing To Compensate Departing Employees For Unused Vacation Time
While Massachusetts does not require payment of vacation time, many Massachusetts employers choose to offer paid vacation days. This voluntary “benefit” has implications because paid time off for vacation or personal time is considered “wages” under the Massachusetts Wage Act (“the Wage Act”), Mass. Gen. Laws ch. 149, §§ 148, et. seq. Therefore, employers must pay employees for accrued but unused vacation time upon separation. Failure to pay an employee for unused vacation time upon separation (the timing of which depends upon whether the employee left voluntarily or involuntarily) also makes the employer liable for treble damages, costs, and attorneys’ fees. In addition, the employer is subject to potential penalties for failing to pay an employee in full upon termination (see more below).
In contrast to paid vacation time, accrued but unused sick time described above is not required to be paid out at the time of separation.
Failing To Pay Involuntarily-Terminated Employees In Full On Date Of Termination
Another common mistake that Massachusetts employers make is failing to pay involuntarily-terminated employees in full on their termination date. While an employee who leaves employment voluntarily (such as resignation) must be paid in full on either their following regular payday or (in the absence of a regular payday) or the following Saturday, an employee who is discharged must be paid, in full, all of their outstanding wages covered by the Wage Act on the date of discharge.[2] This includes, but is not limited to, regular wages, any unused vacation time, and commissions that are definitely determined and due and payable to the employee. Failing to adhere to this requirement imposes especially burdensome costs upon employers, including automatic liability for treble damages, costs, and attorneys’ fees, regardless of whether such payment is one day late or 100 days late. In addition, employers who willfully violate these requirements may be subject to a fine of up to $25,000.00 or imprisonment of up to one year for only the first offense.
Employers With Tipped Employees: Not Using Tips From One Shift To Cover A Shortfall In Tips From Another Shift
Massachusetts also has strict provisions regarding payments to tipped employees. In most situations, tips must be paid to employees by the end of the business day in which they are earned.[3]
As of January 1, 2023, provided proper notice is given, employers may take a tip credit towards their minimum wage obligations to tipped employees (waitstaff employees, service employees, and service bartenders who receive more than $20.00 per month in tips). This permits such employers to pay a cash wage to their tipped employees of $6.75 per hour. However, if the employee’s cash wage and tips actually received do not equal or exceed the applicable minimum wage, the employer must make up the difference. Further, although employees may create and administer tip pools, no workers other than waitstaff employees, service employees, or service bartenders may receive any portion of the tips from the pool.
However, under no circumstances may a Massachusetts employer use an employee’s windfall in tips from one shift to cover a shortfall in tips from another shift. For example, if a server works five hours on a slow Wednesday afternoon and only receives $30.00 in tips, but then works five hours on a busy Saturday evening and receives a total of $300.00 in tips, the employer must compensate for the extra $2.25 per hour as needed to reach the current $15.00 hourly minimum wage for Wednesday’s shift, regardless of the fact that the employee received far more than the $15.00 hourly minimum wage for Saturday’s shift.[4] In short, whether the employee has earned sufficient tips is determined on a daily basis as opposed to a weekly basis as permitted under the federal Fair Labor Standards Act (FLSA).
Violations of Massachusetts’ tipping provisions also carry heavy consequences—any employer who wrongfully withholds tips or fails to compensate tipped employees is required to make restitution for any tips wrongfully accepted, distributed, or retained, and pay interest thereon at the rate of 12% per year. Employers who violate Massachusetts tipping requirements may also face additional civil or criminal penalties, or may be required to pay employees additional damages, depending upon the circumstances.
Failing To Include Required Pay Disclosures In Job Postings
Beginning on October 29, 2025, any Massachusetts employer with more than 25 employees must provide either a wage or salary range for a particular position in job postings seeking prospective employees, and, upon request, provide prospective wages to current employees who have been offered a promotion or transfer to a new position.[5]
Failure to properly post or provide these wages and/or salary ranges or rates also results in costs to the employer in the form of warnings and fines, including fines of up to $25,000.00 in certain instances for a fourth or subsequent offense.
Take-Away Lessons
Employers’ audits of their pay practices and keeping apprised of the commonwealth’s wage-and-hour laws, quite literally, pays in the form of decreased exposure. We recommend that employers take this opportunity to review their written payroll policies and procedures, as well as any unwritten ongoing practices, to ensure they are in compliance and avoid the risk of a collective action for violations carried out throughout the workforce. Additionally, employers should be developing a plan now for the new job posting requirements coming in October.
[1] While Massachusetts employers with fewer than 11 employees still must provide employees with a minimum number of sick days per year, these sick days may be paid or unpaid.
[2] Additionally, the City of Boston carries special requirements surrounding payment to discharged employees that are not the subject to this article.
[3] Furthermore, in the cases where patrons have paid via credit card, tipped employees must receive the total amount of tips given by patrons, regardless of any credit card fees that may have been charged by the credit card company.
[4] To illustrate, the member of the waitstaff earned $30.00 divided by five hours, or $6.00 per hour, in tips for Wednesday’s shift. Assuming that his or her employer pays him or her the minimum $6.75 cash wage required under Massachusetts law, the employee has still only earned $12.75 per hour. Therefore, in order for the employee to reach the $15.00 minimum wage for Wednesday’s shift, his or her employer must pay him or her an additional $2.25 per hour for Wednesday’s shift within his or her next regular paycheck.
[5] In addition, effective February 1, 2025, any employer with 100 or more Massachusetts-based employees is required to submit a wage data report to the Secretary of the Commonwealth by February 1st every year.