Employment Law Bits

Employers beware – new wage act triples damages awarded to employees

On April 15, 2008, the Massachusetts Legislature passed a bill that makes Massachusetts the first state in the country to impose automatic treble damages against any business that violates wage and hour laws. Previously, under federal and state law, treble damages were only available in cases in which a court concluded that an employer willfully and intentionally committed wage and hour violation.

The new wage act provision strikes this relevant case law and provides that a violation of any wage and hour law will result in treble damages. What this means is that if an employer fails to pay $1,000.00 to an employee, that employee is automatically due $3,000.00 under the act.

It is advisable that you check immediately with your attorney to ensure that your wage and hour policies, rules and regulations comply with the Fair Labors Standards Act and Massachusetts Law.

By: Kevin V. Maltby, Esquire

Preventing lawsuits filed under the Federal Fair Labor Standards Act

Over the past several years, wage and hour lawsuits filed under the Federal Fair Labor Standards Act as well as the State Wage and Hour Law have dramatically increased. The trends from the court indicate that there is no relief in sight for the growing number of lawsuits filed under either these laws. Employers would be wise to consider the consequences and should consult with a legal professional to review pay, record keeping, time keeping and docking practices.

With respect to time keeping practices, it is important to ensure that meal breaks, waiting time or other sorts of time are properly accounted for. Employers should also take the time to train supervisors and managers on proper time keeping practices, including the repercussions for asking an employee to work through lunch. Improved time keeping practices will lead to better pay practices as well.

Employers should review pay practices to ensure that employees are properly exempt from overtime law under the Fair Labor Standards Act as well as state law. In addition, employers should also review their record keeping practices so that they maintain at least payroll records, total daily or weekly earnings or wages paid, total additions or deductions from wages, total wages paid each pay period, date of the payment and pay period covered in the employee’s work time schedules.

Finally, employers should review policies regarding docking to ensure that pay is being docked in accordance with Federal Law. And most importantly, employers should consult with an attorney regarding their pay practices in order to ensure compliance with the Fair Labor Standards Act and State Law.

By: Kevin V. Maltby, Esq.

Sexual harassment – insulating your company against liability

Generally, two forms of sexual harassment exist: “quid pro quo” sexual harassment and “hostile work environment sexual harassment.”

Quid pro quo sexual harassment occurs when an employer conditions employment opportunities on entering into a sexual or social relationship. Hostile work environment sexual harassment arises when an employer makes unwarranted and unwanted sexual advances to an employee that adversely effect the employee’s psychological well being.

An employer does not have to actually perform the sexual harassment to be liable. The employer may be vicariously liable for an employee’s conduct. Vicarious liability will almost always exist for a supervisor’s quid pro quo sexual harassment.

An employer may insulate itself from liability stemming from sexual harassment claims based on the existence of a hostile work environment by implementing an expressed policy prohibiting sexual harassment. This program must clearly establish that sexual harassment is prohibited and provide employees with an effective means of enforcing the policy. These requirements are satisfied by a policy that:

• Encourages the potential victims of sexual harassment to come forward
• Adequately investigates the allegations
• Takes effective remedial measures to address violations of the policy

Contact an employment law attorney to develop a meaningful safeguard today.

Investigating claims of improper conduct

Occasionally an employee will accuse a coworker or supervisor of improper conduct such as sexual harassment. These situations are difficult to deal with on several levels. To start, an employer must conduct a proper investigation of the allegations before deciding to terminate the accused employee. If the company fails to do this, it may be liable to the employee for damages.

While Massachusetts is an “at-will” state, some employees have employment contracts with their employers. If there is an employment contract, the company should carefully read it prior to conducting the investigation to ensure compliance with the terms of the contract. This will help avoid any breach of contract claims. Even if there is not an express contract, an employer may be bound to follow procedures set forth in an employee manual.

In addition to contract claims, a company may face potential liability for interference with a contractual or advantageous relationship. If a company fails to properly and objectively investigate allegations of misconduct, but goes ahead and terminates the accused employee, this may make the company liable to the discharged employee.

If you are an employee that has been fired due to allegations of misconduct, consult an attorney today to know your rights. If you are an employer investigating an employee’s allegations of harassment, you should consult an attorney to know your obligations and to develop a proper investigation technique.

Wage garnishments – regulated by law with strict compliance necessary

In some situations, an employer is required to garnish a portion of an employee’s wages for payment to a creditor. However, in doing so the employer must be careful to comply with statutory provisions dictating how the process must be carried out.

The employer is required to tell the employee of the garnishment and give the employee an opportunity to protest. Additionally, Title III of the Consumer Credit Protection Act (CCPA) protects employees from termination due to wage garnishment for any one debt. However, it is important to note that an employee is not protected from termination for any subsequent debts that require wage garnishment.

The CCPA also dictates how much of the employees wages that can be garnished. The lesser amount of 25 percent of disposable earnings or the amount by which the disposable earnings are greater than 30 times the federal minimum wage may be garnished by the employer. Disposable earnings are defined as the wages left after legally required deductions. Deductions that are not required by law (i.e. health and dental insurance) may not be deducted from gross earnings to calculate disposable income.

However, if the employee’s wages are being garnished in accordance with an existing court order for child support or alimony, the law is different. In this case, the CCPA allows 60 percent of the employee’s disposable earnings may be garnished. If the employee is supporting a current spouse or child, then the garnishment may be reduced to 50 percent.

It is important to ensure that the provisions of Title III of the CCPA are followed. Violations are punishable by reinstatement of a discharged employee, payment of back wages and restoration of improperly garnished amounts. Where violations are “willful” the employer can be criminally prosecuted and sentenced to pay a fine of $1,000 or be imprisoned for one year, or both.