MA Wage Act is mightier than your commission plan



Last month, a Massachusetts US District Court judge held that a former employee who quit was still eligible for $32,000 in sales commissions despite a commission plan that provided otherwise.  (Israel v. Voya Institutional Plan Services, LLCI)  Voya’s commission plan specifically stated that an employee who resigns is not eligible for further commission payments.  The plan was clear and on point.  How did the judge get to yes on the commission?

Voya’s plan could not override the Wage Act requirement that sales commissions be paid promptly once the amount is “definitely determined”–at that point the commission becomes “due and payable.” The judge distinguished a sales commission, as a share of sales revenue generated by an employee, from other types of variable compensation– like a bonus.  Because the amount of commission was known and earned based on sales, it fell under the Wage Act’s strict payment requirements.

Massachusetts employers who provide commissions as part of their pay structure are advised to review their commission plans in light of this decision.  As we all know, the MA Wage Act, with its costly provisions for damages and attorney’s fees, is not to be taken lightly.

This is Your Brain on Conflict: Deconstructing Conflict in the Workplace

I spend my days providing virtual in-house employment counsel to companies all over the United States. My position allows me to observe work-place conflict across a wide range of industries and geographical locations. While most of the questions I field relate to compliance with employment laws, they also relate to something much more basic – fear of conflict.

Conflict Avoidance

Conflict is disagreement, but contrary to popular belief conflict does not always involve fighting. Conflict exists in any situation where facts, needs or fears pull people in divergent directions. When the disagreement is unpleasant, conflict elicits stress, which is a basic self-defense mechanism. According to Joshua Gowin, PhD, stress tells our brains one of two things: I’m hurt, or I’m about to be hurt. If we believe we’ve been hurt, we release adrenaline within seconds and cortisol within minutes, which causes us to become impulsive. Ever send that panicked email you instantly regretted? You can thank the one-two punch of adrenaline and cortisol for that. Moreover, even stress over an anticipated conflict activates our stress response, leading to that sick feeling that something bad is about to happen. We experience this anticipative stress in most long-term conflicts with peers; we worry about some harmful outcome that might happen—or not. The danger with stress caused by both immediate and anticipated conflict is that the worry itself can cause as much harm as the outcome – while you’re stressing over what might happen, your body is releasing adrenaline and cortisol as if you are actually in danger.

When stress lingers, cortisol levels remain chronically high. Chronically elevated cortisol levels are a telltale mark of depression, anxiety, and post-traumatic stress disorder (PTSD). It is also a hallmark of burnout. 

Cortisol, like many hormones, has an optimum range, and too much is a problem. When stress lingers, cortisol levels remain chronically high. Chronically elevated cortisol levels are a telltale mark of depression, anxiety, and post-traumatic stress disorder (PTSD). It is also a hallmark of burnout.

This physiological response explains why we avoid perceived conflict – it isn’t pleasant. However, while it’s human nature to avoid uncomfortable conflict with others, that tactic won’t work in the long term, particularly in the workplace.

Workplace conflict isn’t limited to the problem employee who can’t get along with anyone in the department. In my experience, conflict shows up all over the workplace, and even small conflicts are often a symptom of larger problems. Unfortunately, avoiding uncomfortable conflict can be costly. According to Joseph Grenny of VitalSmarts, every unaddressed conflict wastes about eight hours of company time in gossip and other unproductive activities. Additionally, conflict avoidance can lead managers and HR to ignore important workplace compliance issues. In short, conflict avoidance, is a compliance-killer.

I firmly believe in building a culture of compliance, where organizations understand that at their root, employment laws are about treating employees well. A good place to start in building a culture of compliance is to understand that even though people often shy away from it, conflict is actually normal and healthy. In fact, healthy conflict is arguably a vital ingredient to organizational success. Experts have found that the most effective teams are those in which members feel safe enough to disagree with one another. A culture where dissent is allowed, or even encouraged, can spur innovation, diversity of thought and better decision-making.

In other words, conflict can be a good thing, and avoidance and procrastination are the real problems.




It has been noted politicians campaign in poetry and govern in prose.  That may sound too lofty to describe current times, but the sentiment remains: promises made on the campaign trail do not easily translate into law. We have a Republican President and a Republican Congress, which historically has meant a more business-friendly regulatory environment.  Yet as the first 100 days will show, unwinding is neither quick nor easy. The Affordable Care Act has not been repealed and little is on the horizon. The President’s Budget Blueprint for 2018 proposes to slash the Department of Labor’s (DOL) budget by 21%. What does this mean for employers right now, or even over the next year?

In short, not a lot. Meanwhile, state and local governments are legislating like mad to fill the gaps that could be created by proposed budget cuts and executive orders. President Trump is an active Twitter user but as detailed below, that communication belies the actual activity of the federal government. #Realtalk

Are employers off the hook for federal mandates? Not so fast. Most of the federal regulations that govern the workplace remain in place and, given the inability to repeal the much lamented ACA, may not change at all.

Below is a quick overview of the current federal landscape under President Trump. Without actual policy as a guide, we are using the President’s proposed budget as a crystal ball. Please note that many states, including Massachusetts and California, have stricter mandates than the federal laws:


The President has proposed $2.5 Billion in cuts to the U.S. Department of Labor’s (“DOL”) operating budget. Because Congress has to approve the budget this is only an outline of the actual budget.  The blue print is short on details, but does expressly call for reduced funding for grant programs, job training programs for seniors and disadvantaged youth, and support for international labor efforts.  It also proposes to eliminate the U.S. Chemical Safety and Hazard Investigation Board (“CSB”) – an independent, federal, non-enforcement agency that investigates chemical accidents at certain facilities.  These cuts account for $500 million dollars of the DOL budget. The blueprint does not specify where the other $2 billion in cost savings will come from, except to say more funding responsibility will go to the states.  If approved by Congress—a big if–the cuts will involve a loss of funds that could be distributed heavily through DOL’s enforcement programs. This will include the EEOC and OSHA. Yet the process by which these agencies collect fines is a valuable revenue generator and unlikely to end easily.

At this point, the likelihood of the final budget looking like the proposed one is total conjecture. Furthermore, even with the expected cuts to the DOL’s enforcement and regulatory programs, it is important to recall that under the last Republican administration—no fan of regulation– the DOL still enforced the law. Moreover, as the federal government delivers more labor enforcement responsibility to the states, employers will increasingly be forced to work to achieve compliance on two fronts, instead of one.


Every administration has used the media as a means of furthering and communicating its chosen agenda, and the Trump administration is no exception.  The choices the administration makes in what it chooses to publicize likely signal the administration’s direction; but also shape the public’s perception of what it is actively doing.  The Trump administration and President Trump in particular use social media and news reports for the purpose of shaping the public’s understanding their activity.  From a compliance standpoint, this actually creates risk for employers.

Despite the President’s proposed budget and awaited confirmation of a new Labor secretary, the New York Times reported  that DOL enforcement actions continue.  In a departure from past practice, the department has stopped publicizing fines against companies. As the New York Times points out, the Obama administration used the announcements as an enforcement tool, and a means to influence employers.  However, the announcements also served as an important window for employers into the DOL’s current position on important compliance issues such as wage and hour or OSHA safety enforcement.  If a company in the same industry was recently fined for a practice, that action provided others in the industry with important notice to examine their practice.  Employers no longer have this benefit.  Furthermore, those who believe that the lack of information surrounding DOL enforcement means they no longer have to worry about the threat of an audit do so at their own peril.  At the present, and until the new budget is confirmed months from now, agency enforcement has not changed.  For those inclined to believe the confirmation of the new Labor secretary will change that should keep in mind that DOL audits are a money-maker for the agency.  There seems to be little reason for them to stop.


The last few years have seen a seismic change in the number of employment laws on both the state and federal level.  If it has been a few years since your organization has updated its employee handbook, you have a compliance problem on your hands.  Updating your handbook and policies is an important step to mitigate risk.

And remember, statutes, regulatory guidance and case opinions published by the courts are what impact compliance obligations, not the news. What happens on Twitter does not reflect the actions of the agencies of the federal government. #Really

Landmark decision: A federal appeals court rules Title VII bars sexual orientation bias in the workplace

“..[I]t is actually impossible to discriminate on the basis of sexual orientation without discriminating on the basis of sex…” wrote Chief Circuit Judge Diane P. Wood of the 7th Circuit Appeals Court,  wiping away prior ambiguity surrounding Title VII protections based on sexual orientation. The 8-3 decision, held in a rare en banc hearing, arose out of Indiana professor Kimberly Hively’s lawsuit against her former employer Ivy Tech Community College. Hively claimed her denial of promotions, tenure and her eventual termination were because she is a lesbian.

The 7th Circuit completely bypassed the issue of Congressional intent of the word “sex” in Title VII. Judge Posner opined that the court was not the “obedient servants of the 88th Congress (1963-1965)” and the court was “[T]aking advantage of what the last half century has taught.”

This case matters beyond Illinois, Indiana and Wisconsin. This decision reflects what many state and local government have already done to protect LGBT workers, and similar cases will be heard in other circuits.  Most importantly, it is a best practice to implement policies, procedures and training that prohibits discrimination based on sexual orientation in the workplace.

We can help. Contact us at or call 508.548.4888 to update your handbook and policies. Visit for more resources.



Yes, company email is fair game to communicate worker gripes while watching the Bachelor

The NLRB upheld its blockbuster 2014 ruling in Purple Communications Inc (Purple I), which allows employees to use employer email–even when not working –to conduct union organizing and protected activity. In a 3-2 ruling the NLRB held that workers who are granted access to their employer’s email system must be permitted to use it on nonworking time for protected activity under the National Labor Relations Act (NLRA).  As we all know, protected activity under the NLRA is fairly broad, often termed “concerted activity for workers’ mutual benefit.”  Purple Communications basically updates the water cooler talk about wages or griping about working conditions into the present via email use during and after work.

What’s an employer to do? Electronic communication restrictions and social media policies and still have a place in the workplace.  The policies must be carefully crafted however in light of the NLRB rulings.  We can help. Contact us to review your current policy for compliance and to draft a new one that works.


California Strikes Again

Another day, another blow to employers from the California Court of Appeals.  Earlier this month, the appeal court invalidated a commission-only plan that did not separately compensate non-exempt sales representatives for rest periods. What does this mean for your sales team?  Read on.  If you want to go straight to the source, the case is Vaquero et al. vs. Stoneledge Furniture LLC.

The 30 second summary: Stoneledge’s commission plan paid sales associates by commissions only.  It did not specifically compensate employees separately for breaks. The Company did allow employees to take a 10-minute rest period for every four hours worked as required by law, but the rest periods were not tracked or separately compensated.

Although Stoneledge won in the lower court, the appeals court reversed, relying on the plain language of California Wage Order 7: “authorized rest period time shall be counted as hours worked for which there shall be no deduction from wages.”  The court also relied on two prior appeals court decisions, concluding that Stoneledge’s commission-only system violated California law because it did not separately compensate employees for rest periods.

The takeaway: Employers with non-exempt sales employees who are paid by commissions-only must make sure their systems are tracking and paying rest periods separately from commissions.  As a reminder, sales employees who spend more than 50 percent of their time engaged in outside sales are exempt, and this decision will not impact the way in which they are paid.


Charlie Baker as the Taxman: The so-called fair share comes roaring back

If you drive a car, I’ll tax the street,
If you try to sit, I’ll tax your seat.
If you get too cold I’ll tax the heat,
If you take a walk, I’ll tax your feet

George Harrison, The Beatles


Massachusetts Governor Baker has included a new tax assessment on businesses in his 2018 proposed budget and it is a whopperThe proposed tax assessment would impact businesses with 10 or more employees if the employer does not contribute at least $4,950.00 toward each full time employee’s healthcare and have an 80% participation in its group health plan.  This health related tax assessment would require a payment of $2,000.00 per full time equivalent employee.  Full time employees are defined as those who work 35 hours or more per week.  The proposal revives the “fair share” that was eliminated under the Affordable Care Act (ACA)—with a hefty increase.  The goal is to raise $300 million to offset the costs of the projected 1.93 million enrolled in MassHealth for 2017. Baker is also proposing various caps paid to providers in an attempt to limit costs and close the gap on discordant charges for the same services.

The short version of how this happened: Way back in 2006, before the ACA, Massachusetts employers with 11 or more employees were required to offer health care coverage to full-time workers or pay a fee of $295 per worker. If an employer offered health insurance, employees were ineligible for MassHealth.  To comply with the ACA, the employer fee and the restriction in choosing MassHealth were eliminated.  Moreover, the ACA federal mandates to fine employers were pushed back and some eliminated. In Massachusetts that meant more people enrolling in MassHealth and less money to fund it. Can you say quagmire?

The attempt to shift this enormous burden onto the backs of business has understandable resistance.  The sky rocketing cost of insurance is the central issue and throwing more money at insurance costs makes no sense.  The interplay between the ACA and MassHealth has problems as well– Baker has requested a waiver from ACA provisions that conflict with or add unnecessary costs to the state. And finer points of Baker’s 2018 assessment must be addressed. For instance, what if employees reject employer offered coverage (perhaps in favor of coverage from a spouse) and participation drops below 80%? Under the current provision, the employer will still be required to pay the assessment.

The legislature needs to carefully examine this proposal and its massive potential impact on business.  Did I just write “carefully examine” in the same sentence as the legislature? Desperate times… .We urge you to contact your representatives in the Senate and House. Call if you can, email or write if you cannot. We will monitor the progress of this proposed tax assessment and continue to update our clients on any new developments.


New California Rules Surrounding Employee Rest Periods

The U.S. Senate took a major step toward repealing the Affordable Care Act last week, by voting to approve a budget blueprint that will allow them to essentially dismember the law without the threat of a Democratic filibuster.  Meanwhile, in California, the Supreme Court continued the state’s trend toward increasing employee rights and protections.  For employers, and those of us who spend our days advising them, this sums up what the next four years will likely look like.  The Federal government will roll back employee friendly laws, and revert to a more employer friendly stance, while states California, Massachusetts, New York, New Jersey, and Illinois will continue to ramp up employee protections.  It is a brave new world, and one where compliance just got a whole lot more challenging, particularly for employers operating in multiple states.

In California, where the rule for some time has been that employers may not generally require employees to remain on duty or on-call during meal breaks, the California Supreme Court recently issued a new decision, Augustus v. ABM Security Services, Inc., confirming that employers have the same obligations regarding rest breaks as they do regarding meal periods:  employees must be relieved of all duties and employers must relinquish all control.

In reaching its decision, the California Supreme Court held: “[O]ne cannot square the practice of compelling employees to remain at the ready, tethered by time and policy to particular locations or communications devices, with the requirement to relieve employees of all work duties and employer control during 10-minute rest periods.”  The Court expressed concern that employees would need to stay close to the employer’s premises during their rest breaks; and combined with the affirmative duty to be “on-call,” it was sufficient to establish employer control.

Although the Supreme Court holding does not preclude employers from reasonably rescheduling rest periods when needed, or requesting an exemption from the Division of Labor Standards Enforcement (DLSE), the Court was clear that placing an employee on call during a rest period is not permissible.

Next Steps

Although the Court’s decision is in line with language in applicable IWC Wage Orders, the Labor Code, and prior holdings, it is a good reminder to employers to evaluate their rest break practices to ensure compliance.  Employers should review their handbooks and policies to ensure they do not require employees to stay on premises or at a certain location, or to carry cell phones or pagers, or perform any duties whatsoever during breaks.  It is common for employers in states outside of California to require employees to remain at or near the premises during rest breaks.  It is important that provisions like these be amended for employees in California.

It’s The Holiday Season and Time for a History Lesson

The Commonwealth of Massachusetts is a state steeped in history, and the laws are no exception. Some might call the patchwork of rules known as the Blue Laws archaic. After all, the Blue Laws date back to the 17th century – to the founding of New England. The founders wanted to prevent unwholesome activity on Sundays, and over the years these laws were expanded to include certain holidays. You may be wondering how this impromptu history lesson applies to your workplace. This year, Christmas and New Year’s Day fall on Sundays but, are legally observed on the following Monday, which means that employers receive a double dose of Blue Law headache.

So what are these Blue Laws?

Over the last century, the Commonwealth has gradually narrowed these prohibitions against operating on Sundays and holidays by enacting numerous piecemeal exemptions to the Blue Laws, and there are now fifty-five exemptions, that allow certain businesses to operate legally on Sundays and holidays. However, these existing rules still impose significant burdens on businesses that may include: closure, premium pay, and voluntariness of work requirements on December 26 and January 2.

When certain holidays, including Christmas and New Year’s Day, fall on a Sunday, those holidays are legally observed on Monday. Below we will untangle what this will mean for our different clients. The answer will depend on the nature of your business..


Massachusetts law prevents most manufacturers from operating on Sundays without a permit issued by the local police department. There is a limited exception to this rule that allows manufacturers to operate on Sundays without a permit if there are “manufacturing processes which for technical reasons require continuous operations.” Manufacturers that fall within the exception or who obtain a permit are not required to provide premium pay, and employees can be required to work.

This same law will apply to manufacturers on Christmas (December 25) and New Year’s Day (January 1), both of which fall on Sundays.

Although December 26 and January 2 are considered legal holidays, manufacturers will be able to operate lawfully. However, non-exempt employees cannot be required to work on those days – all work must be voluntary. Again, there is only a very limited exception to the voluntariness requirement under the law if the work being performed is both (1) absolutely necessary and (2) can lawfully be performed on Sunday. As stated above, work on Sunday may only occur without a permit if the work for technical reasons requires continuous operation.

Employees may volunteer to work on legal holidays, and premium pay is not required.

Warehouses and Delivery Centers

An Act Relative to Job Creation and Workforce Development, signed by Governor Baker on August 10, 2016, amended the Blue Laws to allow warehouses and delivery centers to remain open on Sundays and holidays. The Act revised a section of the law that previously applied only to the transport of goods and commerce by motor truck or trailer. The section now includes the “delivery of goods in commerce,” including the operations of facilities and warehouses related to the delivery.

This means that warehouses and delivery centers and transport operations may operate as usual on December 25, December 26, and January 1. As written, the law does not require these employers to provide premium pay, and the voluntariness requirement does not apply.

Retail Employers

Retail employers in Massachusetts may not open on Christmas Day (December 25). Retailers operating on December 26 must pay non-exempt employees who work on that day premium pay, defined as at least one and one-half times the employee’s regular rate of pay. Retailers who open on January 1, and January 2 will also be required to pay non-exempt employees premium pay and all work must be voluntary. However, premium pay on December 26, January 1, and/or January 2 can be off set against any overtime worked in the same workweek. There will be no pyramiding of premium pay, which would require employers to pay overtime based on the premium rate.

Additionally, retailers cannot require employees to work on December 26, January 1, or January 2. All work on those days must be voluntary, and refusal to work cannot be grounds for discrimination, dismissal, discharge, reduction in hours, or any other penalty.

Non-Retail, Non-Manufacturer

Employers who are not retailers or manufacturers may not operate on December 25, December 26, and January 1 unless they are subject to one of the fifty-five exemptions in the Blue Laws, or obtain a permit from the local police department to operate. Non-retail employers that fall under one of the exemptions or receive a permit are not required to provide premium pay, and the voluntariness requirement does not apply (again, religious accommodation requirements must still be met).

These employers may open on January 2, even without an exemption or permit and the premium pay and voluntariness requirements do not apply.

A Word About Religious Accommodation

With holidays falling on Sunday employers should remain thoughtful of religious accommodations to avoid a claim of discrimination. Under Massachusetts law, “it is unlawful for an employer to impose upon an employee or prospective employee as a condition of obtaining or retaining employment any terms or conditions which would require the individual to violate or forego a practice required by his or her religion. This includes but is not limited to requiring an employee or prospective employee to work on any day or portion thereof that the employee observes as a Sabbath or holy day.”

To obtain a religious accommodation, an employee or applicant must demonstrate that the observance of Sunday or the holiday is a required practice of his or her religion and must notify the employer at least ten days in advance of the requested absence and provide notice that the absence is for religious purposes. Once this is done, the employer is required to grant the accommodation unless it would impose an undue hardship.

These laws are enough to give anyone the Holiday “blues,” but we are here to help!