A REFERENCE GUIDE TO EMPLOYMENT LAWS FOR MASSACHUSETTS COMPANIES - 2006 Edition

This Employment Laws Reference Guide has been prepared by the staff of A.I.M.'s Employer's Resource Group and is intended as a quick reference for use by A.I.M. members in understanding state and federal laws, regulations, and policies affecting employers in Massachusetts. The laws and regulations listed reflect the most common areas of concern to employers. The Reference guide, however, must always be used within the context of each individual company's human resources practices and policies, as well as within the context of any union or other employment understanding. Please consult with your employment attorney before taking any action based on this Reference Guide. The laws are current as of the time of this pamphlet's printing. Significant changes will be reflected in subsequent updates. All citations for the labor statutes are to the Massachusetts General Laws (M.G.L.) and to the Code of Massachusetts Regulations (C.M.R.).

Unlimited access to our Human Resource Hotline at 800-470-6277 is a privilege of A.I.M. membership. A ready resource for A.I.M. members, the Employer's Resource Group fields hundreds of questions each week on topics such as employment law, employee relations, policies and procedures, compensation, employee benefits, employment trends, performance management, discipline and discharge, and employment trends. We are also available to further explain the information contained in this pamphlet, to assist directly with the implementation of programs and policies and to answer any questions that arise in the day-to-day business of maintaining excellence in employer/employee relations.

A note about the impact of differences in Federal and state law
The conflict between state and federal law occurs throughout employment law. Generally federal law is seen as being "permissive," that is it establishes a minimum threshold that all parties must adhere to but "permits" states to adopt and enforce standards more favorable to employees. As a result there are frequent discrepancies between the reach of state and federal law. To cite a few examples, the federal minimum wage is $5.15 per hour but Massachusetts minimum wage is $6.75 per hour; federal unemployment insurance law requires 26 weeks of benefits, Massachusetts allows for 30 weeks; and while federal anti-discrimination laws applies to employers with 15 or 20 employees (depending on the law), Massachusetts law applies to all employers with six or more employees. Exceptions to this rule do exist. For example, the federal Occupational Safety and Health Act (OSHA) generally preempts state health and safety laws, creating a uniform national standard.

Armed Services
In September 2004, Massachusetts adopted a law prohibiting employment discrimination against members of the armed services. The new law specifically bans employers from denying employment, re-employment, and retention of employment, promotion or any benefit of employment to any person because of their membership in the armed services or obligations to any military service. The law covers discrimination against any person who "applies to perform" military service as well. The law does not impose any greater compliance burdens than the ones already imposed by the federal Uniformed Services Employment and Re-employment Rights Act (USERRA) of 1994. (See military leaves below for a more detailed discussion of USERRA.)

Background and Credit Checks
It is lawful for employers to conduct background and credit checks on applicants for employment. In fact, it is highly recommended that employers perform very thorough background checks. For employers that use a third party to carry out the investigation, there are certain compliance issues to be aware of.

The federal Fair Credit and Reporting Act (FCRA) typically requires an employer to get an applicant's prior written consent before initiating third-party background or credit checks or obtaining reports. Employers who rely on such reports to take an adverse employment action (i.e., denying an applicant a job, reassigning or terminating an employee, or denying an employee a promotion) must give the affected individual a pre-adverse action disclosure and a reasonable period of time to correct any misinformation in the report. After the adverse action has been taken, the employer must give the affected individual notice of the action and provide him/her with additional disclosures, including the name, address, and toll-free telephone number of the agency that made the report; a statement that the agency that supplied the report did not make the decision to take the adverse action and cannot give specific reasons for it; and a notice of the individual's right to dispute the accuracy or completeness of any information the agency furnished.

A 2003 amendment to the FCRA law exempts certain third party investigations, including those related to employee misconduct such as sexual harassment and violations of state and federal law, from the prior approval requirement. Please call the Employer's Resource Group if you are interested in learning about A.I.M.'s reference checking services.

Effective June 1, 2005 the Federal Trade Commission issued a final rule requireing any business that uses a consumer report for business purposes to properly dispose of that consumer information. The rule applies to consumer reports and information derived from consumer reports. Disposal practices are required to prevent the unauthorized access to, or use of, information in a consumer report. Employers may dispose of the information by contracting with a third party to reasonably and appropriately dispose of the information. The employer must monitor the third party's performance to ensure compliance. An employer may also create its own policies and procedures to reasonably and appropriately dispose of the reports.

Disability
For more detailed information, please refer to A.I.M.'s Reference Guide, Disability Laws.

Federal Law
The Americans with Disabilities Act (ADA) of 1990 applies to employers of 15 or more employees. It prohibits an employer from using a disability as a basis for discrimination in employment. The term disability is defined by the ADA as: (1) having a physical or mental impairment that substantially limits one or more of the individual's major life activities, (2) having a record of such impairment, and/or (3) being regarded as having such impairment. An applicant cannot be asked to provide medical information (or be asked about prior workers compensation claims) prior to a bona fide offer of employment.

The U.S. Supreme Court has ruled that an employee cannot qualify as disabled merely because he or she cannot perform a specific job or task because of physical limitations resulting from an injury or illness. The employee must prove that the injury or illness is "permanent or long term" and significantly impairs the ability to do manual tasks of "central importance to daily life" and not just those tasks carried out in the workplace. The U.S. Supreme Court also ruled that violating a seniority provision in order to provide an accommodation was not a reasonable accommodation without a showing of special circumstances. Further, employers can consider refusing to hire or transfer disabled persons whose disability creates a significant risk (i.e. a direct threat) to the health or safety of themselves or others in the workplace. These recent decisions reaffirm that individualized assessment must be a part of all disability-related employment actions. Employers must also remember that there may be "reasonable accommodation" requirements for existing employees with disabilities, including addictions to alcohol or certain legal drugs.

State Law
Like the ADA, Massachusetts law requires protection against employment discrimination for "qualified" (able to perform the essential functions of the position with or without reasonable accommodation) disabled individuals. Employers of six or more must reasonably accommodate a qualified disabled person unless to do so would cause undue hardship to the employer. In addition, an employer may not make any pre-employment inquiry as to whether the applicant is disabled or as to the nature or extent of the disability. A company may condition an offer of employment on the applicant successfully passing a medical examination conducted to ascertain whether a person, with or without a reasonable accommodation, can fulfill the essential functions of the position (M.G.L. c. 151B§3,4). Once employed, the employee may be asked to submit to a medical examination only when job-related and consistent with business necessity.

In 2005, the Massachusetts Appeals Court ruled that allowing an employee to work from home may be considered a reasonable accommodation for an employee's disability. Whether or not the employer must make such an accommodation depends on a number of factors, including can the essential functions of the job be performed at home, does the employer allow other employees to telecommute, can the employee perform the job without direct supervision and how much equipment may the employee need at home to perform the job?

Drug Testing
The federal Drug Free Workplace Act of 1988 requires federal government contractors and employers receiving contracts or grants of $25,000 or more to take specific steps to ensure a drug-free workplace. The Act does not require testing for illegal drugs. However, testing of certain employees is required if the company must comply with Department of Transportation (DOT) commercial driver's license regulations or has contract work with the DOT. For more information, call the DOT: 202-366-4000 or visit their website: www.dot.gov.

To date, Massachusetts has no statutory restrictions on drug testing of employees or applicants for employment. However, the Massachusetts Supreme Judicial Court has established principles for such testing through case law.

Generally, the court holds that random drug testing violates an employee's rights under the state privacy statute unless the job is safety sensitive, e.g., requires driving or the operation of dangerous machinery. Under MCAD guidelines and the ADA, employers are advised to test only after a bona fide offer of employment has been made and to conduct all testing of prospective and current employees under a specific policy that has been made known to these individuals. If the test is for illegal drugs only, applicants may be tested before the offer o f employment under the Americans With Disabilities Act (ADA).

Employment Applications
For more detailed information please refer to A.I.M.'s Reference Guide to Employment Applications and Interviews.

The following are mandatory on a Massachusetts employment application:

1. No Pre-Employment Medical Inquiries - Any question designed to ascertain the current or past health of an applicant is illegal. Omit any reference to disabilities or impairments, excessive absences, prior workers compensation claims, injuries, etc. It is permitted to ask about disabilities as part of a voluntary affirmative action data collecting section of the form that is not seen by the person conducting the interview. Please call A.I.M. for more information or for sample forms.
   
2. Lie Detector Language - All employment application forms in Massachusetts must contain the following specific language regarding the use of lie detector tests before or during employment:
   
   "It is unlawful in Massachusetts to require or administer a lie detector test as a condition of employment or continued employment. An employer who violates this law shall be subject to criminal penalties and civil liability."
   
3. Verifiable Volunteer Work - When employers ask for employment history, they must include language that invites applicants to list any verifiable volunteer work, but explains that the applicant need not include organizational names that would indicate possible membership in a protected class such as race, color, religion, sex, or national origin.
   
4. Criminal Record - Information about prior criminal convictions must be carefully worded: "Have you ever been convicted of a felony? Is yes, give dates and details of conviction." (An applicant for employment with a sealed record on file with the Commissioner of Probation may answer "no record" with respect to an inquiry relative to prior arrests, criminal court appearances or convictions. In addition, any applicant for employment may answer "no record" with respect to any inquiry relative to prior arrests, court appearances, and adjudications in all cases of delinquency or as a child in need of services which did not result in a complaint transferred to the superior court for criminal prosecution.)
   
   An applicant cannot be legally rejected in Massachusetts due to a felony conviction unless the nature of the crime is related to the job for which the individual is being considered. For example, an applicant for an accounting position should not be rejected solely on the basis of a conviction for draft evasion. The applicant could be legitimately rejected if the conviction were for embezzlement or theft.
   
5. Genetic Discrimination - Massachusetts General Laws c.151B prohibits employers from (1) terminating or refusing to hire individuals on the basis of genetic information; (2) requesting genetic information concerning employees, applicants, or their family members; (3) attempting to induce individuals to undergo genetic tests or otherwise disclose genetic information; (4) using genetic information in any way that affects the terms and conditions of an individual's employment; or (5) seeking, receiving or maintaining genetic information for any non-medical purpose.

Massachusetts General Laws c. 151B defines "genetic information" as any written record or explanation of a genetic test of a person's family history with regard to the presence, absence or variation of a gene. A genetic test is broadly defined as "any test of DNA, RNA, mitochondrial DNA, chromosome, or proteins for the purpose of identifying genes or genetic abnormalities." The law expressly excludes drug and alcohol tests from this definition, meaning that employers may continue to conduct such tests in accordance with existing legal requirements.

While not mandatory on an application, an employer may choose to include the follo0wing statement on its application.

Company EEO Statement - A company's equal employment opportunity (EEO) statement must include "sexual orientation" and should be similar to the following: "Our company is committed to a policy of nondiscrimination and equal opportunity for all employees and qualified applicants without regard to race, color, religious creed, national origin, ancestry, sex, age, disability, veteran's status, or sexual orientation."

English-Only Rules
English-only rules are presumed to violate antidiscrimination laws when they require that English be spoken at all times (e.g. during breaks) in the workplace. The federal court for Massachusetts ruled in 2003 that an employer may require employees to speak English during work time if the policy is based on a legitimate business necessity.

Independent Contractors
Action by the Massachusetts Legislature in 2004 significantly limits who is eligible to be an independent contractor. For an employer to demonstrate that someone is an independent contractor, the employer must be able to show that the worker meets all three of the following tests:

1. The individual is free from control and direction in connection with the performance of such service under his or her contract, and in fact;
2. Such service is performed outside the usual course of business; and
3. Such individual is customarily engaged in an independently established trade, occupation, profession or business.

Pursuant to this law change, the Attorney General's office published an Advisory on the Independent Contractor Law in late 2004 that is available on its Web site at www.ago.state.ma.us. The Advisory highlights the changes in the law and describes the imposition of civil and criminal penalties for violating the law.

Job Descriptions
While there is no legal requirement that an employer have formal job descriptions, there are many benefits to having well-defined duties, responsibilities and skill/education requirements. The job description is invaluable when sending an employee for a post-offer, pre-employment medical examination; to determine if an employee is "fit for duty" following an injury or illness; or to determine how to accommodate a disabled employee under the Americans with Disabilities Act (ADA). Job descriptions also facilitate the proper classification of positions as exempt or nonexempt based upon job duties under the Fair Labor Standards Act. They are also invaluable in the employee selection process and in managing employee performance. Please call the Employer's Resource Group if you would like assistance with writing or reviewing job descriptions at 800-470-6277.

National Origin/Ancestry
It is illegal to discriminate against an applicant and/or an employee on the basis of characteristics associated with national origin or ancestry, such as marriage to a person of a particular national origin, participation in organizations identified with a particular national origin, or having a name associated with a particular national origin.

Non-Compete Agreements
A non-compete agreement is typically a separate document or a clause included within another employment document, such as a hiring or separation agreement, designed to protect an employer's commercial goodwill, including customer lists and confidential business information. An employer may require some or all employees to sign a non-compete agreement to prevent them from competing directly with the employer at another company or by establishing their own business. To be enforceable, an agreement must be reasonable in the geographical area covered and in its duration. A non-compete agreement may be signed at the time of hire, during the period of an employee's employment, or at the time of separation. Any employer considering requiring a non-compete should contact its legal counsel for assistance in preparing the document.

Non-Disclosure Agreements
Non-disclosure agreements require employees not to reveal any confidential information such as trade secrets or inventions after they leave the company. The non-disclosure agreement should specifically discuss the types of information the employee is to be exposed to and is prohibited from disclosing. A non-disclosure agreement typically does not cover information that could easily be obtained from other sources or that becomes public knowledge. Any employer considering requiring a non-disclosure agreement should contact its legal counsel for assistance in preparing the document.

Pre-Employment Physicals and Medical Inquiries
An employer may make an inquiry about an applicant's present or past health only following a bona fide offer of employment. If a company requires or requests a physical examination following the offer of employment and designates the physician for prospective employees, or for current employees, the company must pay for the examination (M.G.L. c. 149§159B).

If a company requires a physical examination of any employee, a copy of the medical examination must be furnished to that individual upon request (M.G.L. c. 149§19A).

Pregnancy
An employer subject to state and federal antidiscrimination laws may not deny a woman the right to work or restrict her job functions, such as heavy lifting or travel, during or after pregnancy or childbirth when the employee is physically able to perform the necessary functions of her job. The mere fact of pregnancy does not automatically establish a disqualifying disability. An employer may not, therefore, use a woman's pregnancy, childbirth, or potential or actual use of maternity leave as a reason for an adverse job action, such as refusing to hire or promote her or for discharging her, laying her off, failing to reinstate her, or restricting her duties.

The federal Pregnancy Discrimination Act also states that the employer must treat pregnancy-related disabilities in the same manner as any other disability. All health insurance contracts for both individual and family coverage must provide benefits for pregnancy-related conditions on the same basis as benefits are provided for any other medical condition.

Religious Freedom
The Massachusetts Antidiscrimination Statute protects individuals from discrimination in the workplace based on their sincerely held religious beliefs, without regard to whether such beliefs are approved, espoused, prescribed, or required by an established church or other religious institution or organization. Any employee intending to be absent from work due to religious reason may be required to notify the employer at least 10 days in advance. An employer may refuse to accommodate such a request if it can show that such an accommodation would be an undue hardship on the business. The employer need not pay the employee for the day and shall, whenever practicable in the judgment of the employer, arrange to have the employee work another day to make up the time. Employers should proceed cautiously when dealing with such issues as facial hair, body and facial piercings, tattoos, and requests for days off due to religious observances (M.G.L. c.151B §4).

Retention of Applications
Most employers retain application forms for one year or longer depending on the requirements under specific laws. To defend against a Title VII (15 employees or more) discrimination charge of an age discrimination charge under the Age Discrimination in Employment Act (ADEA) (20 employees or more), applications must be retained for one year. In addition, under Title VII, application forms for persons applying for apprenticeship programs must be kept for two years after the application is received. Federal contractors who must comply with Executive Order 11246 and/or the Vocational Rehabilitation Act are required to retain all applications from individuals with disabilities for one year.

For employers that must have an Affirmative Action Plan, applications should be kept for the current and past Affirmative Action plan years. The employer subject to the AAP is responsible for designating an AAP year. Examples of AAP years include calendar year, fiscal year or year beginning with the date of the commencement of coverage. Employers subject to an AAP for the first time need only retain applications for that year and going forward.

It is also recommended that an employer not keep applications any longer than required to do so by law. For more information, please refer to A.I.M.'s Reference Guide, Personnel Records, Federal and State Recordkeeping Requirements.

Same-Sex Harassment
The U.S. Supreme Court has held that same-sex harassment claims - in which an employee claims harassment by another employee of the same sex - are actionable under Title VII, the federal antidiscrimination law. The harassing conduct need not be motivated by sexual desire, but must nonetheless be severe, pervasive, and offensive to a reasonable person.

Sexual Harassment
Sexual harassment is a form of illegal sex discrimination under state and federal law. In Massachusetts, all employers of six or more employees must have a sexual harassment policy that is distributed to new employees when they are hired and to all employees annually. The Massachusetts Appeals Court ruled in 2005 that volunteers are also covered under the sexual harassment law and may sue on the same basis as employees. The MCAD has developed a model policy and a poster that must be posted with an employer's other federal and state required postings (M.G.L. c. 151B§1). The MCAD has issued sexual harassment prevention guidelines outlining responsibilities and investigations of complaints. These guidelines indicate that training of managers supervisors in this area is strongly encouraged. An employee will not be disqualified from receiving unemployment benefits if the reason he or she left work was sexual harassment. For more detailed information, please see A.I.M's Reference Guide on Sexual Harassment. Please contact A.I.M. for sample policies, training services, and investigation of complaints.

Sexual Orientation
A Massachusetts employer may not discriminate against an individual in compensation or in terms, conditions, or privileges of employment due to that person's sexual orientation unless based upon a bona fide occupational qualification (M.G.L. c. 151B§4).

II. EMPLOYMENT

At-Will
In general, the employer's decision to hire an employee does not represent a commitment to employ that person for any definite period of time. The employee may quit at any time and for any reason, and the employer may terminate the employee at any time and for any reason except for those reasons specifically forbidden by state and federal law.

Employee Handbooks and Personnel Policies
Employers are not required by law to have employee handbooks. Many employers choose to create such documents in order to establish the terms, conditions, and benefits of employment. It is important that handbook language be carefully drafted and that they contain sufficient disclaimers to avoid creating unintended contractual obligations to employees. Please contact A.I.M.'s Employer Resource Group for more information or for handbook related services including creating, reviewing and editing.

Employers are also not required by law to have written personnel policies, except for sexual harassment policies (6 employees or more) and in some cases a Family and Medical Leave Policy (50 employees or more). An employer of 20 or more employees who elects to have a written personnel policy must keep an updated copy of such policy on the employment premises.

Employment of Minors
There are a number of categories of hazardous areas in which minors under the age of 18 may not work. No minor under 16 may work in a manufacturing facility. All minors must secure an employment permit (minors 14 and 15 years of age) or an educational certificate (minors 16 and 17 years of age) from the town in which they reside in order to work. Certain maximum daily and weekly hour restrictions apply during school and non-school hours depending on age (14 & 15, 16 &17). The minor's weekly schedule of hours and breaks must be posted in a conspicuous area. Certain exemptions from these provisions are available for agriculture, for theaters and restaurants, or for minors in vocational education programs (M.G.L. c. 149§60-98). Please call A.I.M. for the complete list of exemptions. For more information, please refer to A.I.M.'s Reference Guide, Employment Applications and Interviews.

Immigration
The federal Immigration Reform and Control Act of 1986 requires employers to verify the identity and work authorization of all employees within three business days of hire. This law requires recordkeeping of I-9 forms used in the identification and authorization process. Employers should keep all I-9 documentation in separate files apart from the personnel records as they may be subject to a U.S. Citizenship and Immigration Services (USCIS) audit. The USCIS published a revised form I-9 in 2005 reflecting the transfer of the U.S.C.I.S. to the Department of Homeland Security.

The U.S.C.I.S. regulations have also changed the list of acceptable identification documents. However, the changes were not incorporated into the revised I-9. The new list "A" of acceptable documents includes Form I-7666 (Employment Authorization Document), and Form I-551. The following documents have been removed from list A of acceptable documents: Certificate of U.S. Citizenship (#2), Certificate of Naturalization (#3), Unexpired Reentry Permit (#8) and Unexpired Refugee Travel Document (#9).

A new Form I-9 from USCIS is expected in 2006 to reflect the changes in acceptable identification documents.

Please contact A.I.M. for more information about this topic or visit the Immigration Service Web site listed below. Failure to comply with the law may lead to monetary penalties of up to $10,000. In addition, this law provides protection to legal aliens against unlawful discrimination. Please call A.I.M. at 800-470-6277 for an I-9 form and instruction booklet or download it from the USCIS Web site www.uscis.gov.

New Hire Reporting
The federal Personal Responsibility and Work Opportunity Reconciliation Act of 1996 requires every employer to report all new hires and independent contractors who will be paid over $600 in a calendar year to the Massachusetts Department of Revenue, which will then transmit the information to the National Directory of New Hires.

The required information must be submitted to the Massachusetts Department of Revenue within 14 days of the employee's effective date of employment or effective date of reinstatement after a lapse in pay (a lapse in pay would be a period of time beyond 30 days) (M.G.L. c. 62E§2). This report must contain the employer's identification number, the employer's name and address, as well as the employee's name, address, social security number and hire or reinstatement date.

Any employer with 25 or more employees is required to report new hires electronically. Employers may do this through the Department of Revenue's Web site, www.mass.gov.dor. Click on Business Information and then the New Hire Reporting Quick link. Employers who withhold child support payments for 5 or more employees/independent contractors must use Electronic Funds Transfer to remit the monies withheld.

Performance Appraisals
There is no law requiring that employees be appraised on their performance. However, an accurate and well-written performance appraisal can provide an important defense when taking adverse employment actions such as corrective action or termination.

Federal labor law protections provide union-represented employees the right to have a representative present (so called "Weingarten rights") if that employee has a reasonable belief that a meeting with management, including a performance appraisal may lead to disciplinary action. The National Labor Relations Board (NLRB) recently reversed itself and ruled that Weingarten rights do not extend to non-union settings.

Performance appraisals should highlight areas of needed training. Again, except in certain jobs that, by law, require ongoing training, training in general is not mandated. However, annual sexual harassment prevention training and other important topics, such as management and supervisory skills training, have been proven to assist in the defense of employment decisions and to potentially deflect lawsuits.

Personnel Records
Certain records kept by an employer relating to an employee's qualifications, compensation, disciplinary action, promotion, and transfer are considered to be personnel records in Massachusetts and are subject to state regulation. Employers of six or more employees must allow employees the right to review their personnel records, make copies of them, and amend or remove any disputed information. If there is a disagreement with any information contained in a personnel record, removal or correction of such information may be mutually agreed upon by the employer and employee. If an agreement is not reached, the employee may submit a written statement explaining the employee's position which shall become part of the employee's personnel file. Employers of twenty or more employees must retain a copy of the personnel record until at least three years after the employment relationship ends or throughout the duration of any ongoing litigation. When an employee makes a written request to review his or her personnel file, the employer must provide it within five business days. Fines up to $2,500 may be imposed for violations of these requirements. For more detailed information on recordkeeping requirements, refer to A.I.M.'s Reference Guide, Personnel Records, Federal and State Recordkeeping Requirements.

Privacy
Employees are protected against unreasonable, substantial, or serious interference with their privacy (M.G.L. c. 214§1B). Massachusetts courts have held that this means a balancing of the employer's legitimate business concerns against the employee's reasonable expectation of privacy in the workplace. This balancing test has been applied in such areas as drug testing, release of medical or personal information, use of electronic information (such as e-mail), searching desks and lockers, and employee surveillance.

Smoking
In 2004 Massachusetts adopted a law requiring all employers of one or more employees to ban smoking in their workplaces as of July 5, 2004. Employers may continue to designate a smoking area outside of the workplace but it must be far enough away from the building that the smoke cannot enter the workplace. Employers bear primary responsibility and liability for enforcement. "No smoking" signs must be conspicuously posted so they are clearly visible to all employees, customers or visitors while in the workplace. The law allows for limited exemptions in certain businesses such as smoking bars, and hotels and motels with designated smoking rooms. The law imposes fines of $100 to $300 per violation assessed against the employer, with harsher punishment possible for repeat offenders. The law also calls for fines of $100 to be levied against individual violators. The law is enforced by the local board of health, the state Department of Public Health, the local inspection department, municipal government, and the Alcoholic Beverage Control Commission.

The Department of Public Health issued smoking law guidance documents in 2005 addressing smoking in vehicles. The guidance states that company vehicles must be smoke free if more than one employee may use the vehicles or if more than one person occupies it at the same time.

Social Security No-Match Letters
The Social Security Administration (SSA) sends a no-match letter to an employer when the number the employer reports social security withholding does not match the SSA records. According to the Social Security Administration, an employer should seek to verify the number with the employee or require the employee to contact the SSA to correct the number. According to the Social Security Administration, an employer should not take any disciplinary action against an employee merely because the employee was the subject of a no match letter. The Social Security Administration offers employers a Web site to verify social security numbers for new hires or for the entire payroll. The Web site address is www.ssa.gov/employers/ssnv.htm.

Training and Development
Workforce training may be eligible for funding through the Massachusetts Division of Career Services (D.C.S.) Workforce Training Grants. The workforce training fund is financed entirely by a surcharge on employer's unemployment insurance tax. Employers are eligible to apply for workforce training grants of up to $250,000. Grant application cycles occur usually three or four times a year. For more information about the grants and how to apply, please contact A.I.M. There is also an Express Grant program available for companies of 50 or fewer employees for certain pre-determined courses from a pre-approved list of trainers. Express Grant applications can be made anytime; there are no deadlines. For more information, please go to the D.C.S. Web site at www.detma.org or call A.I.M. for assistance.

Unionized Employers
Massachusetts does not have a "right to work" statute. Therefore, an employee may, after a stated period of time, be required to join a union or pay union dues as a condition of employment. Employees have the right to bargain collectively (with or without a union) and to engage in other concerted activities with respect to their employment.

III. PAYMENT OF WAGES

Classification of Employees
The federal Fair Labor Standards Act (FLSA) identifies two categories of employees: nonexempt and exempt. Nonexempt employees may be paid on an hourly or salary basis and must receive time and one-half for all hours worked in excess of 40 per workweek. Exempt employees must be paid on a salary basis and must meet the salary and duty test for administrative, professional, executive, computer-related, or outside salespersons as stated by the FLSA. Exempt employees are not entitled to overtime, regardless of the number of hours worked per workweek.

In 2004, the Department of Labor released new "overtime" regulations making significant changes to them. The new regulations focus principally on the executive, administrative, professional, outside sales and some computer employees. Under the new regulations, employees earning less than $455 per week or $23,660 per year are now to be classified as non-exempt, no matter what duties the employee performs. The new regulations also eliminate the short and long test, replacing them with an overall duties test. The new regulations also make clear that all "blue collar" employees will be eligible for overtime. All employers are encouraged to review all of their job descriptions and classifications to determine which employees are exempt and which ones are non-exempt. For more assistance on this issue, please contact A.I.M.'s Employer Resource Group.

Garnishment of Wages
Under federal law, garnishments are limited to the lesser of 25 percent of disposable earnings or the difference between disposable earnings (earnings after taxes and health insurance deductions) and 30 times the current minimum wage rate (Title III of the Consumer Credit Protection Act of 1968). An employee cannot be fired for the garnishment.

Under state law, the first $125 of an employee's wages each week shall be exempt from garnishment for debts or claims (M.G.L. c. 246§28).

In cases of child support garnishments, up to 65 percent of take-home pay can be garnished each week. Child support has priority over all other orders. If a judge orders an employee to obtain health-care coverage for his/her child, the employee must do so if such coverage is available through the employer. Employers are obligated to cover a child subject to such an order and may be liable for the full amount of the assigned income or the full amount of medical costs incurred if they fail to comply with an order of income assignment or a health care order (M.G.L. c. 119A§12, 14, 16).

Holiday Work
Public employers must close on all Massachusetts legal holidays while private employers have the option of remaining open with some exceptions. An employer cannot require an employee to work more hours on other days or in any one day in order to make up time lost by reason of a legal holiday (M.G.L. c. 149§46). A calendar of the 11 legal holidays and explanations of payment for each is available through A.I.M. Some special rules apply as follows:

Manufacturers:
Premium pay is not required for work performed on any of the 11 holidays unless established by company policy or pursuant to a union contract. However, on those days designated as "Sunday Law" holidays - to which blue laws apply - manufacturers, unless they are a continuous operation, must secure a permit from the local chief of police to open and work must be voluntary on the part of employees (M.G.L. c. 149§45; c.136§15).

Nonmanufacturers, Retail:
Retail stores may open at any time on New Year's Day, Martin Luther King Day, Presidents' Day, Patriots' Day, Memorial Day, Independence Day , and Labor Day. Retail stores may open on Columbus Day and Veterans Day after noon and 1:00 p.m., respectively. Retailers with seven or more employees cannot require work on New Year's Day, Memorial Day, Independence Day, Labor Day, Columbus Day, or Veterans Day; and if employees work voluntarily, they must be paid time and one-half. Retailers can require employees to work on Martin Luther King Day, Presidents' Day, and Patriots' Day, and there is no time and one-half requirement. Only retail stores exempted by statute may open on Christmas and Thanksgiving. Examples of stores exempt from the blue laws include convenience stores, pharmacies, bakeries, florists, and video rental stores (M.G.L. c. 136§13&16).

Nonmanufacturers, Nonretail:
Establishments that are neither manufacturing nor retail must obtain a permit from the local chief of police to operate on the restricted holidays of Memorial Day, Independence Day, Labor Day, Thanksgiving Day, Christmas Day, Columbus Day before noon and Veterans Day before 1:00pm. If the permit is obtained, employees may be required to work. Pay would be at the employees' regular rate of pay unless otherwise required by union contract or the employer's policies and practices.

Meal Breaks/Rest Periods
Meal Breaks - An unpaid meal break of 30 minutes must be given each employee working six or more consecutive hours. The employer may choose to provide pay for the meal break (M.G.L. c. 149§100). An employee may waive a meal break if the employee voluntarily states this choice in writing. The employee, however, may revoke the waiver at any time. Contact A.I.M. for a sample waiver form.

The Fair Labor and Business Practices Division of the Massachusetts Attorney General's Office may also grant an exemption from the meal break law if it can be made without injury to the persons affected and for the following reasons:

• By nature of certain industry - glassworks, paper mills, ironworks, etc.
• The continuous nature of the processes
• Collective bargaining agreements (M.G.L. c. 149§101)

Rest Periods - There is no requirement for an employer to provide employees with rest periods (e.g. coffee breaks) under either federal or Massachusetts law. The Fair Labor Standards Act (FLSA) requires that if a break is given, and is for 20 minutes or less, it must be paid. Breaks are part of a company's voluntary benefits practice.

Minimum Wage
The current Massachusetts minimum wage is $6.75 per hour for all covered employees. If the federal minimum wage, currently $5.15 per hour, increases to $6.75 per hour or more, Massachusetts minimum wage must exceed it by $.10 per hour. Special rules apply for tipped employees. A poster stating the minimum wage must be posted on the company bulletin board (M.G.L. c. 151§1).

On-Call Pay
Whether time is to be paid as "on-call" depends on whether that time predominantly benefits the employer and whether employees are able to use the time for their own purposes. For example, on-call time is generally not compensable for an employee who is required to wear a pager and answer emergency calls but who can travel within a reasonable distance and can otherwise use the time as he/she chooses. Employees may be compensated at less than their regular rate of pay for their on-call time.

Payment of Overtime
State and federal law requires employers to pay time and one-half for all work actually performed in excess of 40 hours in a given workweek by all nonexempt employees. The FLSA does not consider holiday pay, sick pay, and vacation pay as hours worked for purposes of calculating overtime. An employer, however, may choose to adopt a policy to include time paid but not worked in the calculation of overtime. Note: some industries are exempt from the time and one-half requirement, e.g., mechanics (M.G.L. c. 15§1A). A 2004 Supreme Judicial Court (S.J.C.) decision, Swift v. AutoZone, ruled that retail employers subject to paying overtime under the Sunday Opening law and the Fair Labor Standards Act may offset the overtime paid for working Sunday against the FLSA-based overtime on an hour-for-hour basis up to the number of hours worked on Sunday. The new FLSA overtime regulations also allow an employer to elect to pay exempt employees overtime if it so chooses.

Mandatory Overtime
Employers may require overtime by employees as a condition of employment or continued employment. (See restriction for Sunday work for retail stores and shops.) If an employee works overtime that was not authorized, that employee must be paid for time worked, but can be disciplined.

The FLSA and the Massachusetts Minimum Wage law do not impose any limitation on the number of hours that an employee may work. Instead, they require that employers pay additional wages (e.g. overtime pay at one and one-half times the employee's regular wage) for hours worked in excess of 40 hours a work week.

Payment of Wages
Under Massachusetts law, all nonexempt employees must be paid weekly or biweekly and within 6 days from the end of the pay period. Exempt employees may be paid weekly, biweekly, semi-monthly, or, with their consent, monthly. Employers changing from weekly to biweekly pay for non-exempt hourly employees must provide each employee with written notice of such change at least 90 days in advance to the first biweekly pay  (M.G.L. c. 149§148).

Employers are required to withhold various state and federal taxes from employees' paychecks for remittance to governmental agencies and must maintain forms (such as Form W-4) and records of these withholdings.

Employers must furnish each employee with a written indication (e.g., a pay statement) containing certain specific information, including notification of deductions or contributions from such employee's pay, at the time such deductions or contributions are made. Employers are also required to provide new employees written notification concerning the nature of deductions and contributions (M.G.L. c. 148§150A).

Any employer paying wages by check must ensure facilities are available for cashing the check (at a bank or elsewhere) without any fee to the employee (M.G.L. c. 149§148).

In 2005, the Massachusetts Attorney General's Department of Fair Labor and Business Practices issued an updated Wage and Hour Law Poster that is available from it s Web site at www.ago.state.ma.us.

An employee discharged from a company for any reason must be paid his or her wages in full on the day of discharge. If the employee is a state or local employee, full wages must be paid on the next payday. Employees who voluntarily leave employment must be paid all wages by the next regular pay date. The word "wages" includes any holiday or vacation pay earned by an employee under an oral or written company policy or union contract (M.G.L. c. 149§148).

Show-Up Pay
Massachusetts minimum wage laws provide that an employee who reports for duty by request or with permission of an employer must be paid for at least three hours. The employee must be paid at the employee's regular rate of pay for the time actually worked and at least the state minimum wage for the balance of the three hours if work is not performed for the entire three hours. Show-up pay applies if a person shows up for work and has not been notified by the company that work is unavailable for that day or is sent home for lack of work. Union contracts or company policy may indicate a higher rate of pay and/or payment for more than three hours (455 CMR §2 §3).

Sunday Work
Manufacturers:
All manufacturers, except continuous operations, need to secure a permit from the local chief of police to perform necessary work on Sunday. Continuous operations companies can require employees to work and do not have to pay time and one-half for work performed on a Sunday unless such work constitutes overtime under the provisions of the Fair Labor Standards Act (M.G.L. c. 136 §7). Any manufacturing, mechanical, or mercantile employer must post the names of those employees working on a Sunday and their designated days of rest (M.G.L. c. 149 §51).

Retail stores and shops:
Retail stores may open at any time on Sundays but cannot require that an employee work. If the store employs more than a total of seven persons, including the proprietor on Sunday or any other day of the week, they must pay time and one-half to all nonexempt employees for all hours worked on Sunday. (M.G.L. c. 136§5,6). See the payment of overtime section above for a discussion of retailers and overtime in more detail.

There are no restrictions on Sunday work for employers that are non-manufacturing and non-retail.

Training Pay
Training required by an employer is considered "hours worked" and must be paid at the regular rate of pay. Generally, attendance at training programs does not constitute "hours worked" if attendance is outside normal working hours; is voluntary; is not directly related to the employee's current job assignment; and if no work of value to the employer is performed by the employee during the training. All four of these requirements must be met to avoid payment obligations.

Travel Pay
The general rule is that commuting to work time is not paid work time. However, the FLSA covers three different forms of travel time for nonexempt employees that may constitute paid worktime. They are travel during the workday, out of town travel and overnight travel.

Travel during the workday that occurs after the employee has reported for work and that is for the benefit of the employer is usually compensable. Employees that travel out of town generally must be compensated for the time the employee is traveling. However, commuting time to the place of departure (e.g. airport, train station) us excluded from paid work time. Overnight travel is compensable when the travel time occurs during the employee's regular work hours. This rule applies even if the employee is traveling on non-regularly scheduled work days (e.g. Saturday or Sunday).

Vacation
Employers are not required to offer paid vacation. However, once an employer establishes a vacation policy, the employee must be paid for earned vacation either when the vacation is taken, at year-end (unless it is stated that vacation may be carried forward into the next year, or there is a "use it or lose it" provision), or at the time employment terminates. The employee must be paid all vacation time that is due but unused. It is important that an employer's policy is very specific as to how vacation is accrued and under what circumstance it is deemed to be "due" the employee. This is because the Massachusetts Attorney General's Advisory states that paid vacation is to be regarded as wages. Thus, a company may want to issue a written statement or policy that clearly separates paid vacations from any paid personal time. If this is not done, all paid personal time will be considered as vacation. Please contact A.I.M. for assistance in developing an effective vacation and/or paid time off policy.

Work Schedule/One Day of Rest
Employers are generally free to set whatever hours of work they wish for employees. However, every employee in manufacturing, mechanical, or mercantile establishments must be given an unbroken 24-hour period of rest in every consecutive seven days of work, which effectively means after six days (M.G.L. c. 149§48).

An exemption to this provision may be issued upon written request to the state's Fair Labor and Business Practices Division if it is proven to the Division's satisfaction that special circumstances require it. Such an exemption will be granted for a 60-day period and can be renewed (M.G.L. c. 149§51A).

IV. HEALTH INSURANCE AND BENEFITS

In general, an employer can determine what benefits, if any, it wishes to offer to its employees. Once a benefit program such as health insurance is established, the employer must offer the benefit in a nondiscriminatory manner.

Insured plans purchased through insurance carriers approved by the Massachusetts Division of Insurance are subject to Massachusetts insurance law, whereas fully self-insured plans are generally exempt from state law. Massachusetts requires that health insurance policies cover biologically-based mental illnesses in the same manner as physical illnesses with respect to diagnosis, treatment and capitation. Any insured plan regulated by the state Division of Insurance must also extend coverage to spouses in same-sex marriages. In the case of a plan termination, a company must comply with appropriate state and federal law regarding plan participants' rights for coverage continuation. For more detailed information, please refer to A.I.M.'s Reference Guide, COBRA: Federal and State Requirements for Group Health Insurance Continuation and Human Resource Issues Regarding Same-sex Marriage in Massachusetts.

A federal law, the Employee Retirement Income Security Act (ERISA), was passed in 1974 to govern how some benefit plans must operate in the areas of documentation, record-keeping and fiduciary obligations. These include both employee health and welfare plans, and pension plans, which are commonly known as defined benefit and defined contribution plans. An example of a defined benefit plan is a pension plan that includes future retirement benefits based on criteria such as years of service, and/or income level. An example of a defined contribution plan is a deferred compensation program such as a 401(k) retirement plan where participants can invest pre-tax dollars toward retirement and defer the taxes until the dollars are withdrawn.

The Massachusetts Division of Medical Assistance (DMA) manages the Insurance Partnership, which makes health insurance more affordable for qualified small businesses and their low-income employees by offering a program that can help pay for the insurance offered by an employer of 50 or fewer employees. Please contact DMA at 888-665-9993 or visit their Web site at www.state.ma.us/dma.

V. LEAVES OF ABSENCE

For more detailed information, please refer to A.I.M.'s Reference Guide, Legally Required Leaves.

Impact of the Goodridge "same-sex" marriage decision on leaves of absence laws in Massachusetts.

In November of 2003, the Massachusetts Supreme Judicial Court ruled in Goodridge v. The Department of Public Health that, under Massachusetts law, the phrases "spouse" and "marriage" must now include same-sex couples. The Goodridge decision took effect on May 17, 2004. Federal law, however, is controlled by the Defense of Marriage Act (DOMA) that states that marriage is between one man and one woman. These conflicting definitions may present confusion over who is covered under what law. For example, regulations promulgated by the Department of Labor under the federal Family and Medical Leave Act define a spouse as "A husband or wife as defined or recognized under state law for purposes of marriage in the state where the employee resides, including common-law marriage in states when it is recognized." While that would appear to extend FMLA rights to same-sex spouses "as recognized under state law," it seems apparent that the DOMA (an act of Congress) would supersede the federal regulation (promulgated by an enforcing agency), thereby denying FMLA benefits to the same-sex spouse. The one caveat to that is that the FMLA encourages (and the DOMA does not prohibit), employers from adopting more generous leave policies so an employer could elect to extend FMLA benefits to same-sex couples.

Given this conflict between state and federal law, numerous questions will continue to arise over the rights of same-sex couples and the scope of employers' responsibilities. If you have any questions, please contact the Employer's Resource Group at A.I.M. For more detailed information, please refer to A.I.M.'s Reference Guide: Human Resources Issues Regarding Same sex Marriage in Massachusetts.

Federal Family and Medical Leave Act (FMLA)
Employers of 50 or more employees must provide to eligible employees, during any 12-month period, up to 12 workweeks of job-protected unpaid leave of absence. To be eligible, an employee must have worked for the employer at least 12 months and at least 1,250 hours in the 12 months immediately preceding the leave. Leave may be requested for:

1. Birth of a child,
2. Placement of a child for adoption or foster care, or
3. The "serious health condition" of the employee, or
4. The "serious health condition" of the employee's immediate family member (defined as spouse, parent or child).

The FMLA definitions of a "serious health condition" are varied and often complex. A good general definition is an illness, injury, impairment or physical or mental condition that involves treatment by a health care provider or facility. "Chronic conditions" that may or may not be under active treatment are also covered. Employers are encouraged to call A.I.M.'s Hotline or other professional counsel for clarification regarding specific situations.

It is the responsibility of the employer to notify the employee of his/her rights under the law. If an employer has any eligible employees and has written policy documents or a written handbook informing employees about their employment rights an obligations, the employer must include an FMLA policy. If there is no handbook, the employer must provide the employee with separate written guidance about the employee's rights and obligations. An eligible employee may elect, or the employer may require the employee, to substitute any of the employee's accrued vacation leave, personal leave or sick leave for any of the leave period. An employee on FMLA leave is entitled to have health benefits maintained. If an employee was paying all or part of the premium payments prior to leave, the employee would continue to pay his or her share during the leave period. Employees on FMLA must be reinstated to the same or equivalent position and must not be penalized in any way for taking protected leave. If an employee is laid off from employment pursuant to a reduction in force, the right to FMLA leaves ceases when the lay off becomes effective. The employer should be able to demonstrate that the employee's layoff was not, in any way, related to the use of FMLA leave.

Jury Duty
Massachusetts law requires that employees called for jury duty be given time off from work to serve on a jury. A person cannot be disciplined or discharged for serving as a juror.

Under Massachusetts law, jurors traditionally serve one day or one trial, and employers are required to pay their employees in full for the first three days of service. After the third day, the court will pay the juror a daily stipend of $50 and it is the employer's option to pay the difference between jury pay and regular pay (M.G.L. c.234A§41,48,49).

Persons who are subpoenaed to appear in criminal cases because they are victims of or witnesses to a crime may not be discharged from employment. Although no law directly addresses whether or not they should be paid for this time, other state statutes provide guidance. They state that individuals should not be penalized for missing work in order to serve as a witness, meaning they should not be docked in pay or otherwise disciplined (M.G.L. c. 268§14A, §14B).

On the other hand, employees are sometimes subpoenaed to testify at hearings, trials, or other civil proceedings. If there is no relation to the employee's job, employers may require those employees to take personal or vacation time or may grant unpaid time off.

Massachusetts Maternity Leave Act (MMLA)
Employers of six or more are required to give eight weeks of unpaid maternity leave to eligible full-time female employees for the purpose of childbirth or for adopting a child under 18 years of age (or under 23 if the child is mentally or physically disabled). MCAD's maternity leave guidelines state that a female employee is entitled to up to 8 weeks of leave for each birth or adoption so a mother of twins would be entitled to 16 weeks and so forth. Employee's may require a two-week notice of the date of an employee's departure, as well as a statement of her intention to return to work. This leave may be paid or unpaid depending on company policy. The individual must not lose benefits and must be returned to her same or similar position. According to MCAD guidelines, the employee cannot be required to use vacation or paid leave concurrently with the maternity leave but may voluntarily choose to do so. Massachusetts law requires that this law be posted in the workplace (M.G.L.c.149§105D). In cases where the FMLA also applies, the FMLA and MMLA leaves may run concurrently.

Massachusetts Small Necessities Leave Act (SNLA)
Employers of 50 or more employees must provide eligible employees with 24 hours of unpaid leave per year to participate in school activities directly related to the educational advancement of the employee's child or to accompany the employee's child to routine medical or dental appointments. The law also covers employees who need to accompany an elderly relative to routine medical, dental, or other appointments related to professional care of the relative. An "elderly relative" is defined as an individual 60 years of age or older who is related to the employee by blood or marriage. This leave is in addition to any leave the employee may have under the FMLA (M.G.L. c. 149§52D).

To be eligible, employees must have worked for the employer for 12 months and must have worked 1,250 hours in the year immediately preceding the leave. Employees may be required to give 7 days' notice of the leave if the need is foreseeable. Notice "as soon as practicable" is to be provided in all other cases. Employers may require an employee to substitute any accrued paid vacation, personal, medical, or sick leave for leave under this law.

Military Service Leave
The federal Uniformed Services Employment and Reemployment Rights Act (USERRA) protects the rights of all those who served in a branch of the military and reservists to return to their jobs after completing their time in voluntary or involuntary service. The protections of the Act apply to employees who are absent from their jobs due to military service for up to five years. Employees who are called up for 31 days or more of active duty must be offered the right to the continuation of health care benefits similar to provisions under COBRA. USERRA does not limit the frequency of leaves unless they cause undue hardship to the company. In addition, these employees have the right to the same or similar position if they re-apply within certain time periods from their release from military service or training.

In March 2005, the U.S. Department of Labor (DOL) announced that all employers must display a poster informing employees of their rights under the USERRA. The poster is available form the DOL Web site at www.dol.gov/vets. Under Massachusetts law, an employer, if requested, must allow a regular employee up to 17 days in a calendar year for military leave. The leave may be paid or unpaid depending on company policy, but the leave must be given with reemployment rights for those on military reserve leave and with no loss of seniority (M.G.L. c. 149§52A).

Voting Leave
Employees are entitled to vote in any federal, state, or municipal election. All polling places in Massachusetts must be open a minimum of 13 hours - 7:00 a.m. to 8:00 p.m. - which eliminates most requests for leave to vote (M.G.L. c. 149§178). To vote during the two hours after the polls open, employees must request an unpaid leave of absence from their employer for time off during such period.

VI. SAFETY

Licenses
Many operations commonly performed in facilities require state licensing of individual operators. For instance, employees engaged in driving forklifts or operating other hoisting equipment, supervising or operating wastewater treatment plants, or operating steam boiler equipment may need to be individually licensed by the Department of Environmental Protection or the Department of Public Safety. Employers should research these and other laws and regulations to make sure their operations are in compliance with these permitting requirements.

Occupational Safety and Health Act (OSHA)
Employers have a general duty to provide a place of employment that is free from recognized health and safety hazards. The federal Occupational Safety and Health Administration (OSHA) conducts random audits, investigates complaints, and issues fines and citations for violations of its laws. OSHA has specific recordkeeping requirements that employers must adhere to by filling out Form 300, Log of Work-Related Injuries and Illnesses; Form 300A, Summary of Work-Related Injuries and Illnesses; and Form 301, Injuries and Illnesses Incident Report.

A company that had 10 or fewer employees at all times during the last calendar year is not obligated to keep OSHA injury and illness records unless instructed to do so by OSHA. Employers with 11 or more employees are required to maintain the required records at each establishment, and to post them annually. All employers covered by the OSHA Act must report to OSHA any workplace incident that results in a fatality or the hospitalization of 3 or more employees.

A recordable injury must be reported on OSHA Form 301 as soon as possible but no later than 7 working days after the employer receives the information. Recordable injuries include deaths, loss of consciousness, days away from work, restricted work activity or job transfer, or medical treatment beyond first aid. An employer must also report work-related injuries and illnesses that are significant or meet OSHA specific criteria. Those include any significant work-related injury or illness diagnosed by a health care professional. Other recordable cases include cancer, chronic irreversible disease, a fractured or cracked bone or a punctured ear drum.

Even if no reportable injuries or illnesses occurred, the employer must still complete and post the form. The OSHA 300 Log and Summary requires all employers to maintain records of work-related injuries and illnesses. The new Form 300A Summary must be posted from February 1 through April 30 of each year.

All employers must have an OSHA poster displayed in the workplace. While OSHA recently produced a plain language poster, employers may continue to display the old poster to be in compliance with the requirement. Please visit the OSHA Web site at www.osha.gov for a copy of this poster.

State laws pertaining to employee safety and health are contained in numerous sections of Mass. Gen. Laws c.149. Many of them are preempted by federal laws and regulations developed under the Occupational Safety and Health Act of 1970, although they still remain on the books.

VII. WORKERS COMPENSATION
For more detailed information, please refer to A.I.M.'s Reference Guide, Workers Compensation.

Nearly all Massachusetts employers are required to obtain workers compensation insurance. The insurance protects the employer from civil lawsuits from injured employees while covering injured employees for lost wages and medical expenses. Any employer covered by the workers compensation law must display a poster showing proof that they have insurance. Any employer without insurance may be issued a stop-work order shutting down the business and be subject to a fine of $100 per day until coverage is obtained. The law also allows corporate officers to elect not to have workers compensation coverage and to allow sole proprietors and the partners of a partnership to elect to obtain coverage.

When an employee's injury or illness "arises out of or in the course of employment," and the employee is out of work for 5 days or more, the employer must file a First Report of Injury (Form 101) with the insurer, injured employee, and Department of Industrial Accidents (DIA). The employer may file the Form 101 online by accessing the DIA Web site at www.mass.gov/dia. The insurer must then investigate the report to determine if it is a work-related injury. If so, the insurer will pay benefits.

If the insurer denies that the illness or injury is work related, the employee may file a claim with the DIA to have it adjudicated. Employers should work with their insurer to defend against this claim for benefits. If it is determined that the employee has a compensable injury or illness, he or she may collect temporary total and/or partial benefits for a defined period of time. Alternatively, the insurer may offer to settle the claim by making a one-time payment (lump sum settlement) in return for an agreement to release future claims arising from the same injury. For experience-rated insureds ($5,500 or more in annual workers compensation premiums), the insurer must obtain the policyholder's approval before agreeing to a lump sum settlement if the settlement will affect the employers experience rating (M.G.L. c. 152).

It is illegal to terminate an employee for filing a workers compensation claim. If the employee receives workers compensation benefits, he or she may also have rights and benefits under the FMLA, ADA, and/or COBRA. For more information please refer to A.I.M.'s three Reference Guides, Leaves of Absence, Disability Laws and Workers Compensation.

Safety Grant Program
Every fiscal year, the Department of Industrial Accidents (DIA) awards numerous safety grants to Massachusetts employers. This grant program provides monies for workplace safety training aimed at making work safer for current and future workers in organizations such as service companies, manufacturing, health care and trade groups. To learn more about the program, please visit the DIA Web site www.mass.gov/dia.

VII. UNEMPLOYMENT INSURANCE

Unemployment Insurance Benefits
An employee who loses a job through no fault of his/her own, including leaving a job due to conditions caused by domestic violence or sexual harassment, is afforded certain levels of wage replacement for a period of up to 30 weeks or less if the individual finds other work. The administrating agency, the Division of Unemployment Assistance (D.U.A.), determines benefit eligibility. Claimants are subject to a one-week waiting period. The current maximum benefit is $528 per week. A claimant may also receive a dependency allowance of $25 per week per dependent up to one-half of the employee's weekly benefit. The D.U.A. has an administrative process to determine a claimant's eligibility for benefits if it is in dispute.

Employers are required to distribute D.U.A. Form 590-A, "How To File For Unemployment Insurance Benefits," to all separated employees as soon as practicable, but within a period not to exceed 30 days from the last day that compensable work was performed. According to the DUA, separated employees include those employees who have been fired for cause, voluntary quits and layoffs due to lack of work. The information may be delivered in person or mailed to the employee's last known address. Employees who do not receive the information and who are otherwise eligible to receive unemployment insurance benefits will have their claims backdated to the time of initial eligibility.

Employers must file the Quarterly Contribution Report, Form 0001. An employer who has filed all required reports and has paid all contributions due may elect to make voluntary contributions. Upon timely payment of a voluntary contribution, the contribution is credited to the employer's account balance and the employer receives a recomputation of its contribution rate for that calendar year. Employers are also required to display a poster, "information on Unemployment Insurance Benefits," prepared by the D.U.A., informing workers about the filing requirements necessary to collect Unemployment Insurance benefits. Failure to comply with this posting requirement may result in a warning for the first offense, fines of $100 and $250 for the second and third offenses, and $500 for more than three violations. Please visit the D.U.A. Website at www.detma.org or contact the D.U.A. at 617-626-5400 for posters and forms.

Health Insurance for the Unemployed
All employers of 6 or more are required to pay an annual surcharge of .12 percent on a wage base of $14,000 up to a maximum of $16.80 per employee. This payroll tax goes into a fund to provide funding for health care coverage for unemployed persons receiving unemployment benefits under the state's unemployment insurance system (M.G.L. c. 151A§14G).

The program has two coverage methods. The premium assistance plan provides qualified Unemployment Insurance claimants a monthly subsidy toward their COBRA payments. The direct coverage plan allows the employee to receive a comprehensive benefits package including doctor visits, hospital care, and treatment for mental health and substance abuse.

Lockouts and Strikes
Unemployment benefits may be available to employees involved in lockout situations. The law does not deny benefits to any employee unless the employer can prove that the lockout is in response to acts of repeated and substantial damage or repeated threats of damage with the express or implied approval of the officers of the bargaining unit. Strikers can receive unemployment insurance if it can be shown that it was an economic strike or resulted from an unfair labor practice (M.G.L. c. 151A§25).

Severance Pay/Termination Agreements
There are no laws requiring payment of severance benefits. However, severance benefits granted for past service count as earnings for purposes of unemployment benefits. On the other hand, payment granted to an employee in exchange for a release of legal claims does not disqualify that person from unemployment benefits (M.G.L. c. 151A§1(r)(3)).

The Older Workers Benefit Protection Act of 1990 (OWBPA) requires that releases of legal claims for workers 40 years old and older be knowing and voluntary; part of a written, clearly understood agreement that specifically lists ADEA rights or claims; excludes a waiver of claims and rights arising after date of the waiver; be for consideration such as additional pay and/or benefits; advise the individual to consult an attorney; provide 21 days for the individual to consider the waiver (45 days if part of a group offer); and allow the individual 7 days to revoke the waiver. When group layoffs or exit incentive programs are involved, the employee must be given information on the class of employees covered; eligibility factors; time limits applicable; information about job titles and ages of individuals eligible or selected; and ages of individuals in same job classification or unit not selected.

Worksharing
The Division of Career Services (D.C.S.) Worksharing Program provides an alternative to layoffs. This allows employees - an entire company, a complete department, or even a small unit within the company - to share reduced work hours while also collecting unemployment insurance benefits to supplement their reduced wages. Employees may collect a percentage of their unemployment insurance benefits to offset the percentage of the reduction in their wages and hours. The decrease in the normal weekly hours must be shared equally by all workers in the unit(s) defined by the employer. The reduction in hours may range from 10 percent to 60 percent. To be eligible an employer must have a positive trust fund balance at the time the worksharing application is approved; or if an employer has a negative balance, the employer must reimburse the U.I. Trust Fund on a dollar for dollar basis (M.G.L. c. 151A§29D).

IX. BENEFIT CONTINUATION
For more detailed information, please refer to A.I.M.'s Reference Guide, COBRA: Federal and State Requirements for Group Health Insurance Continuation.

Health Insurance
Virtually every Massachusetts employer that offers its employees health insurance is required, under either federal or state law, to offer health insurance continuation rights to eligible employees and dependents, at group rates, but at the employee's and/or dependent's expense. Federal COBRA covers all employers with 20 or more employees. Massachusetts "Mini-COBRA" applies to all employers with 2 to19 employees.

Federal Law
Under COBRA, employers of 20 or more employees must offer continuation of benefits to employees and covered dependents - called "qualified beneficiaries" - who would otherwise lose coverage due to certain "qualifying events." Qualifying events for employees include the termination of employment and a reduction in the employee's hours below the eligibility threshold for health insurance. Qualifying events for dependents include death of the employee, divorce or legal separation of the employee or a loss of dependent status as defined by the plan, and allow benefits continuation of up to 36 months. An 18-month period may be extended up to an additional 11 months in certain cases of disability or up to an additional 18 months in cases of multiple qualifying events.

Continuation must be offered for all coverage in effect at the time of the qualifying event, including medical, dental, vision, flexible spending accounts (health care reimbursement only), etc. Each qualified beneficiary has individual election rights and COBRA participants have exactly the same rights as active employees to add or drop dependents, switch plans, etc.

COBRA places stringent timetables, notice requirements and other obligations on both employers and employees. The Department of Labor released clarified COBRA notice requirements that took effect on January 1, 2005. Employers are now required to give their employees COBRA-related notices: 1) when the employee (and spouse, if applicable) becomes covered under the health insurance plan, 2) when a qualifying event occurs, 3) when COBRA coverage terminates and 4) for unavailability of coverage. For copies of the new notices and any questions regarding the notices, please go to the DOL Web site at www.dol.gov/ebsa. A.I.M. members are encouraged to utilize the HR Hotline for clarification of these requirements as well as additional information.

State Law - "Mini-COBRA"
The Massachusetts "Mini-COBRA" law applies to employers of between 2 and 19 employees. It differs from COBRA in that it does not apply to fully self-insured plans; it applies to medical coverage only - not dental, vision, etc.; its extension of the continuation of coverage for disability applies only to the employee. Otherwise, the law generally mirrors COBRA provisions (M.G.L. c. 176J§9).

State Law - Coverage for Divorced or Legally Separated Spouses
Plans covered by Massachusetts Insurance Law, including Blue Cross/Blue Shield, health maintenance organizations and preferred provider organizations must continue health and dental insurance benefits for spouses and ex-spouses of employees under an employer's group plan(s). This is true even if the divorce or legal separation decree is silent on the issue. On the other hand, if the decree specifies that the spouse has no right to continuation, the decree will supersede the law. It is very important that employers understand this law since it is often much more generous than COBRA. The employee and/or spouse can be required to pay the cost of coverage and eligibility generally ends on the date specified in a decree or upon the remarriage of the spouse. For information on additional provisions, please refer to A.I.M's Reference Guide on COBRA.

State Law - Life Insurance
If an employee has been insured under a life insurance policy for 5 years or more immediately preceding termination, the employee shall continue to be insured for a period of 31 days. Conversion rights are also available (M.G.L. c. 175§134).

X. PLANT CLOSINGS

Federal Law
Employers of 100 or more are required to give a 60-day advance notice before closing a facility or "operating unit" where 50 or more employees would lose their jobs. In the case of a mass layoff, employers are also required to give a 60-day advance notice where 50 or more employees (constituting 33 percent or more of the workforce) would be laid-off. Failure to give these notices will result in monetary penalties and could result in mandatory payment of severance to affected workers under the Worker Adjustment & Retraining Notification (WARN) Act. For information on additional provisions, please refer to A.I.M.'s Reference Guide on Plant Closings and Mass Layoffs.

State Law
The Massachusetts Plant Closing law contains a compulsory 90 day extension for health insurance benefits by the employer and certain unemployment benefits in the event of the plant closing and encourages voluntary notice to employees of an impending plant closing. This Massachusetts law covers a company that employs over 50 employees and is triggered when 90 percent of its employees over a six-month period, would be terminated due to the plant closing (M.G.L. c. 151A§71A).

The content of this document is provided for educational and informational purposes only and is not intended and should not be construed as legal advice or opinion. Legal counsel should be consulted for legal planning and advice.