Tag Archives: minimum wage

Peabody Market forced to pay its employees unpaid wages

“BOSTON – A Peabody convenience store and its owner have been cited more than $43,000 for failing to properly pay an employee in violation of the state’s wage and hour laws and for failing to keep accurate payroll records, Attorney General Maura Healey announced today.

Ad Market Inc., d/b/a Peabody Market, and its president, Azhar Ali, have been cited more than $32,000 in restitution for failure to pay minimum wage and failure to pay proper overtime to an employee. They were also cited $6,400 in penalties, along with an additional $5,000 penalty for failure to keep accurate payroll records.

“This business repeatedly took advantage of an employee by failing to pay him the hard-earned money he was owed in exchange for providing temporary living accommodations in a broken walk-in cooler,” AG Healey said. “Our office will continue to fight on behalf of our most vulnerable workers to make sure that they do not fall victim to unfair and exploitative employment practices.”

In May 2014, the AG’s Office began its investigation of Peabody Market, following a complaint from a former employee. The office determined that, from August 2012 to March 2014, the complainant worked as a clerk handling various duties at the store. In place of the legally required minimum wage, the market provided temporary accommodations for the employee to reside inside a broken walk-in cooler at the store for the majority of time he worked there.

The investigation revealed that he frequently worked in excess of 100 hours a week, but was only sporadically compensated for this work. The AG’s investigation found that Peabody Market also failed to keep true and accurate payroll records.

This case serves as an example of the office’s focus on providing economic security to the residents of Massachusetts, particularly vulnerable workers. The AG’s Office enforces the laws regulating the payment of wages, including prevailing wage, minimum wage and overtime laws.”

Source: Massachusetts Attorney General’s Office Press Release (November 5, 2015)

Most employment situations in which there are wage and hour violations do not involve such extreme facts, such as 100 hour work weeks, and living in a broken walk-in cooler instead of receiving pay. However, this is an excellent example of a “wage theft” case that the Attorney General’s Office chose to prosecute.

It is important to note that a) Massachusetts law permits a “private right of action” for wage theft, meaning that you are free to use your own lawyer to recover money an employer has stolen from you in the form of unpaid wages, and b) the Attorney General’s Office does not have sufficient resources to pursue every single complaint it receives about unpaid wages. See our page about wage theft cases here.

Some key points about Massachusetts worker’s rights, from the AG’s website are:

Massachusetts Wage Act
You must be paid for every hour you work, even if you quit or are fired. This applies to hours worked, tips, vacation pay, holiday pay and commissions. If you voluntarily leave your job, you must be paid in full on the next regular pay day. If you are laid off or fired, you must be paid in full on the day your employment ends.

Meal Breaks
If you work at least six hours a day, you are entitled to a 30 minute break. During your break you must be relieved of all duties and allowed to leave the premises. If you voluntarily elect to give up your meal break, you must be paid for the time worked.

Tips
You may be paid $3.00 an hour if you regularly receive tips of more than $20.00 per month, and only if those tips, when added to the $3.00 per hour, equal at least $9.00 per hour. Your tips are yours to keep. No employer, manager or boss may request or accept any part of your tips.

Minimum Wage
Massachusetts’ minimum wage is $9.00 per hour.

Overtime
By law, employers are required to pay time-and-a-half if you work over 40 hours a week. For example, if you usually earn $9.00 per hour, you would be paid $13.50 per hour for each hour worked beyond 40 hours.

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Massachusetts Minimum Wage and Tipped Employees

In Massachusetts, the minimum wage for tipped employees (i.e. waitresses, bartenders) is $2.63 per hour. No matter how much a tipped employee makes in tips, they must also be paid their minimum wage. Also, if on a given shift, minimum wage pay and tips do not add up to an hourly pay rate of $8.00 per hour, the employer must make up the difference. The Massachusetts “Reporting Pay” regulation requires employers to pay an employee for a minimum of three hours of work if they are called in for any shift of four hours or more, and then sent home.  Employers must pay their employees on a weekly or biweekly schedule.

Hypothetical examples:

A. Shirley is a “bottle service” waitress  at the Coconut Grove. She is putting herself through college with the money she makes from tips. Her job is to pour alcohol at tables reserved by patrons willing to spend hundreds, and sometimes thousands of dollars a night on vastly overpriced champagne and hard liquor. She’s on her feet for five hours in heels, lugging bottles, and pushing through crowds of drunk people. Sometimes the customers are all over her, but she puts up with it to make her tuition and rent payments. On a good night, she can take home $1,500.00.  On a bad night, her table cancels, or for whatever reason, no one reserves a table, and she’s sent home.  After paying for parking, she’s minus $40.00. Over a three year period, she is sent home with zero pay 20 times.

By law, on a night when Shirley is cut, she’s entitled to the following in reporting pay, assuming a 5 hour shift:

3 * $8.00 * 24 = $576.00

If she sues the Coconut Grove, she’s entitled to:

$576.00 * 3 = $1,728.00  and her employer must pay her attorney’s fees and costs of filing suit.

B. Katrina is also a bottle service waitress at the Coconut Grove. She is only scheduled for the busiest nights, because she’s a top earner for the nightclub. She has close relationships with the high rollers patrons, so they never cancel on her. Over a three year time span (one hundred shifts a year) she makes $300,000 in tips. She is never paid her hourly tipped employee minimum wage.

By law, Katrina is entitled to:

5 * $2.63 * 300  = $3,945.00 (trebled to $11,835.00).

 Have you been affected by wage and hour law violations in your workplace? The Leonard Law Office is accepting Massachusetts wage theft cases.

  • It is illegal to retaliate against employees for bringing wage claims. 
  • Employers must pay the wronged employee’s attorneys fees in wage theft cases.
  • Triple damages are automatic; employers must pay the amount owed in wages times three. 

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Legal Discussion: Reporting Pay or the “Three Hour Rule”

Reporting Pay, or the “Three Hour Rule”

In Massachusetts, the law is clear about “reporting pay.” Reporting pay means the minimum pay that an employer must give for requiring an employee to show up for a shift of three or more hours, and then sending them home early.

Here is the law:

455 CMR 2.03

2.03: Hours Worked (1) Reporting Pay. When an employee who is scheduled to work three or more hours reports for duty at the time set by the employer, and that employee is not provided with the expected hours of work, the employee shall be paid for at least three hours on such day at no less than the basic minimum wage. 455 CMR 2.03(1) shall not apply to organizations granted status as charitable organizations under the Internal Revenue Code.

Example:

Joe is a delivery man at a flower shop.  Joe is scheduled to work a full shift (5 hours) on Valentines Day.  Due to a nationwide shortage of roses, the business is unable to fill any orders. Joe’s boss “cuts” him and sends him home after 2.5 hours on the clock.  Joe’s hourly rate is $15.00.  The flower shop must pay him this way:

  • 2.5 hours at Joe’s regular rate of 15.00/hr, which equals  $37.5, then at least the minimum wage for a half hour, which would be $4.00, resulting in a  a total of $41.50 minimum owed to Joe.

Reporting Pay image

Source: Attorney General’s publication about Massachusetts Wage and Hour Laws, .pdf (here).

There are no reported cases that I was able to find about this law. However, there is an opinion letter here and below:

07/09/2007 - Reporting Pay Provision "Three Hour Rule"
Opinion Letter
MW-2007-002
July 9, 2007
I am writing in response to your request, on behalf of your client ***, for this Office's written opinion regarding the applicability of the Massachusetts Minimum Fair Wage Law. Specifically, you have asked how 455 C.M.R. §2.03(1), the Reporting Pay requirement, applies to employees scheduled to work less than three hours. [1]
The Reporting Pay provision, also known as the "three hour rule," provides:
When an employee who is scheduled to work three or more hours reports for duty at the time set by the employer, and that employee is not provided with the expected hours of work, the employee shall be paid for at least three hours on such day at no less than the basic minimum wage. [This provision] shall not apply to organizations granted status as charitable organizations under the Internal Revenue Code.
455 C.M.R. §2.03(1). Therefore, if a for-profit employer schedules an employee for three or more hours, the employee arrives at the worksite on time, and the employer does not provide the expected hours, the employee must be paid for at least three hours at no less than the minimum wage ($7.50 per hour). Of course, for any actual time worked, the employee must be paid his/her actual wage. For example, if an employee is told that a meeting will take four hours, and the employee is sent home after two hours, the employee must be paid for two hours at his/her regular rate of pay, and at least minimum wage for the third hour. [2]
Alternatively, if an employee is, in good faith, scheduled for less than three hours, the employer may pay the employee for only the hours worked. For example, if an employee is scheduled for a two-hour meeting and she/he works these two hours, the "three hour rule" is inapplicable, and the employer may pay the employee for only the hours worked.
I hope this information has been helpful. If you have any further questions, please feel free to contact me.
Sincerely,
Lisa C. Price
Deputy General Counsel
[1] As you know, most employers are also subject to the federal minimum wage and hour law, found in the Fair Labor Standards Act (FLSA), and regulations promulgated thereunder. For information about applicable federal wage and hour laws, you should contact the U.S. Department of Labor.
[2] Of course, if the meeting causes a non-exempt employee's hours to exceed 40 hours in the workweek, the employee must be paid time and one-half pay for all hours actually worked in excess of 40 hours.
***=Names have been Omitted

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