Tag Archives: reporting pay

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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