Massachusetts is a dangerous state in which to be an employer, and it’s getting more dangerous all the time, Samantha Halem told about a dozen employers from both non-profit and for-profit businesses, gathered at the Harbor View Hotel in Edgartown. Ms. Halem and Erik Hammarlund hosted a May 4 seminar for employers on Martha’s Vineyard, sponsored by the Martha’s Vineyard Chamber of Commerce.
Ms. Halem works for the Marshall Law Group, a firm that specializes in defending businesses against lawsuits by their employees, and in counseling them how to avoid such problems. Mr. Hammarlund’s law office provides some of the same services, but also sometimes represents employees. They presented their program in the morning and repeated in the afternoon, when about 16 attended.
Ms. Halem, whose firm does business on the Vineyard, said that state and federal regulators are cracking down on violations of workman’s compensation coverage, unemployment benefits, and the new requirement to offer health insurance coverage. On the Vineyard, she said, employers have been slow to keep up with changes in the laws.
Mr. Hammarlund commented that hard economic times have greatly increased the frequency with which employees sue their bosses. Angry employees, he said, are not just trying to fix problems but are in it for “all I can get.”
One participant told The Times at the end of the seminar, “I learned that I’m probably breaking a lot of laws.” She was not alone.
Ms. Halem told the group that workers are often misclassified as management rather than as hourly employees, often to avoid paying them overtime. But the rules for defining management are strict. A secretary, for example, cannot be considered management. Non-management workers are due overtime pay, even if they receive a salary, and a lawsuit might result in triple damages for overtime, plus lawyers’ fees, which can be $300 an hour and up. “The attorneys are not looking for a fair settlement,” Ms. Halem told the group. “They are looking to make money.”
Many Vineyard businesses, particularly in construction and landscaping, call their employees “independent contractors,” and many employees prefer this designation, as there are some tax benefits. But the law says a worker who does the usual work of the business is not an independent contractor, but an employee, according to Ms. Halem. The test of a true “independent contractor” is very hard to meet, she explained. They must work free of control and direction, and do work outside the usual course of business of the employer. The IRS has recently been cracking down on workers who receive W2 and 1099 tax forms from the same employer.
Ms. Halem told the gathering, “It’s safest to assume all workers are hourly employees.”
The minimum wage in Massachusetts is $8 an hour. Under Massachusetts law, certain workers are exempt from the minimum wage law (fishermen, restaurant and hotel workers, and some others). However, these workers are not exempt under federal law, and in this case federal law trumps state law. It is true that persons who receive tips may be hired at a lower hourly rate, but there are strict rules. The employer must collect and account for the tips, without charging a processing fee, and be able to prove that the employee is earning at least the minimum wage when tips are included. There are also rules about which employees may and may not share in pooled tips. (Maitre Ds, for example, may not.)
There are strict regulations, often violated on Martha’s Vineyard, about the employment of minors. All workers aged 14 to 16 must get working papers from the superintendent of schools, and there are rules about their hours and the kinds of work they may do. (For example, with some exceptions for family members, persons under 18 may not pump gas, which the law considers a dangerous job.)
Of particular interest to the non-profits in the room, was the news that volunteers may have to be paid minimum wage if they do work a paid employee does, according to Ms. Halem and Mr. Hammarlund.
It is against discrimination laws to ask a prospective employee of what country he or she is a citizen. However, Ms. Halem advised that all employees be required to fill out an “I-9 form,” which asks for proof that the worker can legally work in this country. Mr. Hammarlund added that hiring an illegal worker may result in serious penalties, but asking only certain workers (and not others) to fill out an I-9 is discrimination and also risks lawsuits.
In the hour and a half, the speakers also touched on unemployment insurance, health care, workman’s compensation, discrimination, accommodation of disabilities, personnel files, hiring and firing policies, contracts, harassment, breaks, vacation pay, and jury duty, military, maternity, and family leaves.
The human resources audit
The advice of the speakers was that employers should conduct a human resources audit to ensure that the firm’s employment practices are consistent, fair, and legal. This was not a surprising conclusion from lawyers whose business it is to do such audits. However, the information and the reactions of the attendees suggested that such help might well be worth paying for.
The Marshall Law Group advises that a human resources audit should cover the following topics:
New hire procedures
Wages and benefits
A complete outline of the Marshall Law Group human resources audit is available at mvtimes.com.
In four to six weeks, Mr. Hammarlund will conduct a seminar for workers about the same legal issues from the employee’s point of view.