Checking the Rearview

By Erica E. Flores, Esq. and John S. Gannon, Esq.

The world of labor and employment law is constantly in flux. As attorneys who practice in this area, our business is to learn and help our clients solve problems in this increasingly complex environment.

So when we reflect on the past year, we ask ourselves how the law has changed for our clients, what new challenges were introduced, and what new guidance we can offer to help businesses navigate these ever-changing waters.

With that in mind, we bring you a summary of last year’s most significant employment-law changes for Massachusetts employers.

Paid Family and Medical Leave Insurance Program

If there is one takeaway from 2018, it is that Paid Family and Medical Leave (PFML) will be a game changer for businesses across the Commonwealth. The new program, which will require tax contributions from employers starting in July 2019, will allow employees to take considerable paid time off — up to 26 weeks per year in the aggregate — in connection with their own medical condition or to care for family members who are suffering from a serious health condition.

Paid family leave is also available to bond with an employee’s newborn or newly adopted child. Employees can begin claiming PFML benefits in January 2021. Employees will be able to collect weekly wage replacement benefits that will vary depending on their average weekly wage. The maximum weekly benefit amount is currently capped at $850 per week, but will be adjusted annually.

“A lot has changed for employers over the past year. Business should be reviewing their practices, policies, and employment-related documents now to be sure they are in compliance with these new laws and regulations.”

Businesses will face substantial new burdens under the new law. In addition to planning for more frequent employee absences, businesses are required to fund the program through a new payroll tax. Employers will have the option to pass a portion of this tax contribution to employees, and smaller employers (fewer than 25 employees) are not responsible for contributing the employer’s share of the tax. A visual breakdown of how the tax will work can be found at www.mass.gov/info-details/family-and-medical-leave-contribution-rates-for-employers. We suspect that this program will be most burdensome for small businesses, which are not well-equipped for extended employee absences.

For those wondering where this significant new legislation came from, the genesis was a bill known as the grand bargain that was passed by the Massachusetts Legislature in June 2018. The bill not only creates the Paid Family and Medical Leave program, but also increases the minimum wage every year for the next five years, gradually eliminates mandatory overtime for retail employees who work on Sundays, and establishes an annual sales-tax holiday weekend.

Non-compete Reform

Also this year, the Massachusetts Legislature passed comprehensive non-compete reform. The law substantially narrows the circumstances under which employers can enter into non-competition agreements with employees, limits all such agreements to a maximum term of one year, and requires that non-competition agreements entered into with existing employees be supported by consideration beyond continued employment. The law also mandates that courts apply certain presumptions that have the effect of narrowing the scope of services and geographic territories employers can seek to protect with a non-compete.

Pay Equity Becomes Law

The amended Massachusetts Pay Equity Law took effect this past July, imposing significant responsibilities on businesses to ensure equal pay to employees of different genders for “comparable” work. And the first lawsuit alleging violations of the amended law was filed just a few days later.

Most importantly, the amended statute provides a broader definition of “comparable work” and limits the acceptable reasons for paying people of different genders differently to just six — bona fide seniority, merit and productivity systems, geographic location, job-related education, training and experience, and required travel. It also prohibits employers from seeking information regarding the salary history of job applicants. Employers hoping to reduce their risk of liability under the pay-equity law can earn the protection of a statutory affirmative defense if they complete a “good faith” self-evaluation of their pay practices, but they must demonstrate “reasonable progress” toward eliminating any wage differentials in order to avoid liability completely, and the defense is only good for three years.

Pregnancy and Related Conditions Are Now Protected Classes

In April 2018, the Pregnant Workers Fairness Act became law in Massachusetts. In addition to adding pregnancy and conditions related to pregnancy (including lactation) as protected classes under the state’s anti-discrimination law, the statute also requires employers to provide reasonable accommodations for an employee’s pregnancy or conditions related to pregnancy unless doing so would pose an undue hardship to the business; prohibits employers from taking adverse action against or refusing to hire someone because she needs, requests, or uses such an accommodation; and prohibits employers from requesting documentation to support certain types of accommodations — specifically, more frequent breaks, seating, lifting restrictions, and a private, non-bathroom space to express breast milk.

As you can see, a lot has changed for employers over the past year. Business should be reviewing their practices, policies, and employment-related documents now to be sure they are in compliance with these new laws and regulations.

John S. Gannon and Erica E. Flores are attorneys with Skoler, Abbott & Presser, P.C., one of the largest law firms in New England exclusively practicing labor and employment law. Gannon specializes in employment litigation and personnel policies and practices, wage-and-hour compliance, and non-compete and trade-secrets litigation. Flores devotes much of her practice to defending employers in state and federal courts and administrative agencies. She also regularly assists her clients with day-to-day employment issues, including disciplinary matters, leave management, and compliance.