What are some illegal wage payment practices in Massachusetts?
A recent story from the LA Times on illegal wage payment practices begins by setting out the following scenario:
After a week of 10-hour days folding and packaging clothing, Jesus Francisco Moreno walked out of the factory in downtown Los Angeles on a recent Monday afternoon to collect his $450 in wages. Holding a personal check, with no required deductions, he went to a white, unmarked van parked nearby. His cash was dispensed from a small window in the back.
Vans like this, showing up outside L.A. garment factories, are another twist for bottom-rung workers. And they are another tactic for factory owners to disguise payments less than the legal minimum wage, say employees, advocates and an official for the U.S. Labor Department.
“It is a scheme to weaken a wage-theft case, and essentially escape accountability,” said Mariela Martinez, an organizer at the Garment Workers Center, an advocacy group based in Los Angeles. “When you’re paying through this check cashing system, there is no record of the hours worked.”
Some of the checks, like Moreno’s, could be cashed at banks but don’t come with deductions for disability or unemployment insurance, which are required for all employees under California law.
This matter happened in California, but similar situations have cropped up in Massachusetts. For example, in 2006, the temporary agency Labor Ready agreed to pay $250,000 to settle a case with the Massachusetts Attorney General's Office for illegally requiring their temp workers to pay to cash their own paychecks at the company's cash machines.
In my own largest temp agency case while I was an Assistant Attorney General at the Mass AG's Office, employees were paid in cash, under the minimum wage, sometimes without overtime and with deductions taken. We prosecuted, and the temp agency company and owner were indicted and convicted of wage law violations, tax evasion and insurance fraud.
What are some of the Massachusetts employment laws implicated in these cases?
Employees in Massachusetts must be provided a paystub along with their pay that sets out "the name of the employer, the name of the employee, the day, month, year, number of hours worked, and hourly rate, and the amounts of deductions or increases made for the pay period." M.G.L. c. 149, s. 148.
Massachusetts employers also must keep certain employment records including "a true and accurate record of the name, address and occupation of each employee, of the amount paid each pay period to each employee, of the hours worked each day and each week by each employee" for at least 3 years. M.G.L. c. 151, s. 15.
Moreover, no deductions in Massachusetts, other than those required or expressly allowed by law, including those allowed in strict circumstances for lodging and meals, can be made from the basic minimum wage. 454 CMR 27.05(1)-(3).
The current minimum wage in Massachusetts for most workers is $10.00. M.G.L. c. 151, s. 1-2. It is set to rise to $11.00 (again for most workers) on January 1, 2017. There are some exceptions.
As is usually the case in employment law, these questions are heavily fact-intensive, meaning small facts can change the answer. If you have questions about your situation contact me for an employment law consultation.