How do you calculate overtime pay in Massachusetts?

Calculating overtime pay in Massachusetts is critical in ensuring employees receive fair compensation for additional hours worked. Massachusetts imposes both federal guidelines as well as its own specific state laws that employers and employees must follow.

This guide outlines the rules and steps necessary to calculate overtime pay in Massachusetts accurately.

This Article Covers:

Understanding Overtime in Massachusetts
Overtime for Hourly Rate, Two or More Hourly Rates, and Salaried Employees in Massachusetts
Overtime for Complex Pay Structures in Massachusetts
Additional Considerations for Massachusetts Overtime

Understanding Overtime Pay in Massachusetts

Which Overtime Laws Apply in Massachusetts?

In Massachusetts, overtime laws are governed by both the federal Fair Labor Standards Act (FLSA) and local regulations regarding overtime wages as outlined in Chapter 151: Minimum Fair Wages of the Massachusetts General Laws.

Employers must comply with both sets of regulations, or they could face civil or criminal enforcement actions. The penalties could include payment of back wages, bans from public contracts, fines of up to $50,000, or up to two years prison time per violation.

When state and federal laws differ, the Supremacy Clause states that federal law takes precedence.

There are, however, no applicable laws requiring daily overtime, meaning working more than eight hours in a day doesn’t qualify unless weekly hours exceed 40. Overtime pay applies only to hours worked beyond 40 in a single workweek.

How are Overtime Laws in Massachusetts Different from Federal laws?

Overtime laws in Massachusetts differ from federal laws in some instances, including:

  • Sunday & Holiday Pay: As of January 1, 2023, businesses do not have to pay higher wages on Sundays and federal holidays.
  • Stricter Employee Classification: Under Massachusetts law, only employees – not independent contractors – are eligible for overtime protections. Massachusetts has strict rules under Employee Classification Requirements when determining whether a worker is classed as an independent contractor or an employee.

What is the Regular Rate of Pay in Massachusetts?

The “regular rate of pay” in Massachusetts refers to the wage or salary an employee earns for each hour worked under 40 hours. This includes any remuneration for employment, except for specific exclusions such as: commissions, drawing accounts, bonuses, or other incentive pay.

This rate must meet the minimum wage set by the state, which is $15 per hour in Massachusetts.

This minimum wage requirement, however, does not apply to certain groups, such as agricultural workers (who are subject to a minimum wage of $8.00 per hour), members of religious orders, employees undergoing training in specific educational, nonprofit, religious organizations, or outside salespeople.

How Do You Define a Workweek in Massachusetts?

In Massachusetts, a workweek is a fixed, seven-day period that starts on any day chosen by the employer, following the FLSA definition. The start date must remain consistent unless permanently changed for legitimate business reasons. Employers are not allowed to manipulate the workweek to avoid overtime obligations.

Each workweek is considered separately for overtime calculation purposes, meaning that an employee’s hours cannot be averaged over multiple weeks to avoid paying overtime.

For example, if an employee works 30 hours in one week and 50 hours in the next, they must be paid overtime for the 10 hours worked beyond 40 in the second week.

How Much is Overtime Pay in Massachusetts?

Overtime pay in Massachusetts is calculated at one and a half (1.5) times an employee’s regular hourly rate for each hour worked beyond 40 hours in a single workweek.

For example, if an employee earns $20 per hour, their overtime pay rate must be a minimum of $30 per hour. If they work 45 hours a week, they would receive overtime pay for the five extra hours at $30 per hour, totaling $150 in overtime pay.

Who is Entitled to Overtime Pay in Massachusetts?

Employees in Massachusetts are entitled for overtime pay unless they meet specific exemption criteria outlined by the FLSA and Chapter 151, Section 1A of the Massachusetts General Laws.

Workers entitled to overtime pay include:

  • Most hourly employees
  • Salaried employees who perform non-exempt duties. 
  • Domestic workers, including housekeepers, nannies, and caregivers.
  • “Blue collar workers”, such as manual workers in sectors such as construction, manufacturing, and maintenance.
  • First responders, such as police officers, firefighters, paramedics, and other emergency personnel.

Who is Exempt from Overtime Pay in Massachusetts?

Under federal law, certain occupations are exempt from receiving overtime pay in Massachusetts:

  • Executive Employees: Salaried employees who are paid at least $684+/week, primarily manage a business or a department, manage more than two employees, and have authority or input over hiring/firing staff.
  • Administrative Employee: Salaried employees who are paid at least $684+/week, perform office/non-manual work related to management, and exercise discretion and judgment on significant matters.
  • Professional Employee (Learned): Salaried employees who are paid at least $684+/week, perform work requiring advanced knowledge in a specialized field.
  • Professional Employee (Creative): Salaried employees who are paid at least $684+/week, perform work requiring originality or talent in a recognized artistic or creative field.
  • Computer Employee: Salaried employee who is paid at least $684+/week, and works in systems analysis, software engineering, or similar computer-related roles, with duties such as designing, testing, or modifying computer systems.
  • Outside Sales Employee: Employees whose primary duty is making sales or obtaining contracts, and they regularly work away from the employer’s place of business.
  • Highly Compensated Employees: Employees earning $107,432+ annually, including at least $684 per week on a salary or fee basis, who regularly perform at least one duty of an exempt executive, administrative, or professional employee.

Furthermore, Chapter 151, Section 1A of  Massachusetts General Laws, stipulates further exempt roles as well as those mandated by the FLSA. These are:

  • Janitor or caretaker of residential property, paid more than $30/week along with accommodation
  • Golf caddy, newsboy, or child actor/performer
  • Learner, apprentice, or handicapped person under a special license
  • Seaman, or fisherman employed in catching any fish, shellfish or other aquatic animal or vegetable life
  • Switchboard operator in a public telephone exchange
  • Truck drivers/helpers, covered under Interstate Commerce Commission regulations or subject to the Interstate Commerce Act or Railway Labor Act
  • Seasonal business employees working in a business operating 120 days or fewer per year, as determined by the commissioner
  • Employee of a restaurant, hotel, motel, motor court or similar establishment
  • Employee in a gasoline station, or a garageman (other than a parking lot attendant)
  • Employee in a hospital, sanitorium, convalescent or nursing home, infirmary, rest home or charitable home for the aged
  • Employee of a non-profit school or college, or a summer camp operated by a non-profit charitable corporation
  • Farm or agricultural laborer
  • Amusement park employees working in a park operating 150 days or fewer per year with permanent attractions

Wages for Tipped Employees in Massachusetts

A service rate of $6.75 per hour applies to tipped employees who provide services to customers and earn more than $20 in tips each month. Where the service rate applied, workers hourly rate plus tips must add up to the minimum wage rate for every shift.

Overtime for Hourly and Salaried Employees in Massachusetts

How Do You Calculate Overtime for Hourly Employees in Massachusetts?

To understand overtime calculations for hourly employees in Massachusetts, take the following example. 

John is an hourly employee and earns $15.00 per hour. He has worked 45 hours in a specific week and is eligible to earn overtime pay. To determine his overtime wages, we can use the following steps:

    • Determine the employee’s regular hourly rate

    For hourly employees, their base hourly wage serves as their regular rate. In the case of John, this is $15.00.
    • Calculate the employee’s overtime rate

    To get the overtime rate, multiply the regular hourly rate by 1.5. John’s overtime rate will then be: ($15.00 x 1.5 = $22.50 per overtime hour).
    • Identify overtime hours

    Since John worked 45 hours during the week, he would have worked 5 overtime hours (45 hours – 40 hours = 5 hours).
    • Calculate overtime pay

    Multiply the overtime hours worked by the overtime rate. From the example, John’s total overtime pay would be: (5 hours x $22.50 = $112.5)

    How Do You Calculate Overtime for Salaried Employees in Massachusetts?

    Salaried employees receive a fixed pay over a set period, such as weekly, biweekly, or monthly, regardless of the hours worked. Despite this pay arrangement, they may still be entitled to overtime pay if they are classified as nonexempt under federal or state law.

    To understand how to calculate overtime for salaried employees in Massachusetts, let’s take a look at an example.

    Salaried employee, John, earns $1,000 per week for a 32 hour workweek and he worked 42 hours during the current workweek. To calculate overtime pay, follow these steps:

    • Determine the employee’s regular hourly rate

     To get John’s regular hourly rate, divide his weekly salary by the number of hours worked in a workweek. This would make his hourly rate: ($1,000 ÷ 32 hours = $31.25 per hour ).
    • Calculate the employee’s overtime rate

    Multiply the regular hourly rate by 1.5. John’s overtime rate would be: ($31.25 × 1.5 = $46.88 per overtime hour)
    • Identify overtime hours

    Count the total number of hours worked beyond 40 in a workweek. If John worked 42 hours, then he worked 2 overtime hours.
    • Calculate overtime pay

    Multiply the overtime hours worked by the overtime rate. John’s overtime pay would be: (2 overtime hours × $46.88 = $93.76)

    Overtime for Complex Pay Structures in Massachusetts

    How Do You Calculate Overtime Pay for Commission Only and Piece Work Employees?

    Commission only pay refers to a compensation structure where employees are paid based on the sales or transactions they complete. Instead of receiving a fixed hourly wage or salary, the worker earns a percentage of the sales or deals they complete.

    Piece work refers to a pay structure where employees are compensated based on the amount of work they produce, such as the number of items they assemble or complete.

    In Massachusetts, both commission only and piece work earnings are excluded from calculating the regular rate of pay for overtime purposes. 

    However, they are still entitled to overtime pay, and the regular rate used to calculate overtime must be at least the state minimum wage ($15.00 per hour). This means that for any hours worked over 40 in a workweek, the employee must be paid at least $22.50 per hour for overtime hours ($15.00 x 1.5 = $22.50 per hour).

    For example, if an employee earned $1,000 in commissions or piece work for a 50 hour workweek, they must still be paid an overtime rate of $22.50 (1.5 x minimum wage), for any overtime hours over 40 hours. The employee would therefore be entitled to $225 in overtime pay (10 hours x $22.50), giving a total weeks pay of $1,225 for the 50 hours worked.

    How Do You Calculate Overtime for Hourly Employees with Commissions or Bonuses in Massachusetts?

    Commissions, bonuses, and other incentive pay are excluded from the regular rate calculation in Massachusetts.

    For example, if an employee earns $600 in base wages and $200 in commissions or bonuses in a workweek, their regular rate is calculated based only on the base wages ($600 ÷ 40 = $15 per hour). The commissions and bonuses are not factored into this calculation. 

    For overtime, the employee would earn 1.5 times the regular rate, so in this case, the overtime rate would be $22.50 per hour for any hours worked over 40 hours.

    How Do You Calculate Overtime with Multiple Pay Rates in Massachusetts?

    In Massachusetts, when an employee works at multiple pay rates during a workweek, the overtime rate is based on the weighted average of the pay rates.

    For example, an employee worked 30 hours at $20 per hour and 10 hours at $40 per hour. To calculate their overtime pay, you can follow the following steps:

    • Determine total earnings

    Calculate the total earnings for each pay rate within the workweek. In the example, the total earnings would be

    Total Earnings = ($30 × 20 hours) + ($40 x 10 hours)

    = ($600 + $400)

    = $1000
    • Calculate the weighted average rate

    To find the regular rate of pay for overtime calculations, compute the weighted average hourly rate. This is done by dividing the total earnings by the total hours worked. In the example, the total earnings are $1,000, and the total hours worked are 40.

    The weighted average rate would be: ($100 ÷ 40 hours = $25 per hour).
    • Calculate the overtime rate

    Multiply the weighted average by 1.5 to find the overtime rate. For the weighted average rate of $25, the overtime rate would be: ($25 × 1.5 = $37.50 per overtime hour)
    • Calculate overtime pay

    Determine the number of overtime hours worked and multiply that by the overtime rate. If an employee worked 5 hours of overtime, their overtime pay would be: (5 hours × $37.50 = $187.50).

    Additional Considerations for Massachusetts Overtime

    Are there Exceptions to the Standard Overtime Rules in Massachusetts?

    Yes, there are exceptions to the standard overtime rules in Massachusetts. Here are some key examples:

    • Alternative workweek schedules: Massachusetts allows businesses to implement alternative workweek schedules, where employees can work up to 10 hours per day without earning daily overtime pay, provided specific conditions are met. Employees will still be entitled to overtime pay for hours worked beyond the agreed-upon schedule or for any hours exceeding 40 hours per workweek.
    • Seasonal employees: Workers employed in seasonal industries, such as those in amusement parks or resorts, may be exempt from standard overtime rules, particularly during peak seasons. These employees can work longer hours without triggering overtime pay based on the seasonal nature of their work.
    • Healthcare workers: Certain healthcare professionals such as nurses, therapists, and other hospital staff may be exempt from overtime pay under specific conditions, depending on their job duties and classification. However, doctors and some high-level medical staff may not be exempt and are entitled to overtime pay if they don’t meet the exemption criteria.
    • Commissioned sales employees: Employees whose compensation is primarily based on commissions, such as those in retail or car sales, may be exempt from overtime pay if they meet certain salary thresholds and their primary duties are sales-related.

    Can Employers Offer Compensatory Time for Overtime in Massachusetts?

    In Massachusetts, compensatory time (comp. time) is not allowed for non-exempt employees in either the public or private sector. This means that, unlike in some states, employers cannot offer time off in place of overtime pay for employees who are entitled to overtime under state and federal law. 

    Can Employers Mandate Overtime Work in Massachusetts?

    In Massachusetts, employers can mandate overtime work as long as it is clearly communicated.

    What are the Recordkeeping Requirements for Overtime Calculation in Massachusetts?

    Employers in Massachusetts are required by both federal and state law to maintain detailed and accurate records of their employees’ work hours.

    Required recordkeeping elements are:

    • Employee Information: Employers must record basic employee details, including name, address, occupation, and pay rate.
    • Hours Worked: Employers must track the exact hours worked by employees, specifying both regular and overtime hours. This includes start and end times for each workday, as well as total hours worked per week.
    • Wages Paid: Records must also include the wages paid to employees, broken down by regular and overtime pay.
    • Additional Compensation: Employers must document any bonuses, commissions, or other additional compensation received by employees during a workweek.

    Under the FLSA, employers are required to retain these records for at least three years. 

    Employers can utilize technology solutions such as time and attendance software to maintain compliance and improve efficiency. Jibble, for example, provides an accurate method for tracking work hours, securely storing key employee data, and integrating with payroll systems, making it easier to meet regulations.

    Important Cautionary Note

    This content is provided for informational purposes only. While we make every effort to ensure the accuracy of the information presented, we cannot guarantee that it is free of errors or omissions. Users are advised to independently verify any critical information and should not solely rely on the content provided.