Payroll and Benefits Guide United States – Massachusetts

Employer

Employer Payroll Contributions

Employee

Employee Payroll Contributions

Employee

Employee Income Tax

General

The minimum wage in Massachusetts is set at 15.00 USD per hour.

Payroll Cycle

Employees are paid semi-monthly and monthly. Executives, administrators, or professional employees can be paid every 2 weeks or can opt to be paid monthly. When payments are made semi-monthly, the payment date is set by the number of working days.

If an employee works 5 or 6 days a week, they must be paid within 6 days from the end of the pay period. If an employee works a 7-day week, the employee must be paid within seven days from the end of the pay period.

13th Salary

There are no provisions in the law regarding 13th salaries.

General

In Massachusetts, the workweek is a maximum of 40 hours per week or 8 hours per day.

Overtime

Massachusetts adheres to the Fair Labor Standards Act (FLSA), and work in excess of 40 hours per week is considered overtime and paid at the rate of 150% of the regular pay. If employees are scheduled to work on weekends or rest days, no additional payment is required.

However, should an employer request an employee to work in exceptional circumstances on these days, then overtime is paid at the rate of 150% of the regular pay.

Working Week

Monday-Friday

Paid Time Off

Massachusetts does not have any state laws that govern paid leave, however, it is common for employers to decide whether to offer paid or unpaid vacation leave.  This must comply with employment law and must be stipulated in the collective bargaining agreements.

Public Holidays

There are 14 official holidays, however private employers are not required to provide either time off or overtime pay on these days.

Sick Days

It is common for an employer to follow the Family and Medical Leave Act (FMLA) which provides certain employees with up to 12 weeks of unpaid, job-protected leave per year for certain family and medical reasons (maternity leave, serious illnesses, or if the employee needs to care for a spouse or child).

FMLA eligible employees are entitled to:

• 12 working weeks of leave in any one year for a child’s birth and to care for the newborn child within one year of birth.
• Leave for the adoption or foster care of a child and care for the newly placed child within one year of placement.
• Care for the employee’s spouse, child, or parent who has a severe health condition.
• Leave in the event of a serious health condition that makes the employee unable to perform the essential functions of their job.
• Any qualifying exigency arising out of the fact that the employee’s spouse, son, daughter, or parent is a covered military member on “covered active duty.”

Or

• 26 working weeks of leave during a single one-year period to care for a covered service member with a serious injury or illness if the eligible employee is the service member’s spouse, son, daughter, parent, or next of kin (military caregiver leave).

In addition to the FMLA, employers in Massachusetts provide 1 hour of sick leave for every 30 hours worked up to a maximum of 40 hours per year. This accrual starts on the employee’s start date and can be used any time after the completion of 90 days of employment. There is an alternative lump sum payment that requires 8 hours per month for five months if an employee works 37.5 hours or more per month.

Maternity Leave

Falls under the FMLA (see Sick Leave).

In addition to the FMLA and the Pregnancy Discrimination Act, Massachusetts also has the Massachusetts Parental Leave Act. This applies to all employers with 6 or more employees and is relevant to pregnant employees and those undertaking adoption. It requires employers to provide both women and men with up to 8 weeks of unpaid parental leave for the following purposes:

• Giving birth
• Placement of a child under the age of 18 (or under the age of 23 if the child is mentally or physically disabled) for adoption

Employees are required to provide at least 2 weeks’ notice prior to leave.

Beginning July 1, 2021, paid family and medical leave benefits will become available in Massachusetts to care for any covered family member with a serious health condition.

Paternity Leave

Falls under the FMLA (see Sick Leave) and The Massachusetts Parental Leave Act (see Maternity Leave).

Parental Leave

Falls under the FMLA (see Sick Leave) and The Massachusetts Parental Leave Act (see Maternity Leave).

Other Leave

• Jury Duty: Full-time employees with 3 days of job-protected paid leave for jury duty, as a witness in a case, responding to a subpoena, or acting as a plaintiff or defendant in the courts. Employees must provide a copy of the jury summons to the employer as evidence of requirement.
• Voting Leave: Employees who are registered to vote must be allowed up to 2 hours unpaid leave to vote in a general or special election.
• In addition to the federal law USERRA, Massachusetts law provides protection against discrimination for members of U.S. armed forces, reserves, National Guard, commissioned corps of the public health service, and any other category of persons designated by the president in a time of war or emergency. Employers with more than 50 employees must provide paid leave to eligible veterans. All employers must allow employees to participate in activities such as Veteran’s Day or Memorial Day events.

Termination Process

Except in mass dismissals or as provided for in an employment contract or a collective bargaining agreement, U.S. law does not impose a formal notice period to terminate an individual employment relationship, and employment is stipulated “at will.”

This means that either the employer or the employee may end the employment relationship without giving either notice or reason, provided it is not illegal, notable discrimination on the grounds of a category protected by law, etc., and as per the Federal Worker Adjustment and Retraining Notification Act (WARN).

The employment contracts of executives and other highly skilled individuals often incorporate a “just cause termination” clause which mandates that the employer may only terminate the employee for “cause” and lists the permissible grounds. In such cases, the parties negotiate the foundations for a “just cause” termination.

Notice Period

Most employees are employed “at-will,” and either party can terminate the employment relationship without notice. In Massachusetts, payout of unused vacation time is not required by law. However, employers will generally pay an employee for unused vacation days, provided the employee gave some advanced notice of resignation. There is no official notice period, but general practice is 2 weeks.

In mass dismissal cases the Worker Adjustment and Retraining Notification Act (WARN Act) must be followed, and employers must give 60 days’ notice to impacted employees.

Severance Pay

Except when outlined in an employment contract or collective bargaining agreement, employers are not required to pay severance to terminated employees. Many employers choose to offer severance payment based on the employee’s length of employment.

Probation Period

There are no provisions in the law regarding probation or trial periods. However, it is common practice for employers to set a performance evaluation after an initially stated period of employment of 90 days.

VISA

Foreign nationals without permanent resident status or a work visa are not permitted to work in the United States. An employer seeking to hire a foreign national may file a petition with the United States Department of Homeland Security or the United States Citizenship and Immigration Services (USCIS) for an employment visa on behalf of the prospective employee.

If the petition is approved, the prospective employee must obtain a visa stamp from a United States embassy or consulate (Canadian citizens are exempt from this requirement).  To get a temporary U.S. work visa, an employer must file a petition with U.S. Citizenship and Immigration Services (USCIS). An approved petition must be part of the visa request.

The types of visas include:

• H-1B: For applicants with a college degree hired to do specialized work. The visa is valid for three years and can be extended for an additional three years. The visa is connected to the employer that filed the petition. If there is a change of employer, the new employer must repeat the process. There are 65,000 H-1B visas available each year.
• H-1B1: For applicants with a college degree from Chile and Singapore. The US government grants up to 1,400 visas to Chilean citizens and 5,400 from Singapore each year.
• H-2A:  For temporary or seasonal agriculture work. It is limited to citizens of qualified countries. Usually valid for up to 1 year and can be extended to a maximum of 3 years.
• H-2B: For temporary non-agricultural work. These visas are limited to citizens of qualified countries. Usually valid for up to 1 year and can be extended to a maximum of 3 years.
• L: For intercompany transfers (people transferred from a foreign company to a US branch of the company). The applicant must have been employed at the company for a year before the transfer and work in a managerial level position or higher with specialized knowledge.
• O: For people with extraordinary abilities in science, arts, education, business, or athletics.

The standard procedure is to obtain a short-term work visa and then apply for an immigrant visa after the employee has started working in the United States.

For those seeking employment-based immigrant visas:

• E-1: Highest priority employment for those with extraordinary ability in science, arts, education, business, and athletics
• E-2: For those with advanced degrees or exceptional ability
• E-3: For skilled workers and professionals, as well as unskilled workers
• E-4: Members of certain immigrant groups
• E-5: Immigrant investors in US companies (substantial investment)

Alternatively, an employer may sponsor a potential employee’s application for permanent resident status, referred to as a “green card” if the employee can establish that the potential employee is a multinational executive or manager transferee, has unique skills, or has been offered a job in the United States.

The employer must have been unable to recruit a U.S. worker who meets the position’s minimum requirements.

All employers are obligated to verify that all individuals they employ are authorized to work in the United States.

General

Massachusetts has a minimum flat rate state sales tax of 6.25%.