46 | Massachusetts Wage & Hour Peculiarities, 2025 ed. © 2025 Seyfarth Shaw LLP Drawing accounts Bonuses Other incentive pay based on sales or production269 4. Determining Whether to Apply the Massachusetts or Federal Calculation of the Regular Rate The regular rate for most hourly employees and many salaried non-exempt employees will be the same under Massachusetts and federal law. However, for some employees, such as commissioned employees, the Massachusetts regular rate will be less than the federal rate because of the additional exclusions allowed under Massachusetts law. To determine whether to apply the state or federal regular rate calculation for a specific employee, an employer must first determine whether the employee is exempt under Massachusetts law or the FLSA, or both. These exemptions are discussed in detail in Section V. If an employee is exempt under the FLSA but not Massachusetts law, apply the Massachusetts calculation of the regular rate. If the employee is exempt under Massachusetts law but not under the FLSA, apply the FLSA calculation of the regular rate. If the employee is not exempt under either the FLSA or Massachusetts law, apply the calculation most beneficial to the employee, which will generally be the FLSA calculation. 5. Calculation of the Regular Rate for an Hourly Employee Assuming an hourly employee receives no additional compensation, the employee’s hourly rate will constitute his or her regular rate for purposes of overtime payments. Example: An employee’s hourly pay, thus regular rate, is $15.00 per hour. The employee’s overtime rate is $22.50 per hour (1.5 x $15.00 regular rate = $22.50 per hour). If the employee works 50 hours in a week, the employee would be paid $825.00 for the week – $600.00 regular pay ($15.00 x 40 hours), plus $225.00 overtime pay ($22.50 x 10 hours). 6. Calculation of the Regular Rate for an Employee Paid on a Commission Basis Only Because commissions generally may be excluded from an employee’s regular rate of pay under Massachusetts law, calculating regular and overtime rates for employees paid on a 100 percent commission basis can be problematic. In 2019, the SJC held in Sullivan v. Sleepy’s LLC, that 269 M.G.L. ch. 151, § 1A.
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