© 2025 Seyfarth Shaw LLP Massachusetts Wage & Hour Peculiarities, 2025 ed. | 47 commission-only employees are entitled to a separate and additional amount of at least one and one-half times the minimum wage whenever they work more than 40 hours in a workweek.270 The Sleepy’s decision rejected the analysis of a 2003 DLS opinion letter which had stated that commission-only employees must receive total compensation for each week of work that equals or exceeds what they would earn if they were paid hourly at the minimum wage rate.271 Thus, an employer cannot rely on commissions or draws against commissions alone to satisfy the overtime pay requirements. 7. Calculation of the Regular Rate When a Bonus Is Included in the Rate Massachusetts law excludes bonuses in determining an employee’s regular rate. Under the FLSA, however, non-discretionary bonuses must be included in an employee’s regular rate.272 To calculate the effect of the bonus on the employee’s regular rate, an employer must first determine the period of time the bonus is intended to cover.273 If a bonus covers only one week, the regular rate for that week is calculated by adding the bonus to the employee’s other compensation for the week and dividing the total by the number of hours the employee worked. When a bonus plan calls for calculation of bonuses over a period longer than a week, the employer can disregard the bonus in computing the employee’s regular rate until such time as the bonus can be calculated. In the interim, the employer must pay overtime based on the employee’s hourly rate. Once the bonus can be ascertained, the employer must then apportion the bonus to the weeks during which it was earned. The employee will then be entitled to an additional overtime payment of one-half times the hourly rate of pay allocated to the bonus multiplied by the number of overtime hours worked that week.274 If the bonus earnings cannot be identified with particular workweeks, the employer can use another reasonable and equitable method to allocate the bonus (such as dividing the bonus equally among each of the weeks of the period to which it relates or dividing the bonus in proportion to the hours worked each week of that period).275 Example: Under an employer’s bonus plan, an employee is entitled to a nondiscretionary $1,000 monthly bonus if the employee meets certain performance goals. The employee meets those goals in a month in which the employee worked 50 hours in each of the four weeks of that month. The bonus would be allocated to each of the four weeks by dividing the $1,000 bonus by 4 (corresponding to the four workweeks in the period) to determine the amount of the bonus allocable to each week. In this case, the amount would be $250.00. The employee’s overtime 270 Sullivan v. Sleepy’s LLC, 482 Mass. 227 (2019). The SJC explained that this analysis also applied when retail employees are entitled to premium pay for work on Sunday. 271 DLS Opinion Letter MW-2003-004 (Mar. 14, 2003). 272 29 C.F.R. § 778.208. 273 29 C.F.R. § 778.209. 274 29 C.F.R. § 778.209(a). 275 29 C.F.R. § 778.209(b).
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