Below is a summary of cost cutting measures employers are taking to deal with COVID-19 and what it means for employees working and/or residing in Massachusetts.
- Reduction in employee hours/salary
COMPENSATION
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- Hourly non-exempt employees – rate of pay must still meet federal and state minimum wage requirements.
- Salaried/exempt employees – weekly salary must remain at or above the FLSA minimum salary basis of $684/week (or state salary basis test if higher).
- Changes to compensation and/or hours should be provided in writing to employee.
BENEFITS
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- In most cases, employee benefits are not affected.
- If significant cut in pay, may be eligible for unemployment benefits
- Furlough (mandatory leave without pay but remain an employee of the employer)
COMPENSATION
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- Furlough may be for a period of time or be in place on a rolling or bi-weekly basis.
- Employees who do not perform any work in a pay work week are not entitled to any pay.
- Hourly non-exempt employees – Employees are entitled to pay at their pre-furlough hourly pay rate for any work performed during the furlough period.
- Salaried/exempt employees – Employees who perform any work during the pay period are entitled to a full week’s pay.
BENEFITS
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- Long term furlough may trigger termination of healthcare benefits. If health care benefits are terminated, employee is likely eligible for COBRA.
- Employee should apply for unemployment benefits.
- Permanent/temporary layoff (No longer an employee)
COMPENSATION
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- Employers must, at the time of the layoff, pay employees all earned wages, commission accrued unused vacation.
BENEFITS
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- Long term furlough may trigger termination of healthcare benefits. If health care benefits are terminated, employee is likely eligible for COBRA.
- Employee should apply for unemployment benefits.
