By Bello Welsh LLP
The Massachusetts Attorney General’s Office, Fair Labor Division, has updated its list of Frequently Asked Questions About COVID-19, including an expanded response to the question of whether an employer that conducts a temporary layoff must pay final pay—including accrued vacation—at the start of the layoff (now numbered Question 3). The AG’s original response reflected that when an employer conducts a “temporary layoff,” accrued vacation is due at the start of the layoff. The revised response adds that if an employer takes an action that is intended to continue the employment relationship, for example instituting a “furlough” in which health and other benefits are maintained, the AG will not consider this to be a discharge for purposes of the Wage Act, and accrued vacation pay will not be due at the start of the furlough. However, if an employer becomes unable to continue contributions toward employee benefit plans, this will be deemed a discharge, triggering the employer’s obligation to make full payment on the next regular pay day.
In short, in this revised response the AG draws a distinction between a “temporary layoff,” in which the employment relationship is severed (even if temporarily) and another action (sometimes called “furlough”) in which the relationship continues to some degree. Regardless of what nomenclature is used, employers considering reductions should be aware of the AG’s position on this issue.
The revised FAQ document contains several other new items, including references to paid sick leave and emergency FMLA under the FFCRA (which we discuss here, here and here), high level descriptions of the CARES Act (which we discussed here, here and here) and information for independent contractors. The FAQ also highlights certain state-specific relief available to small businesses, including a fund run through the Mass Growth Capital Corporation and disaster assistance loans.
Of interest for employers, these new and revised FAQs confirm that the Massachusetts Earned Sick Time Law is a separate benefit, and that employers may not require employees to use sick time under the Massachusetts statute (or other employer-provided paid leave) before using the new federal paid sick time entitlement.