The Law at Work: Overtime requirements for seasonal employers; Federal minimum wage increase
by Beth O'NealOvertime requirements for seasonal employers
Can you explain the overtime requirements for seasonal workers? I manage a sailing school that is only open for the summer. We employ sailing instructors, swimming coaches and dock hands, among others. It is my understanding that none of my employees who are paid by the hour need to be paid overtime because the business is seasonal. Is this correct?
It is important for owners and managers of businesses that only operate during certain times of year to understand the overtime requirements and the proper procedure to apply for seasonal status.
Massachusetts Minimum Fair Wage Law provides that certain workers must be paid overtime (time and a half) for hours worked in excess of forty in one work week. However, specific types of employees are exempt from having to be paid overtime; including those who work “in a business or specified operation of a business which is carried on during a period or accumulated periods not in excess of 120 days in any year, and determined by the commissioner to be seasonal in nature.”
However, in order to qualify as a seasonal employer, which would allow you to employ “seasonal” workers who are not entitled to overtime, you must complete an Application for Certification as a Seasonal Employer and submit it to the Department of Workforce Development. The instructions and the application are available at mass.gov. If your sailing school operation is granted seasonal status and your business is not carried on for more than 120 days, then you will not be required to pay your workers overtime.
If you have questions regarding whether you are required to pay your employees overtime, you should consult employment counsel because the penalties, both criminal and civil, for failing to pay workers in accordance with the overtime laws can be severe.
Federal minimum wage increase
I recently heard that President Bush signed into law an increase in the federal minimum wage that went into effect July 24, 2007. Am I supposed to pay this new federal minimum wage to my Massachusetts employees? I would prefer to do so, as the new federal minimum wage is less than the Massachusetts minimum wage.
You are correct that the federal minimum wage was increased for the first time since September 1997. The first increase, effective July 24, 2007, will boost the federal minimum wage from $5.15 to $5.85 per hour. A second increase is scheduled, effective July 24, 2008, which will bring the federal minimum wage from $5.85 per hour to $6.55 per hour. And a third increase, effective July 24, 2009, will bring the minimum wage from $6.55 per hour to $7.25 per hour. As always, however, where a state's minimum wage is greater than the federal minimum wage, covered employees are entitled to receive the higher minimum wage under the state law where they are employed. So, for example, in Massachusetts the current minimum wage is $7.50 per hour (and will be increased, effective January 1, 2008, to $8.00 per hour), which is higher than the highest rate to which the federal minimum wage is scheduled to go as of July 24, 2009.
Other neighboring states, including Connecticut, Vermont and Rhode Island, have minimum wage rates that exceed $7.25 per hour scheduled to become effective in 2009 under federal law. Other states will be affected by the $.70 increased this year (i.e., on July 24, 2007 the federal minimum wage will go from $5.15 to $5.85 per hour) because either their minimum wage is below the federal rate or because their state minimum wage automatically adjusts to match or exceed the federal rate. That includes New Hampshire.
Beth O’Neal, Esq., is a partner in the Boston law firm of Masterman, Culbert & Tully LLP. Send questions to meo@mctlaw.com.
This column, which may be considered advertising under the ethical rules of certain jurisdictions, is intended as a general discussion of the topics covered, and does not constitute the rendering of legal advice or other professional advice by Masterman Culbert and Tully LLP or its attorneys. In compliance with U.S. treasury regulations governing tax practice, any U.S. federal tax advice contained in this publication is not intended or written to be used, and cannot be used, for purposes of avoiding tax penalties or in connection with the promoting, marketing or recommending to any individual of any transaction or matters addressed therein.
Published in Cape Business Sept/Oct 2007
Beth O'Neal Beth O’Neal, Esq., is a partner in the Boston law firm of Masterman, Culbert & Tully LLP. 
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