Massachusetts Overtime Law: What Employers Need to Know About Exempt vs. Non-Exempt Employees

Massachusetts Business Attorney · Employment Law

Calling an employee “salaried” does not make that employee exempt from overtime. Under both federal law and Massachusetts law, an exemption depends on how the employee is paid, how much, and what the employee actually does. When a business gets that wrong, the cost in Massachusetts can be steep, because the state’s overtime statute makes triple damages and attorney’s fees mandatory for a prevailing employee.

This article explains how the federal and Massachusetts overtime rules fit together, what the white-collar exemptions require, where employers commonly go wrong, and how to review your own classifications.

Two overtime laws apply at the same time

Most Massachusetts employers are covered by two overtime laws: the federal Fair Labor Standards Act (FLSA) and the Massachusetts overtime statute, G.L. c. 151, § 1A. The basic rule is the same under both. A non-exempt employee who works more than 40 hours in a workweek must be paid at least one and one-half times the employee’s regular rate for the hours over 40.

An employer has to satisfy both laws. If an employee is exempt under one law but not the other, the employer generally owes overtime under the law that does not exempt that employee.

The Massachusetts exemption list is different from the federal one

Section 1A contains its own list of employees the state overtime requirement does not cover. Some match federal exemptions, such as outside salespeople and bona fide executive, administrative and professional employees. Others are unique to Massachusetts. The state statute excludes, for example, employees of restaurants, hotels and motels, gasoline stations, hospitals and nursing homes, nonprofit schools and colleges, and certain seasonal businesses and amusement parks.

This point is often misunderstood. A restaurant or hotel that is outside the state overtime statute is usually still covered by the federal FLSA. Being on the Massachusetts list does not, on its own, mean an employer may stop paying overtime.

Massachusetts borrows the federal white-collar definitions

Section 1A(3) exempts a “bona fide executive, or administrative or professional person,” but the statute does not define those terms. The Massachusetts minimum wage regulations fill the gap. Under 454 CMR 27.03(3), those terms have the same meaning as in the federal regulations at 29 CFR Part 541. (Older materials cite the predecessor regulation, 455 CMR 2.00, which has been repealed.) In practice, that means the federal duties and salary tests are the starting point for the white-collar exemptions under Massachusetts law as well.

The white-collar exemptions: duties, salary basis and salary level

The federal exemption appears in 29 U.S.C. § 213(a)(1), which exempts employees working in a bona fide executive, administrative or professional capacity, and outside salespeople, as defined by Department of Labor regulations. Under those regulations, most white-collar exemptions require three things:

1. A salary basis. The employee is paid a predetermined salary, not by the hour.
2. A minimum salary level. The salary meets the federal threshold.
3. A duties test. The employee’s primary duty fits one of the recognized categories.

All three must be met, and job titles do not decide the question.

The duties tests

• Executive. The employee’s primary duty is managing the business or a recognized department or subdivision. The employee customarily and regularly directs the work of at least two full-time employees or their equivalent, and has authority to hire or fire, or the employee’s recommendations on hiring, firing and promotion are given particular weight.
• Administrative. The employee’s primary duty is office or non-manual work directly related to the management or general business operations of the employer or its customers, and that primary duty includes the exercise of discretion and independent judgment on matters of significance.
• Learned professional. The employee’s primary duty requires advanced knowledge in a field of science or learning, customarily acquired through a prolonged course of specialized intellectual instruction.
• Creative professional. The employee’s primary duty requires invention, imagination, originality or talent in a recognized field of artistic or creative endeavor.
• Computer employee. A systems analyst, programmer, software engineer or similarly skilled computer worker. A computer employee may be paid at least $27.63 per hour instead of a salary.
• Outside sales. The employee’s primary duty is making sales, and the employee customarily and regularly works away from the employer’s places of business. The salary requirements do not apply.

The federal regulations also include a “highly compensated employee” test for employees who earn at least $107,432 in total annual compensation (including at least $684 per week on a salary or fee basis) and customarily and regularly perform at least one exempt duty.

The current federal salary threshold

In 2024 the U.S. Department of Labor issued a rule raising the salary threshold to $844 per week, with a further increase scheduled for 2025. In November 2024, a federal court in Texas vacated that rule nationwide, and the Department returned to enforcing its 2019 levels.

As a result, the federal threshold in 2026 is the 2019 level: $684 per week ($35,568 per year) for the executive, administrative and professional exemptions, and $107,432 per year for highly compensated employees. If you read older articles that discuss the $844 or $1,128 figures, those increases never took effect.

Bills have been filed in Massachusetts to create a separate, higher state salary threshold. As of this writing, they are proposals, not law.

The salary basis test

Under 29 CFR 541.602, an exempt employee must receive a predetermined amount each pay period that is not reduced because of the quality or quantity of the work. Subject to limited exceptions, an exempt employee must receive the full salary for any week in which the employee performs any work. The regulations permit only certain deductions, such as full-day absences for personal reasons.

Under 29 CFR 541.603, an actual practice of improper deductions can cost an employer the exemption. The regulation includes a safe harbor for an employer that has a clearly communicated policy prohibiting improper deductions, with a complaint mechanism, reimburses affected employees, and commits in good faith to comply.

Massachusetts rules employers should know

Minimum wage

The Massachusetts minimum wage is $15.00 per hour under G.L. c. 151, § 1, and it remains $15.00 in 2026. For overtime purposes, a non-exempt employee’s regular rate cannot be lower than the minimum wage.

Paying a non-exempt employee a salary

An employer may pay a non-exempt employee a salary, but the salary does not cover overtime. Under 454 CMR 27.03(3), whatever the pay method, the pay cannot be credited toward the overtime premium for hours over 40, except for the “one-half” portion of the rate in a bona fide fluctuating workweek arrangement. A “salaried non-exempt” employee is still owed overtime.

Sunday and holiday premium pay

Massachusetts retailers once had to pay premium pay to non-exempt employees for work on Sundays and certain holidays. The 2018 “Grand Bargain” law phased that premium down, and it was eliminated as of January 1, 2023. Retailers no longer owe Sunday or holiday premium pay under state law. Two things remain. Hours worked on a Sunday or holiday still count toward the 40-hour overtime threshold. And state law still protects many retail employees who decline to work on Sundays or certain holidays from being penalized for refusing.

What misclassification costs in Massachusetts

Under G.L. c. 151, § 1B, an employee who is paid less than the required overtime rate may sue, individually or on behalf of similarly situated employees. A prevailing employee “shall be awarded” treble damages, as liquidated damages, for lost overtime compensation, plus the costs of the litigation and reasonable attorney’s fees. The award is mandatory, and an agreement to work for less is not a defense. The statute also exposes the employer and corporate officers or agents to civil citations and penalties.

The Massachusetts Wage Act, G.L. c. 149, § 150, has the same mandatory treble damages and fee provisions for wage-payment violations, and wage claims are often brought together with overtime claims. Both the Wage Act and the overtime statute (through G.L. c. 151, § 20A) have a three-year limitations period, which is paused while a complaint is pending with the Attorney General.

An employee may also sue under the FLSA, which provides for unpaid overtime, an equal amount as liquidated damages, and attorney’s fees, generally within two years, or three years for a willful violation.

Massachusetts law also prohibits retaliating against an employee who seeks wage and hour rights (G.L. c. 149, § 148A). How a business responds to an overtime complaint can create a second claim. See our article on retaliation claims and Massachusetts employers.

Common classification mistakes

• Relying on job titles. A “manager” who spends most of the day doing the same work as the hourly staff, and who does not direct two or more employees, may not meet the executive duties test.
• Assuming a salary makes an employee exempt. The salary basis is only one of three requirements. A salaried employee who fails the duties test is owed overtime.
• Treating every office job as administrative. Routine clerical or data-entry work, even when important, does not by itself involve discretion and independent judgment on matters of significance.
• Docking exempt salaries. Partial-day deductions and deductions for slow weeks can undermine the salary basis.
• Calling an employee a contractor. Massachusetts applies a strict test to independent contractor status. A worker treated as a contractor who is really an employee may be owed overtime too. See So you think your independent contractor is not an employee?

How to audit your classifications

1. List every salaried employee you treat as exempt. Note each one’s salary and the exemption you rely on.
2. Check the salary. Confirm it is at least $684 per week, or that a different rule applies, such as the outside sales or learned professional rules.
3. Compare duties to the test, not the job description. Ask what the employee actually spends time doing and whether the primary duty fits a recognized exemption.
4. Review deductions. Look for partial-day or other improper deductions from exempt salaries, and put a written policy prohibiting improper deductions in place, with a complaint procedure.
5. Check both laws. Confirm that each exemption works under both the FLSA and G.L. c. 151, § 1A.
6. Fix your recordkeeping. Massachusetts requires employers to keep records of each employee’s name, address, occupation, pay for each pay period, and hours worked each day and week, for at least three years (G.L. c. 151, § 15). The FLSA requires payroll records for three years and time cards for two. Accurate time records are often an employer’s best evidence in an overtime dispute.
7. Plan any reclassification with counsel. Changing an employee to non-exempt can be the right fix, but it can raise questions about past pay.

Overtime is one of several areas where Massachusetts employers have obligations beyond federal law. For another, see our article on Massachusetts Paid Family and Medical Leave.

Frequently asked questions

What is the overtime salary threshold in 2026?

Under federal law, $684 per week ($35,568 per year) for the executive, administrative and professional exemptions, and $107,432 per year for highly compensated employees. The 2024 rule that would have raised these levels was vacated in November 2024.

Do Massachusetts retailers still owe Sunday premium pay?

No. Sunday and holiday premium pay for retail employees was eliminated as of January 1, 2023. Hours worked on those days still count toward weekly overtime.

How much can an employee recover for unpaid overtime in Massachusetts?

Under G.L. c. 151, § 1B, a prevailing employee is awarded three times the lost overtime, plus costs and reasonable attorney’s fees. Claims generally must be brought within three years.

Getting help with overtime classification

If you have questions about whether your employees are properly classified, or you have received an overtime complaint, see our Massachusetts business law services or contact our office at 978-273-8337.

About the Author

Richard Alan Gaudet, Esq. is a Massachusetts attorney at the Law Offices of Richard Alan Gaudet, LLC in Middleton, Massachusetts, who advises businesses on employment matters, including wage and hour compliance, worker classification and employee disputes. His practice focuses on professional license defense, business law and litigation, family law, and landlord representation, serving clients across Northern, Eastern, and Central Massachusetts. Reach him at 978-273-8337 or rgaudet@gaudetlawoffice.com. Office: 35 Village Rd., Ste 100, Middleton, MA 01949.

ABOUT THIS ARTICLE

This article was prepared by a Massachusetts attorney and is provided solely for general informational and educational purposes directed to members of the general public. It does not constitute legal advice and does not create an attorney-client relationship. The law applicable to any particular situation depends on the specific facts and circumstances of that matter. Readers are encouraged to seek the advice of a licensed Massachusetts attorney before taking any action.