Wednesday, May 31, 2017

Massachusetts Overpayments Proposal to Impact Employers

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PNN: MA Overpayments Reg

A bill was recently introduced in the Massachusetts legislature that would place several restrictions on an employer’s ability to recover an overpayment of wages from an employee (H.B. 3141). The employer would be required to provide the employee with a two week notice prior to the deductions beginning, and then could only recover an overpayment that was made eight weeks prior to issuing the notice to the employee. Employers would be allowed to make wage deductions only to recover overpayments for a period of six years from the original overpayment.

If the employee did not voluntarily agree in writing to the validity of the claim of overpayment, the employer would be prohibited from making any deductions from the employee’s wages to recover the overpayment. The recovery of an overpayment could not exceed 10% of the gross wages earned in any pay period, unless an employee voluntarily opted otherwise (in advance and in writing).

If more than 500 Massachusetts employees were affected by a payroll system failure that results in inaccurate payroll records and payment of wages, the employer would be required to provide notice to the state attorney general within one week of discovering the problem. This notice must include a course of action to remedy the problem.

The bill would have to be passed by both houses of the state legislature and signed by the governor to become law. Check back with Pay News Now as we continue to monitor the progress of H.B. 3141.