Category Archives: Business

New Guidance from Massachusetts on Reopening Office Space

By on May 20, 2020

Reopening The Office 

Under the Governor’s phased reopening plan office spaces outside Boston will be allowed to resume operations at 25% capacity beginning on May 25, 2020 and offices inside Boston may reopen at 25% capacity on June 1. Prior to reopening, businesses in all industries  are required to develop a written COVID-19 Control Plan outlining how the business will prevent the spread of coronavirus; sign and display a Compliance and Attestation poster informing visitors and employees that the business has developed and implemented procedures and protocols related to social distancing, hygiene, staffing and operations, and cleaning and disinfecting; and hang posters informing both employers and employees of the mandatory safety standards that have been established.

The Commonwealth released additional safety standards specifically for office spaces that must be implemented before workers are allowed to return to the office. The safety standards fit into four main categories; (1) social distancing; (2) hygiene protocols; (3) staffing and operations; and (4) cleaning and disinfecting.

Social Distancing

Initially, offices may only operate at 25% capacity. Capacity is determined either by the maximum occupancy specified by the office’s occupancy permit or the state building code, or the office’s typical occupancy as of March 1, 2020. Importantly, if the office has been operating as an essential business it must be in compliance with the occupancy requirements by July 1, 2020. Under limited circumstances related to public health and safety, or the provision of critical services, businesses may operate at a higher occupancy if there is a demonstrated need.

Businesses are encouraged to take creative approaches to social distancing and must take all practicable steps to ensure that individuals are at least six feet apart. Offices may need to be reconfigured to prevent congregating in common spaces, or to adequately separate workstations. Businesses should consider separating tables or desks, or by marking spots for people to work that are at least 6 feet apart. If work stations cannot be physically spread out, businesses must install physical barriers that are taller than standing workers.

If possible, businesses should create single-direction walkways and should assign workers specific physical locations to reduce movement and contact between workers. Moreover, businesses should consider staggering start, end, and break times to avoid large groups of people arriving and leaving at the same time, to prevent bottlenecks at exits and entrances, and to allow adequate social distancing in common areas.

Businesses must also take steps to create adequately ventilated spaces by opening windows and doors when possible. Only one person should be in a confined space at any given time. If more than one person must be in a confined space, all workers must wear a mask or face covering. To limit the use of shared, confined spaces, in-person meetings should be limited in quantity, duration, and attendance. Additionally, cafeterias may only serve pre-packaged foods. Businesses should limit visitors.

Hygiene Protocols

As from the beginning of the COVID-19 emergency, employees should be encouraged to wash their hands frequently and thoroughly. Businesses must make sure that employees have access to either handwashing facilities with soap and running water, or alcohol-based hand sanitizers with at least 60% alcohol. Employers should provide employees with cleaning supplies to keep their individual workstations clean and sanitized. High-touch surfaces must be cleaned at least daily, and workers should avoid sharing office equipment. If workers must share office equipment, the equipment should be disinfected after each use. Employers should post signs to regularly remind workers of the safety standards.

Staffing and Operations

Businesses will likely need to alter their operations to comply with safety standards and protocols. Businesses should provide training to workers on proper and up-to-date safety procedures relating to social distancing, hygiene, and cleaning. Workers should wear masks when social distancing is impossible and should continue to work at home if possible. Meetings should continue to be held virtually to enable social distancing.

Schedules should be staggered when possible to keep occupancy low. Visitors and on-site service providers should be limited, and businesses should create a designated shipping and receiving area to reduce contact between employees and outside workers. The business should keep a log of everyone that comes into the office, including temporary visitors, to enable contact tracing if someone in the office is diagnosed with COVID-19.

Most importantly, workers should be encouraged to stay home if they are feeling ill or experiencing any symptoms of COVID-19, or if they have been in close contact with anyone who has been diagnosed with COVID-19. If a worker tests positive for COVID-19 they should be encouraged to disclose their diagnosis to their employer so that the office can be properly cleaned and disinfected.

Cleaning and Disinfecting

The office should be cleaned daily, at minimum, but more often if possible. Businesses should keep a log that includes the date, time, and scope of cleaning to ensure that cleanings are completed regularly. High-touch surfaces such as doorknobs, vending machines, and elevator buttons must be frequently disinfected and shared spaces such as conference rooms should be cleaned in between uses. If a worker is diagnosed with COVID-19, the office must be shut down for a deep cleaning and disinfecting.

These guidelines from the Commonwealth are the minimum safety standards businesses must put into practice in order to reopen. Businesses are encouraged to be creative and to develop additional safety procedures and protocols in order to prevent the spread of COVID-19. By taking careful, meticulous steps to create safe workspaces, businesses can make their reopening process as smooth and uncomplicated as possible.

Corporate Considerations: Keeping up Formalities and Successor Liability

By on January 30, 2019

As discussed in previous posts, the creation of a formal corporate entity and compliance with state prescribed formalities can offer business owners and members substantial protections from individual liability for business debts when acting by and through an entity. This compliance with formality can also offer substantial protections in the common event of one entity (a “Successor Entity”) purchasing, or otherwise succeeding, another entity (a “Predecessor Entity”).

As a general rule, in the absence of a contractual obligation, individual corporate entities are not liable for the debts of other corporate entities. However, there are exceptions to every rule and there are instances when a Successor Entity can be held liable for the debts and liabilities of a Predecessor Entity. Specifically, this so called “successor liability” can attached in instances where, “(1) the successor expressly or impliedly assumes liability of the predecessor, (2) the transaction is a de facto merger or consolidation, (3) the successor is a mere continuation of the predecessor, or (4) the transaction is a fraudulent effort to avoid the liabilities of the predecessor.” Premier Capital, LLC v KMZ, Inc. (2013).

The Appeals Court of the Commonwealth of Massachusetts recently considered this very successor liability standard. In Fashionhaus, LLC v T&C Mail Street, Inc. et al (2018), the Court considered whether the relationship between the defendant entities was that of two independent entities, such that the liabilities of the old entity were distinct from the new entity, or whether the defendant entities were essentially one in the same, such that the new entity could be held accountable for the old entities liabilities.

After considering a multitude of factual considerations, the Court ultimately held the defendant entities did not behave in a manner to impose successor liability onto the new entity. The Court determined that there was no de facto merger or consolidation as ‘all’ or ‘substantially all’ of the Predecessor Entities’ assets were not transfer to the Successor Entity and sufficient separation was maintain relative to the operations of the Successor and Predecessor Entities. Additionally, the Court found no evidence of fraud.

Thus, whether considering the purchase of an entity, or winding down an existing company to operate under a new corporate form, it is important that one understands how to avoid the pitfalls of potential successor liability. As previously noted, adherence to the prescribed steps is paramount to limiting future liabilities as they may relate to corporate entities. If you have questions with regard to business formation and/or operations you should consult with a knowledgeable attorney to determine your best options.

Massachusetts Paid Family and Medical Leave Draft Regulations – How Employers Can Get Involved

By on January 22, 2019

Starting in 2021, Massachusetts employees will be entitled to paid family and medical leave under the Massachusetts Paid Family and Medical Leave Act. The leave will allow employees to (1) care for a family member with a serious health condition, or (2) care for the employee’s own health condition. The leave period ranges from 12 to 26 weeks, depending upon the reason for the leave. The law also protects employees from retaliation after taking such leave.

Beginning in July of 2019, employers will be required to make contributions to the state fund that will be used to pay for these leaves and to provide certain notices to employees regarding the new law. The newly-created Massachusetts Department of Family and Medical Leave plans to publish draft regulations for the Massachusetts Paid Family and Medical Leave Law no later than January 23, 2019; these draft regulations are expected to provide more information on the law, as well as employers’ obligations under the law to make fund contributions.

The Department has scheduled a number of public listening sessions on the draft regulations throughout the Commonwealth, beginning with a session in Boston on January 30, 2019. A complete list of these public listening sessions can be found here. Any member of the public, including representatives from employers around the Commonwealth, may attend and present testimony related to the proposed draft regulations. In addition, written presentations may be sent to MassPFML@Mass.gov.

Show Me the (Same Amount of) Money!

By on June 21, 2018

The state’s new pay equity law, which amends the Massachusetts Equal Pay Act (“MEPA”), will take effect on July 1, 2018.  It is one of the strongest pay equity laws in the country, and subjects employers to double damages and attorneys’ fees in the event of a violation.  Moreover, it is a “strict liability” statute.  Thus, whether or not an employer intends to discriminate against employees of one gender is “irrelevant” to the analysis.

The amendments prohibit employers from, among other things:

• Paying different wages to people of different genders who perform “comparable work,” unless the difference in salary is attributable to one (or more) of six enumerated statutory factors;

• Asking job applicants about their wage or salary history;

• Decreasing the wages of an employee solely to close the wage gap;

• Retaliating against employees for exercising their rights under MEPA.

The revisions also establish a safe harbor provision for employers who perform self-evaluations of their pay practices.

What Does “Comparable Work” Mean?

MEPA defines “comparable work” as work that “requires substantially similar skill, effort, and responsibility” that is performed under similar working conditions.  Employers should not assume that a job title, or even a job description, necessarily determines comparability.  In fact, employees need not even be in the same business unit or department in order have “comparable” jobs.  Notably, this is a broader definition than the “equal work” standard under federal law.

Even if employees are in comparable roles, however, employers are permitted to pay them different salaries if the difference is based on of one (or more) of the following factors:

• A seniority system (as long as seniority is not affected by pregnancy, parental or family leave);
• A merit system;
• A system that measures earnings by quantity or quality of production, sales, or revenue;
• The geographic location in which a job is performed;
• Education, training, or experience, as long as these factors are reasonably related to the job in question; and
• Travel that is a regular and necessary part of the job.

What Employers Should Know About the Safe Harbor Provision

In order to trigger the safe harbor provision, which establishes an affirmative defense against liability for claims of pay discrimination, an employer must have conducted a “reasonable and good faith” pay audit within the previous three years (and before an employee files an action), and must demonstrate that it is making “reasonable progress” towards eliminating wage differentials across genders.

Self-evaluations not only help employers identify and rectify wage gaps, they guard against liquidated damages in the event of a judgment against the employer, even if the evaluation was not “reasonable” in detail and scope.

Guidance for Employers

The Massachusetts Attorney General’s Office has issued a Guidance that addresses the amendments.  While the Guidance does not have legal force, it is a useful compliance tool and a good place to start if you have basic questions about how to ensure you are compensating your employees equally across genders for “comparable work.”  However, employers should bear in mind that “the complexity of the analysis required will vary significantly depending on the size, make-up, and resources of each employer”; the Guidance does not, and cannot, address the many fact-specific situations that may arise at any given place of employment.

In addition to the Guidance, the AG’s Office has generated a “Pay Calculation Tool” to help employers identify and evaluate gender-based pay gaps.  Smaller employers with clearly defined groupings of comparable jobs and relatively simply pay structures may benefit from using the tool, at least as a first step; it is not appropriate for large pay groups or complicated pay structures.  Furthermore, the data the tool generates may be discoverable in litigation or government investigations, so employers should consult with counsel before conducting any self-evaluation.

Massachusetts Pregnant Workers Fairness Act Takes Effect

By on April 25, 2018

As of April 1, 2018, all Massachusetts employers with six (6) or more employees are subject to the state’s new Pregnant Workers Fairness Act (the “Act”).

In light of the pre-existing federal law in this area, what is most notable about the Act is that it requires covered employers to provide:

• non-exempt and exempt employees with reasonable breaks and an appropriately private place to express breast milk;
• written notice to their employees regarding the rights provided under the Act; and
• reasonable accommodation(s) to employees on the basis of pregnancy and pregnancy-related conditions.

Reasonable accommodations may include thing like frequent or longer breaks, light duty, or a modified work schedule.

It is unlawful to retaliate against employees for requesting such an accommodation. Likewise, employers cannot deny an employment opportunity to an employee if the denial is based on the employer’s knowledge that it would have to provide the employee a reasonable accommodation, nor can an employer refuse to hire someone on the basis of pregnancy or a pregnancy-related condition, provided that person can perform the job (with a reasonable accommodation, if necessary).

Employers must provide the required written notice in a handbook, pamphlet, or other appropriate form to:

• current employees on or before the effective date of the Act;
• a newly-hired employee at the time of his or her hire; and
• any employee who notifies the employer of a pregnancy or a pregnancy-related condition, within 10 days of such notice.

Employers may satisfy the written notice requirement using the two-page Pregnant Workers Fairness Act Guidance published in part for this purpose by the Massachusetts Commission Against Discrimination (MCAD). The MCAD has also published a helpful Q&A regarding the Act.  Should you have questions concerning compliance with the Act or other matters, speak with an experienced employment attorney.

UPDATE: Airbnb Hosts Beware: Boston Proposes Regulations on Short Term Rentals

By on April 16, 2018

Airbnb Hosts Beware, as the Massachusetts Legislature is now considering a bill to tax Airbnb and the short term rental industry.

Recently, the Massachusetts House of Representatives passed a bill (H 4327) that places a tax on short-term rental units as well as establishes a state registry of short-term rentals. The short-term rental tax established by the bill is imposed via a tired system depending on the amount of units any one host rents/owns. More specifically, and based on the short-term rental rent:
• Hosts that rent two or fewer units (“Residential Hosts”) are subject to a 4% tax;
• Hosts that rent three to five units (“Investor Hosts”) are subject to a 5.7% tax on the short-term rental rent; and,
• Hosts that rent more than six units (“Professionally Managed Hosts”) are subject to an 8% tax on the short-term rental rent.
The bill also allows city and towns to impose an additional tax on the same short-term rentals, however, such tax is limited to:
• 5% on Residential Hosts;
• 6% on Investor Hosts; and,
• 10% on Professionally Managed Hosts.

While the House bill still has a ways to go before becoming law, Massachusetts Governor Charlie Baker has indicated that he would like to sign a short-term rental bill this legislative session.
Boston residents who participate in the short-term-rental economy are well advised to understand, and keep an eye on, proposed changes in housing law as regulations begin to promulgate in response to a growing industry.

The White House Proposes $1.5 Trillion Infrastructure Development Program

By on February 12, 2018

The White House recently released its “Legislative Outline for Rebuilding Infrastructure in America.” 

In the preamble to the outline, The White House requested that Congress act to implement the infrastructure program in short order through new legislation.  In broad strokes, the outline calls for new spending to stimulate $1.5 trillion dollars in infrastructure investments, from federal and state governments, agencies and localities, to address American infrastructure projects.

Should the program be implemented by Congress in any meaningful way, it would mean a boon for public construction projects and contractors.  Contractors would be wise to keep a careful eye on this proposed legislation as it develops.     

 

Airbnb Hosts Beware: City of Boston Proposes Regulations on Short Term Rental Industry

By on February 5, 2018

Boston Mayor, Marty Walsh, recently proposed a citywide ordinance that will, if adopted by City Council, subject short-term rentals – such as those advertised through the popular home-sharing website, Airbnb – to regulations and reporting requirements.

The proposed ordinance requires that all short-term-rentals register with the city and pay an annual fee based on a tiered rental classification system. The classification system additionally dictates how many days per year various properties may be rented and the maximum number of guests per night. The ordinance also imposes a room occupancy excise tax on all short-term rentals. Short-term-rentals that are noncompliant with city codes will be ineligible for registration. Further, beyond requiring individual owner/host compliance, the ordinance also places reporting requirements on the booking companies themselves. 

Specifically, the ordinance classifies three types of short-term rental units:

  1. Limited Share Units
  2. Home Share Units; and
  3. Investor Units

Limited Share Units are rentals that are the host’s primary residence such that the host is present through the duration of the short-term rental. Limited Share Units may be offered for short-term rent 365 days of the year and will be subject to an annual $25.00 registration fee.

Home Share Units are also rentals that are the host’s primary residence that may be offered for short-term rent 365 days of the year. The host, however, need not be present through the duration of the short-term rentals, so long as the number of days booked for rental when the host is not present does not exceed 90 (consecutive or nonconsecutive) per year. Home Share Units will be subject to an annual $100.00 registration fee.

Investor Units are rentals that are not the host’s primary residence. Investor Units may be offered for short-term rental for up to 90 days (consecutive or nonconsecutive) per year and will be subject to an annual $500.00 registration fee.

Boston residents who participate in the short-term-rental economy are well advised to understand, and keep an eye on, proposed changes in housing law as regulations begin to promulgate in response to a growing industry.

Understanding the Limitations of Chapter 93A: Pre-Litigation Attorneys’ Fees Not Recoverable

By on January 30, 2018

The Regulation of Business Practices for Consumer Protection Act, commonly referred to by its statutory chapter number, “Chapter 93A,” is a frequently utilized statute that provides individual consumers and businesses with a right to bring legal action and recover damages if they are harmed by an unfair business practice.  Under the statute, “unfair or deceptive acts or practices” or “unfair methods of competition” committed while conducting business in Massachusetts permit the harmed party to recover their actual damages, or a statutory minimum of $25 per offense (whichever is greater), and up to three times such damages for knowing and willful violations of the statute, plus an award for reasonable attorneys’ fees and the costs of the lawsuit.  Chapter 93A creates harsh penalties, with a wide-reaching scope, to deter unfair business acts, however, it does have limitations.

Previously, we explained the prohibition on Chapter 93A recovery with regard to a party’s decision to litigate a dispute, rather than settle with the opposing party.

A second limitation on recovery under Chapter 93A relates to the timing of when a party’s legal fees are incurred. Recently, the Suffolk County Superior Court considered the issue of whether pre-litigation attorneys’ fees are recoverable under Chapter 93A in Beninati, et al. v. Borghi, et al. The court awarded double damages to one of the plaintiffs under Chapter 93A. The defendants who were found liable under Chapter 93A then moved the court to reduce the attorneys’ fees award by $170,000 for fees incurred prior to the filing of the lawsuit, relating to “extensive settlement discussions.” The court agreed that pre-litigation fees are not recoverable under Chapter 93A, stating that it “is aware of no authority that permits the award of fees incurred before the litigation began and that do not bear directly on its preparation.”  Accordingly, the court excluded the pre-litigation attorneys’ fees from the award.

This case is just one example of the importance of understanding the process of litigating claims and the implications of dealing with an adverse party.  Depending on the circumstances of a dispute, it can be wise to initiate litigation sooner to ensure large portions of incurred attorneys’ fees are ultimately recoverable from the party causing the harm. To learn more about scope and application of Chapter 93A, contact an experienced Massachusetts litigation attorney.

Corporate Considerations: The Importance of Formal Dissolution

By on January 2, 2018

            As discussed in previous posts, the creation of a formal corporate entity and compliance with state prescribed formalities can offer business owners and members substantial protections from individual liability for business debts when acting by and through an entity. This compliance with formality can also offer substantial protections in the event the choice is made to close, or otherwise cease conducting business through, a formal entity.

            If the choice is made to dissolve an entity, members would be well advised to take the proper statutory steps in order to cease operations formally.  It is important to undertake the appropriate formalities in order to terminate the existence of the entity with State officially, and more importantly, to place the dissolved entity and any remaining assets (including final shareholder/member distributions) outside of the reach of third party claims. 

            The Massachusetts Business Corporations Act spells out all steps necessary to  dissolve a corporation formally.  Among other formalities, it is necessary to take a proper vote to initiate dissolution, file Articles of Dissolution with the Commonwealth, properly notice creditors and potential creditors of dissolution, and properly wind down corporate activity.  As previously noted, adherence to the prescribed steps is paramount to limiting future liabilities as they may relate to a dissolved corporation. If you have questions with regard to business formation and/or operations you should consult with a knowledgeable attorney to determine your best options.