Superior Court Holds That, Even With Advance Notice To Its Employees, An Employer May Not Avoid Its Obligations Under Sullivan v. Sleepy's LLC To Pay Separate and Additional Overtime

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In the recent Superior Court case of Martinez v. Burlington Motor Sports, Inc., et al., a defendant auto dealership moved to dismiss a commission-based employee's claim for overtime wages pursuant to G. L. c. 151, §§ 1A and 1B, arguing that the Massachusetts Supreme Judicial Court's (SJC) 2019 ruling in Sullivan v. Sleepy's LLC did not apply to the case. See Fitch's blog post on the Sleepy's decision here. The Sleepy's decision stands for the proposition that an employee paid on commission is entitled to separate and additional wages for minimum wage and to overtime and Sunday pay.

The defendant employer in Martinez maintained that it had complied with its obligations under the overtime statute because, it contended, it had notified the employee, plaintiff Martinez, before the wages were earned that it intended to allocate commissions it had paid to the employee to satisfy its overtime obligations. The defendants argued that the Sleepy's decision only applies in those instances where: (1) employers attempt to characterize certain payments as overtime payments retroactively; and (2) there has been no communication to the employee regarding which particular wages would be paid prior to the wages being earned. In denying the defendant's Motion to Dismiss, the Superior Court reiterated that, pursuant to the Sleepy's decision, employees paid solely by way of commissions are entitled to separate and additional payments for overtime work - in addition to their draws or commissions - and that, regardless, of whether the pay plan was an unambiguous, upfront communication to Plaintiff, Defendant could not subvert the plain language of the statute and use commission payments to satisfy statutory wage and hour obligations.

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