Hiring Employees in Massachusetts

Classifying Your Workers Correctly

In Massachusetts, you must apply both federal IRS tests and the state’s strict “ABC” test when deciding if a worker is an employee or an independent contractor. The state presumes workers are employees unless you can prove they are free from control, perform work outside your usual course of business, and run an independent trade.

The IRS focuses on behavioral control, financial control, and the overall relationship to determine if someone is an employee for federal tax purposes. Misclassification in Massachusetts can trigger back wages, unpaid overtime, tax liabilities, treble damages, and civil or even criminal penalties, so you should review roles carefully and document your analysis – this guide can help: https://www.playroll.com/blog/employee-misclassification-guide.

Verify Employee Work Eligibility

Every time you hire in Massachusetts, you must complete federal Form I-9 within 3 business days of the employee’s start date to verify identity and work authorization. You’ll need to physically or remotely inspect acceptable documents from the Lists of Acceptable Documents, such as a U.S. passport or a combination of driver’s license and Social Security card.

Massachusetts does not mandate E-Verify for most private employers, but you may choose to use it if you apply it consistently and follow federal rules. You must retain I-9s for at least 3 years after the hire date or 1 year after termination, whichever is later, and store them separately from general personnel files to protect privacy.

Create an Employee Onboarding Process

Your onboarding process in Massachusetts should include a written offer letter, federal Form W-4, state Form M-4 for income tax withholding, and direct deposit authorization if the employee opts in. You should also provide your employee handbook, obtain signed acknowledgments, and issue required state notices such as wage and payday information and earned sick time rights.

Make sure you collect completed I-9s, emergency contact details, and any benefit enrollment forms within the first few days of employment. As you build your onboarding workflow, keep clear visibility on total hiring costs – wages, payroll taxes, and benefits – so your company can budget accurately for each Massachusetts hire.

Pay Frequency & Methods

In Massachusetts, most employees must be paid at least every 2 weeks or semi-monthly, and hourly workers generally must be paid within 6 or 7 days after the end of the pay period depending on the day worked. If you terminate an employee involuntarily, you must pay all final wages, including earned vacation if your policy makes it payable, on the day of discharge; if the employee resigns, you must pay by the next regular payday or the following Saturday.

Failure to pay wages on time can result in mandatory treble damages and attorneys’ fees under the Massachusetts Wage Act, so you should set clear payroll calendars and double-check final pay calculations. Keep detailed records of hours, rates, and deductions for at least 3 years to show compliance during any audit or wage claim.

Payment Methods (How You Can Pay)

You can choose among several payment methods in Massachusetts, but you must always ensure employees receive full wages without unlawful fees and get a clear wage statement each pay period.

• Payroll Check: You may pay employees by check drawn on a Massachusetts bank, and you must ensure they can cash it at full face value without fees.
• Cash: You can pay wages in cash as long as you provide a written pay stub showing hours, rates, gross pay, and all deductions.
• Direct Deposit (EFT): You may use direct deposit only if the employee voluntarily authorizes it in writing and can choose the financial institution.
• Paycards: You can offer paycards if employees consent, can access full wages at least once per pay period fee free, and receive clear disclosures of any card fees.
• Outsourced Payroll: You may outsource payroll to a third-party provider, but your company remains legally responsible for accurate, timely wage payment and tax remittance.

When you hire in Massachusetts, you must withhold and remit federal and state payroll taxes and pay several employer contributions. You’ll register with the Massachusetts Department of Revenue and Department of Unemployment Assistance before running payroll so you can file and pay electronically.

Employer Tax Contributions

Your company is responsible for employer-side Social Security and Medicare, Massachusetts unemployment insurance, and any required contributions to state programs such as paid family and medical leave. You must register through MassTaxConnect and with the Department of Unemployment Assistance before your first payroll and keep up with quarterly filings.

Employee Payroll Tax Contributions

You must withhold federal income tax, Massachusetts state income tax, the employee share of Social Security and Medicare, and employee contributions to PFML from each paycheck. Your company must remit these withholdings on the required deposit schedule and provide employees with Form W-2 after year-end.

Minimum Wage in Massachusetts

As of 2024, the Massachusetts minimum wage is $15.00 per hour for most non-exempt employees, with a separate service rate for tipped employees as long as tips bring them up to at least $15.00. Your company must track hours accurately and make up any shortfall if tips do not reach the full minimum wage in a given shift or workweek.

Working Hours in Massachusetts

Massachusetts generally follows a 40-hour workweek standard, and you must pay non-exempt employees for all hours worked, including certain on-call and training time. The state also has “blue laws” that regulate work on Sundays and certain holidays for some retail and other businesses, so you should confirm whether premium pay or voluntary work rules apply to your operations.

Overtime in Massachusetts

Non-exempt employees in Massachusetts are entitled to at least 1.5 times their regular rate of pay for all hours worked over 40 in a workweek, following federal Fair Labor Standards Act rules. Some employees are exempt from overtime if they meet specific salary and duties tests, so you should review job descriptions and pay levels carefully before classifying a role as exempt.

In Massachusetts, you’ll balance federal benefit rules with strong state protections, including paid family and medical leave and earned sick time. If you average 50 or more full-time employees across the U.S., the federal ACA will also require you to offer affordable health coverage or face potential penalties, so benefits planning is key to remaining competitive.

Mandatory Leave Policies in Massachusetts

Paid Time Off in Massachusetts

Massachusetts does not require general vacation or PTO, but once your company offers it, accrued vacation is treated as wages and must be paid out at separation according to your written policy. You should clearly define accrual rates, carryover, caps, and payout rules in your handbook to avoid wage disputes.

Many employers combine vacation, personal days, and sick time into a single PTO bank, but you must still comply with the state’s earned sick time law and ensure employees can use at least the required sick hours for covered reasons. Regularly reviewing your PTO policy helps you stay competitive in the Massachusetts talent market while managing costs.

Maternity & Paternity Leave in Massachusetts

Massachusetts provides robust protections for new parents through both the state parental leave law and the Paid Family and Medical Leave program. Eligible employees can receive job-protected leave for the birth, adoption, or foster placement of a child, with wage replacement benefits paid through PFML for up to a set number of weeks.

Your company must maintain health insurance benefits during PFML leave on the same terms as active employment and restore employees to the same or an equivalent position when they return, subject to limited exceptions. You should give written PFML notices, update policies, and coordinate state benefits with any employer-sponsored parental leave you offer.

Sick Leave in Massachusetts

Under the Massachusetts Earned Sick Time law, employees accrue at least 1 hour of sick time for every 30 hours worked, up to 40 hours per year. If you have 11 or more employees, this sick time must be paid; smaller employers must at least provide the time off without pay.

Employees can use earned sick time for their own illness, medical appointments, to care for certain family members, or to address domestic violence-related issues. Your company should track accruals, allow carryover of up to 40 hours, and may cap annual use at 40 hours while still meeting all notice and documentation rules.

Military Leave in Massachusetts

Massachusetts employers must comply with federal USERRA, which provides job protection and benefit rights for employees called to active duty or training. The state also offers additional protections for members of the National Guard and certain state military forces, including leave for training and emergency duty.

You should request and keep copies of military orders, continue benefits as required, and promptly reinstate returning service members to the same or comparable positions. Clarifying your military leave policy in writing helps managers respond consistently when employees are called to serve.

Jury Duty in Massachusetts

In Massachusetts, you must allow employees to take time off for jury service and may not discipline or threaten them for complying with a summons. For full-time employees, you are required to pay their regular wages for the first 3 days of jury duty, after which the court may provide a modest stipend.

You can ask employees to provide a copy of the summons and proof of service, and you may adjust schedules to minimize disruption while still honoring their legal obligation. Make sure your payroll system codes jury pay correctly so you maintain accurate records.

Voting Leave in Massachusetts

Massachusetts does not provide broad paid voting leave for all employees, but certain workers, such as those in manufacturing, may be entitled to take time off during the first two hours polls are open if they request it in advance. Even when not required, many employers voluntarily offer flexible scheduling so employees can vote before or after work.

Your company should decide whether to adopt a written voting leave policy and communicate it before major elections. Allowing schedule adjustments or brief unpaid time off can support civic participation while keeping operations running smoothly.

Bereavement Leave in Massachusetts

Massachusetts law generally does not require private employers to provide bereavement leave, though some public-sector employees and specific circumstances may have protections. Most employers choose to offer a few days of paid or unpaid bereavement leave as a matter of policy and employee support.

If you provide bereavement leave, clearly define eligibility, covered relationships, duration, and whether the time is paid. Aligning your policy with your broader PTO and leave framework helps managers respond compassionately and consistently when employees experience a loss.

Termination Process

Massachusetts is an at-will employment state, but you must still follow your own policies, contracts, and anti-discrimination laws when ending employment. Document performance issues, conduct fair investigations, and provide written termination notices that summarize final pay, benefits continuation options, and return-of-property expectations.

Notice Period

Massachusetts law does not require a general notice period for terminations or resignations, unless you have a contract or collective bargaining agreement that says otherwise. However, giving reasonable notice when possible can ease transitions and reduce the risk of disputes, especially for senior or specialized roles.

Severance

Severance pay is not mandated in Massachusetts, but many employers offer it in layoffs or negotiated separations in exchange for a release of claims. If you provide severance, you must pay it as agreed and ensure any release complies with federal and state rules, including special requirements for employees aged 40 and over.