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Big Win for Injured Workers in MA: Courts Now Allowing Compensation for Pain and Suffering Damages

By Mass Business Blogger March 3, 2016 March 3, 2016 Healthcare, Insurance, Politics

On February 12, 2016, the Massachusetts Supreme Judicial Court ruled that, in third-party settlements, workers’ compensation liens will not cover damages for injured employees’ pain and suffering. The compensation for these “noneconomic damages,” which had previously been awarded to workers’ compensation insurance providers, will now be passed on to the workers. The ruling in the case—DiCarlo vs. Suffolk Construction—came as a victory for injured workers, ensuring that workers’ compensation insurance providers may not claim the entirety of a worker’s settlement with a responsible third party.

The Law in Massachusetts

Massachusetts workers’ compensation law entitles injured workers to compensation for medical care and lost wages. However, it does not provide compensation for pain and suffering. In some cases, a worker’s injuries at a workplace occur as the result of negligence by a third party, such as a property owner or contractor. If the third party is responsible for the injury, the injured worker can sue for damages—including compensation for pain and suffering—from the individual or party at fault. In DiCarlo vs. Suffolk Construction, the court ruled that workers’ compensation will not cover the portion of a third-party settlement intended to cover pain and suffering.

What Is the Business Impact of the Court’s Decision?

Third-party settlement amounts are sometimes less than the full amount of a workers’ compensation lien. An injured worker may choose to accept a compromise settlement that guarantees some compensation rather than risking a loss at trial. Prior to the DiCarlo ruling, a workers’ compensation insurance company could reduce its lien and allow an injured worker to keep some portion of a third-party settlement; the law, however, did not mandate such a lien reduction. From now on, an injured worker will now receive the portion of a third-party claim set aside for pain and suffering, with the remainder of the settlement used to defray legal expenses and any workers’ compensation lien.

Agreeing on Fair Distribution

The ruling did not include a formula for allocating compensation for pain and suffering, but the court noted that the amounts must be fair and proportional. Third-party settlements are reviewed by either a trial judge or by the Department of Industrial Accidents; all parties have the right to be heard. As a result of the DiCarlo ruling, compromise must be made in the best interest of both injured workers and workers’ compensation insurers.

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About the Author:

John J. Sheehan practices workers’ compensation law in Boston, Massachusetts, where he was born and raised. Mr. Sheehan is a member of organizations including the American Bar Association, the Massachusetts Bar Association, and the Massachusetts Academy of Trial Attorneys. In 1993, John Sheehan graduated from Suffolk University Law School and gained admittance to the Massachusetts state bar.

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How Legislation Is Fighting Airbnb in Massachusetts

By Mass Business Blogger September 23, 2015 September 23, 2015 Business, Hospitality, Politics

Airbnb is an online community that connects short-term renters to people with space to rent. The company began in 2008 as “Air Bed and Breakfast” and was imagined after its founders rented out airbeds in their home. Six years since its humble beginning, Airbnb has shortened its name and inflated its offerings to include small rooms for international travelers, villas for high-end business travelers, and just about everything in between. The company makes it easy to find both simple spaces and those with all the comforts of home. Hosts can post pictures and descriptions of the spaces they have available; travelers can then reserve those spaces on Airbnb’s secure website.

Airbnb Offers an “Authentic Experience” for Travelers

basic-hotel-room-doesnt-compare-to-aribnb airbnb photo

There are many benefits to using a service like Airbnb, including the opportunity to meet people from around the world without having to pay for an expensive hotel room. Airbnb hosts also tend to provide more personalized services (e.g., welcome baskets and access to cooking- and crafting supplies) that outclass those offered by most hotels. Airbnb is becoming a popular resource for small towns around the world that hope to attract tourists but have limited lodging options. Building a new hotel can cost between $300,000 and many millions of dollars, so smaller towns simply can’t afford lodging for the tourists they hope to attract. Airbnb and other short-term rental companies offer a less-expensive alternative to hotels.

Short-Term Rentals Prompt Legislative Concerns for MA

Despite the benefits of the service, some legislators are expressing concerns about Airbnb. In Massachusetts, state representatives Aaron Michlewitz and RoseLee Vincent have tried to introduce legislation that would be among the strictest in the country for short-term rentals. The measures would legalize the rental process but impose strict safety and registration requirements, as well as a 5% tax on rentals (to match the tax for hotel rooms). The taxes collected would support the tourism industry. The bill would also allow cities and towns to run inspections of short-term rentals to enforce safety codes. San Francisco, Portland, and the state of New York have begun to introduce similar regulations on short-term rentals, though many have found these rules to be ineffective.

New Hospitality Regulations Increase Massachusetts Tax Revenue

In 2011, Massachusetts collected $562 million in hotel tax revenue; individual cities in the commonwealth collected an additional $358 million. In 2014, short-term rental sites in the city of Boston alone collected over $10 million in sales . . . and the industry shows no indication of slowing. In fact, as discovered by Rich Vetstein on The Massachusetts Real Estate Law Blog, “A recent Boston Globe article [found that] Airbnb’s website currently lists nearly 3,500 properties for rent in the Boston area—a 63% increase since July 2013.” That number continues to spike. Because traditional lodging such as hotels is so closely monitored, legislators feel that the short-term rental industry should see similar regulations.

Airbnb offers a valuable service to travelers, but it is critical that the service be safe and reliable for all who use it. By implementing laws that increase the safety of short-term rental units and require Airbnb to improve the state’s economy through tax revenue, Massachusetts is taking a step to regulate an industry that, to date, has seen little regulation in the United States.

What Do You Think?

Have you used Airbnb, or are you somehow involved in the hospitality industry? Do you think these regulations are necessary?

Common Core Standards Are Questioned in Massachusetts Education

By Mass Business Blogger September 17, 2015 September 21, 2015 Business, Economy, Education, Politics

A spirited group of MA citizens, End Common Core MA, hopes to eliminate Common Core standards from the commonwealth’s education system. The MA state attorney general has officially declared the potential vote to be constitutional—a significant leap toward End Common Core MA’s goal. The group’s next (grueling) step is to gather 65,000 signatures for their cause, which will guarantee their question a spot on the November 2016 ballot.

Common Core Standards for College- and Career-Readiness in Massachusetts

The Common Core State Standards (CCSS) are a set of academic standards for kindergarten through 12th grade; they specify what students should be able to do by the time they reach each specific grade. The history of the CCSS can be traced back to 2008, when former Arizona Governor Janet Napolitano made it her goal to initiate a set of national educational standards.

Napolitano and her team had two primary objectives in creating the CCSS. First, they hoped to make American students career- and college-ready; the theory is that students who meet the CCSS will be prepared for both paths. The second objective was to use the CCSS to compare US student achievement against that of the rest of the world.

There is no explicit federal mandate to adopt CCSS, but the Department of Education has created incentives for states to adopt it by including Common Core as a criteria in applications for federal grants. Over forty states, including Massachusetts and the District of Columbia, have adopted some aspect of the CCSS since it was first offered.

Against the Common Core Standards

Opponents of the CCSS say that the standards represent a “one-size-fits-all” approach to education and focus too much on assessment and testing preparation at the expense of genuine learning. Valerie Strauss, for example, said in a letter published in the Washington Post:

When I read that math standard and others like it, I realized the claim of the creators of the Common Core—that the standards are clear, easy to understand and research-based—was simply not true.

For the Common Core Standards

Proponents of the CCSS argue that the mandates give students the education they need to succeed in the economy of the twenty-first century. They also note that although the CCSS sets the standards, states and local districts are free to develop their own methods by which to meet those standards. Robert Pondiscio wrote in the National Review that:

It’s hard to imagine a single education reform that would do more to improve the verbal proficiency of American children—especially low-income and minority kids—than for
[ . . . ] a rich, coherent elementary and middle-school curriculum to take deep and permanent roots in American schools.

People tend to swap sides, too—CCSS is obviously a complex solution to an even more complex problem. It seems difficult for many citizens to be wholeheartedly for or against the CCSS.

Business Groups Paying Close Attention

Massachusetts business groups are watching the progress of this debate closely. They recognize the need for a well-educated workforce that can fill the demands of increasingly sophisticated positions. They also recognize that a workforce lacking sufficient skills will require the assistance of government training (and financial aid), which will likely lead to higher taxes.

As a result, the Massachusetts Business Alliance for Education (MBAE) has come out in opposition to the proposed vote. MBAE supports the CCSS and claims that it would cost Massachusetts millions of dollars to repeal and replace the standards at this time. The MBAE spokesperson also noted that removing CCSS would make it highly burdensome to amend or replace standards in the future.

What do you think about Common Core in MA? Does Massachusetts need the Common Core to maintain a competitive economy?

Worcester Named Most Business-Friendly City in Massachusetts

By Mass Business Blogger September 8, 2015 September 8, 2015 Business, Economy, Politics

Massachusetts Small Businesses Make a Remarkable Turnaround in Just a Year

Business confidence in Massachusetts cities continues to grow . . . and you may not believe which city is at the top of the list. A recent survey of small business owners in New England ranked Worcester, Massachusetts, as the most business-friendly city in the state. When pinned against all cities in New England, Worcester was second only to Manchester, New Hampshire.

Worcester’s rise above regional hubs such as Boston and Providence caps a remarkable turnaround for the city. Business leaders agree that Worcester’s business climate is much-improved—the city received an overall grade of “B-” this year despite a lowly grade of “F” last year.

Worcester, MA Is Positioned to Expand Across All Business Sectors

Worcester and other mid-sized cities serve as a complement to Boston’s hub of finance, education, government, and professional services. They provide a hospitable climate for smaller businesses and manufacturers that may not be able to afford or be recognized in a larger city. Steve Rothschild, considered a small-business mogul in Worcester for his work with Applied Interactive, Bulbs.com, and Furniture.com, says that “Worcester is a great place to run a business because there is a well-educated workforce, an easy commute for employees, and low-cost commercial real estate.”

Worcester is particularly well-positioned because it has the history and infrastructure of a manufacturing hub but also a large service economy. The city boasts nine institutions of higher education and five major hospitals. Unlike many mid-sized cities that have struggled with population decline, Worcester has had steady population growth for the past three decades. Per capita income and education levels are on par with the state average. The combination of a well-rounded economy and an educated and skilled workforce allows Worcester to expand in many different sectors.

Improvement in Business Confidence “Grade” in Worcester, MA, Mirrors Massachusetts State Performance

The jump in Worcester’s business climate is consistent with the state’s improving economic indicators. The unemployment rate of 4.7% is significantly lower than the national average of 5.3%. For ten straight months, Massachusetts has increased its number of available jobs; 46,200 were added in 2015 so far—7,200 of which were added in July alone. Although most new jobs were in the education and health sectors, the state also added 1,400 manufacturing jobs in July. The Massachusetts Manufacturing Extension Partnership, based in Worcester, noted that much of the new manufacturing jobs came from small businesses with less than 50 employees. A number of jobs have also come from the booming craft beer industry in Massachusetts.

Business owners can be fickle when it comes to expressing approval of any business climate. The latest survey results, however, show that Worcester is headed in the right direction. If its trajectory continues, it will benefit not only the local economy, but the state economy as well.

Have you started a business in Massachusetts? Do you agree with the Worcester’s new grade of B-?

The Push for a Graduated Income Tax in Massachusetts

By Mass Business Blogger August 13, 2015 February 14, 2018 Business, Economy, Politics

Raise Up Massachusetts, a coalition representing religious leaders, liberal community organizers, and unions, is advocating a constitutional amendment to raise income taxes on the state’s wealthiest residents. The proposal, which would affect those earning more than $1 million annually, would reportedly bring in additional revenue of up to $1.4 billion per year.

The Massachusetts Communities Action Network, one of the coalition’s co-chairs, has indicated that the additional revenue would be earmarked for education and transportation, two areas where a number of needs have gone unmet over the past decade.

Raise Up Massachusetts has previously lobbied the state legislature to raise the minimum wage and was successful with a ballot initiative that required employers to provide earned sick time to their workers. The constitutional amendment process, however, will take three years and will most likely face fierce opposition for anti-tax groups.

All Massachusetts residents currently pay a flat 5.15% income tax that will reportedly decrease to 5%. The “Fair Share Amendment,” as it’s called by its proponents, would raise taxes to 9% for those earning more than $1 million annually. The 9% rate would only apply on income over $1 million. Approximately 14,000 tax payers would be affected by the proposal, which comes at a time when legislators are renewing efforts to require those with higher income to take a greater responsibility in the taxation process. The “Fair Share” moniker comes from the fact that low and middle income taxpayers contribute more of their disposable income under a flat-rate system than the most affluent taxpayers.

Proponents say the increased taxes could fund road and bridge reconstruction, investment in the MBTA and other regional transit bodies, and education funding— particularly for early intervention and post-high-school initiatives. Since 2002, state funding for education has failed to keep up with inflation, resulting in cutbacks in many school districts.

Opponents say that the proposal, if passed, would drive wealthy individuals away from Massachusetts. Voters have previously rejected ballot initiatives to move from a flat tax to a graduated income tax rate. A 1994 vote defeated a graduated tax rate with a 9.8 top rate, while a ballot question to establish a graduated income tax in 1972 was also defeated.

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New England States Explore Energy Alternatives

By admin April 27, 2015 April 28, 2015 Economy, Energy, Politics

Energy is expensive everywhere. However, while it may not be widely known elsewhere around the country, it is certainly no secret to those of us living here in Massachusetts that the commonwealth ranks as one of the most expensive when it comes to energy costs. With this in mind, state legislators and energy companies are making a concentrated effort to procure alternate sources of energy to augment current supply.

Officials from the state’s utilities and energy boards hope to source renewable energy from northern regions of the U.S. and Canada while simultaneously opening channels of less expensive natural gas via pipelines from both southern and western areas.

As part of this “diversified” solution, supplies of Canadian hydroelectric power already being generated will be imported while northern New England continues to develop wind farms on a mass scale.

National Grid, a provider of both gas and electric services in the Commonwealth, issued statements saying that both energy sources should be approved. Marcy Reed, the president of National Grid Massachusetts recently stated: “We say we need both pipelines.” National Grid normally “stockpiles” imported liquefied natural gas that is shipped in through port facilities. However, the gas was traded on a global market last year, and New England was the highest global bidder for those natural gas supplies. According to various sources, during the last three winters since 2011-2012, New England paid $1.6 billion to $3.8 billion higher wholesale electricity costs than has been typical.

The Joint Committee on Telecommunications, Utilities and Energy is getting ready to hear from clean energy industry officials and those representing energy derivatives from power plants. Committee Co-Chairman Sen. Benjamin Downing, pointed out that utility companies believe a lack of capacity in gas pipelines is the main culprit behind rate hikes during recent winter months and say there is an urgent need for natural gas flowing into the state from external sources.

According to Matthew Beaton, the Secretary of Energy and Environmental Affairs, other energy experts are saying the scarcity of natural gas is a “regional affair” and governors from several New England states are convening soon to discuss regional energy policies.

Some MA Business Owners Urging Delay of Sick Time Law

By admin April 23, 2015 February 14, 2018 Economy, Employment, Healthcare, Politics

In November of 2014, by a margin of 19 percent, voters in Massachusetts clearly expressed their wishes that a statewide provision be implemented requiring all employers to offer sick time. Every employer in the state will soon be required to offer either paid or unpaid sick time, depending on their number of employees. In each case, employees will be required to accrue the time with their hours worked, one hour for every thirty. This sick time is to be available to all employees, whether full or part-time.

The regulations are expected to be issued by the Attorney General’s office in mid- June and the law is set to go into effect this July. However, some employers are concerned, saying that the compressed time frame simply doesn’t allow businesses enough time between that publication date and the implementation of the earned sick time law. This is the primary complaint being voiced by most businesses. Without those regulations in place for use as a guideline, they say, businesses will be unlikely to be able to fully comply with the new law quickly enough. There are also concerns about businesses modifying existing sick time policies to match up with the new regulations, particularly given that most are likely in the middle of their fiscal year. Representatives from both camps are now asking that the date for implementation be pushed back to January of 2016

On the other side of the argument are proponents of the new law, like Raise Up Massachusetts, who want the law to go into effect as it was originally intended – on the very same timeline chosen by voters. They claim that the people have shown that they want this law and that this matters more than any difficulties businesses may face as a consequence of implementing the new law.

Baker Being Urged to Replace MBTA Board

By admin April 15, 2015 February 14, 2018 Politics, Transportation

Based on findings recently issued by a panel he appointed in February to investigate blizzard-related system shutdowns, Governor Charlie Baker is now being urged to find new leadership for the beleaguered MBTA. including asking for the resignations of the entire MassDOT Board of Directors. In a press conference, Baker stated there was a need to improve the fiscal responsibility and the performance of the transit system.

One recommendation includes creation of a five-member “Fiscal and Management Control Board.” Over the next three to five years, this board would supervise the MBTA’s finances, develop goals, restructure the MBTA, and “reinvent the labor-management and contract relationships.” Of the five board members, the governor would appoint three and the Senate President and the Speaker of the House of Representatives would each select one. This board would be given the mission to “aggressively” pursue these and other objectives, ultimately choosing a new CEO for the transit system.Baker shared the recommendations of this panel with the state legislature, saying they were “interested in the findings.” He also said that MassDOT board members are aware of the findings.The report includes recommendations to crack down on fare evasions and to add more advertising and concessions in stations. Interestingly, the report also suggested the state should assume debt payments for the Big Dig, in exchange for which the state would no longer cover shortfalls in the operating budget of the transit authority.Portions of the report have been leaked to the media over the past several days. One uncomfortable finding was that the average MBTA worker was absent 57 days a year. Perhaps more disturbing, the MBTA did not utilize up $2.2 billion in possible grants and bonds between 2010 and 2014.

Boston to Investigate Gender Wage Gap

By admin April 8, 2015 April 28, 2015 Media, Other, Politics

On Tuesday, Boston Mayor Martin J. Walsh jumped head first into the bickering swirling around the issue of the gender wage gap. He did so by announcing that the city is getting set to study the wages of male and female employees at dozens of local companies. This is the first attempt by any major U.S. city to quantify the gender wage gap by scrutinizing actual salary data.

Addressing an audience at the inaugural Boston Women’s Venture Capital Summit in the Seaport on Tuesday morning, Walsh said, “We know that the wage gap continues to be an issue all across this nation, and it’s time to stop talking about it and start taking action.”

Many of the state’s largest employers, including Putnam Investments and Blue Cross Blue Shield of Massachusetts, have agreed to anonymously provide wage information, broken down by gender, race, job category, and length of employment.

Evelyn Murphy, former lieutenant governor and member of Boston’s Women’s Workforce Council, said, “This is the game changer. Prior to now, this has been all so secretive. Some companies just don’t want people to know [salaries]. And you can understand why. But on the other hand it means there’s been no collaboration to get at the inequities that are really there.”

“We’re not trying to punish companies, we’re trying to have people understand where they’re at,” said Megan Costello, executive director of the Mayor’s Office of Women’s Advancement.

So, how do you convince a major corporation to peel back the lid on sensitive salary information when competitors would so clearly benefit from having access to that data?

By keeping it anonymous, that’s how. Even when the aggregate salary information is made public, the companies attached to specific data will not be revealed.

Tuesday morning, Walsh also made it clear that he is determined to lead by example.

The mayor says he observed a wage gap among top City Hall staffers as noted in a draft report from his new Office of Diversity. According to an analysis of payroll data, men in Walsh’s cabinet are paid, on average, nearly $156,000, while women in the cabinet earn $123,000.

To help close the gap, Walsh gave a 12 percent raise to his chief of policy, Joyce Linehan, increasing her annual salary from $125,000 to $140,000 and Laura Oggeri, the mayor’s spokeswoman, received a 15 percent pay hike, increasing her annual salary to $116,000 from $101,000. Despite these pay increases, women in Walsh’s cabinet are still being paid, on average, almost $27,000 less than men.

Previous attempts to address the wage gap have largely been limited to legislative proposals, including the federal Paycheck Fairness Act, which would increase pay transparency and require businesses to justify pay grade differences. Bills filed in Massachusetts earlier this year would prohibit employers from seeking job candidates’ salary histories and require that minimum pay be disclosed for advertised positions.

Analyzing the gender wage gap is a complex undertaking, said Kathy Horgan, chief operating officer for global human resources at State Street Corp., one of the companies taking part in the survey. She noted that one of the sources of salary disparities at the Boston financial services company appears to be a lack of women in senior positions.

“That’s where we don’t have the kind of representation of women that we want to see, and we do believe that’s a driver of our wage gap,” she said.

The city pledges to make the salary information public early this summer.

Berkshire County Rep. Proposes Change to Minimum Wage for Tipped Workers

By admin April 2, 2015 April 2, 2015 Hospitality, Other, Politics

Representative Tricia Farley-Bouvier of Berkshire County, Massachusetts has presented a bill that, if passed, would gradually increase the minimum wage for tipped workers in the state until they are paid the same as other minimum wage workers. This is an addition to the current law, which will increase minimum wage for tipped workers to $3.75 per hour from the current $2.63 by 2017. Standard minimum wage for those employees who do not receive tips was raised to $9 in January.

Massachusetts currently defines tipped employees as those who earn more than $20 per month in tips and who, with minimum wage plus tips, make at least $9 per hour. While employers are legally required to make up the difference for tipped workers who do not reach the $9 per hour threshold, restaurant worker advocates say that many avoid actually doing so. This is especially true for restaurants that employ large numbers of undocumented workers.

The bill is supported through the Restaurant Opportunities Center (ROC) of Boston advocacy group’s “One Fair Wage” campaign, which seeks to end wage theft by employers. According to research by the Economic Policy Institute, this type of theft results in employee loss of more than $50 billion per year.

Beyond the wage theft issue, many labor and gender relations experts believe that a landscape in which employees must work for tips leads to a culture of sexual harassment by customers. According to a report by the ROC, 78 percent of women and 55 percent of men who work in restaurants report experiencing this type of harassment. Their research also shows that restaurant servers, who are traditionally tipped employees, are three times more likely than other types of workers to live in poverty.

As expected, restaurant owners argue that moving away from the current system would make it difficult for them to create jobs because of the resulting economic loss. Stephen Clark, director of government affairs for the Massachusetts Restaurant Association, argues that in Massachusetts, most servers make at least $13 per hour, with some topping out at as much as $30 per hour.

California and Nevada have both enacted similar legislation.

Category: Politics