Pay Cuts and Compensation Changes- Your Rights Under the Massachusetts Wage Act
Navigating Pay Cuts and Compensation Changes: Your Massachusetts Wage Act RightsWondering if your employer can cut your pay or reduce your hours? The Massachusetts Wage Act provides clarity on your rights. While at-will employment allows employers to make prospective compensation changes, it's crucial to know that they cannot withhold wages you've already earned.
Massachusetts Wage Act and Retroactive Pay CutsIf your employer announces a reduction in your hourly rate but ensures it stays above the Massachusetts minimum wage, they are within their rights. However, if they pay you the new rate for hours worked at the old rate, they violate the Wage Act, and they must compensate you for the difference.
Sometimes, employers might not formally announce a pay cut but pay you less than the agreed wage. This too can be a violation of the Wage Act. Keep a close eye on your compensation, particularly if it includes commissions. Employers often modify commission policies, and there may be a delay between earning a commission and receiving payment. Any changes should ensure you're paid the old rate for commissions earned before the change. If a pay cut violates the Wage Act, your employer could be liable for treble damages, amounting to three times the owed amount, if you file a claim and prove the debt. Additionally, they must cover your costs and expenses, including attorney fees. The Massachusetts Wage Act and Agreements to Defer PayEmployers sometimes ask employees to defer a portion of their pay, common in startups or during economic challenges like the pandemic. However, the Wage Act explicitly states that employers cannot evade its provisions through employee agreements. Even if you agree to defer pay, it's not legally binding in Massachusetts.
Employers should exercise caution when considering pay deferrals. Legally, imposing a pay cut is a safer route if current salaries are unaffordable. However, this decision can sometimes lead valued employees to seek other opportunities. As an employee, knowing your rights is essential when your employer suggests deferring compensation. Ensure your employer fulfills the agreement to pay the deferred amounts as promised. Pay Cuts: Other ConsequencesEven forward-looking compensation reductions can have unforeseen effects. For instance, if you have a non-compete agreement, you may challenge its enforcement, arguing that your employer altered your employment terms by reducing your compensation.
Other agreements with your employer, such as non-solicitation agreements, work-for-hire contracts, or invention assignments, may also be jeopardized by a unilateral pay reduction. These commitments could be significant to your employer, so it's crucial to be aware of potential consequences. In summary, understanding the Massachusetts Wage Act is essential when facing pay cuts or compensation changes. Protect your rights and interests while navigating these employment challenges. |
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Meet Our Employment Lawyers
Emily Smith-Lee is the owner and founder of slnlaw. She is a 1996 graduate of Boston College Law School. She was previously a partner at the Boston office of a large international firm, where she worked for thirteen years before starting the firm that became slnlaw in 2009. She has been recognized as a Massachusetts Superlawyer each year since 2013, and in 2018 earned recognition as one of Massachusetts Lawyers Weekly's Lawyers of the Year. She has written a book on employment law: Rules of the Road, What You Need to Know About Employment Laws in Massachusetts, and helped thousands of clients on both the employee and employer side with issues relating to wage and hour laws, including overtime pay, late or unpaid wages or commissions, employee misclassification, and retaliation against employees asserting rights under the wage and hour laws.
Rebecca Rogers: Rebecca is a 2006 graduate of Boston College Law School, and has worked with slnlaw since 2013. She previously worked as an intellectual property litigation attorney for Fish & Richardson in Boston, Massachusetts, and clerked for the Massachusetts Supreme Judicial Court. Rebecca has helped clients with wage and hour disputes, including employee misclassification, late or unpaid wages or commissions, retaliation under the Wage Act, and advice to both employees and employers about wage and hour law compliance.
Jenna Ordway: Jenna is a 2013 graduate of Quinnipiac Law School, and also earned an LLM in Taxation from Boston University in 2015. She has been affiliated with slnlaw since 2011, first as a law clerk and then as an attorney. Jenna has been recognized since 2019 as a "Rising Star" by Massachusetts Superlawyers. Jenna has helped clients assess their rights under the wage and hour laws, including employee misclassification, untimely payment of final wages, late or unpaid commissions, retaliation, and advice to small business owners about wage and hour law compliance.
Elijah Bresley: Eli is a 2014 graduate of Seton Hall Law school, and has worked with slnlaw since 2020. He previously worked for a boutique employment law firm outside of Boston, and then for the Labor and Employment department of a large Boston firm. He also spent a year clerking for the judges of the Superior Court in Hartford, Connecticut. Eli has helped clients with wage and hour claims, including late or unpaid commissions, retaliation, employee misclassification, and overtime, and litigated these claims in state and federal courts. He also advises employers about employment policies and wage and hour compliance.
Sharleen Tinnin: Sharleen is a 2010 graduate of Northeastern University School of Law, and has been with slnlaw since 2023. Prior to joining slnlaw, she worked with King, Tilden, McEttrick & Brink, P.C. on complex civil litigation matters. She previously worked for the United States Department of Justice, and received an "Excellence in Justice" award in 2017. Sharleen has helped clients with multiple wage and hour issues, including retaliation, misclassification, and late or unpaid wages or commissions, and litigated these claims in state and federal courts.
How We Can Help
If you are facing a pay cut, or being paid less than agreed, we can help you assess the situation and advise you of your rights. We can also help put a strategy together to recover any compensation you may be owed. You can use the button below to schedule a call back from a member of our team, or give us a call at 781-784-2322.
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