Massachusetts Wage Act Triple Damages
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The Massachusetts Wage Act requires an employer to pay triple damages if it is found that an employee was not paid properly or timely. This applies to unused vacation time at the time of termination, commissions that are earned, and regular wages.
Until recently, employers could avoid triple damages by making full payment of any amounts owed before the employee filed a complaint. This created a window of time in which an employer could cure an honest mistake without incurring significant liability. It also created an incentive for employees to file quickly, in order to ensure the availability of treble damages. The Massachusetts Supreme Judicial Court, however, has recently issued an opinion that changes the rules in favor of employees. In short, the court held that the Wage Act requires tripling of all amounts not timely paid, even if they are paid prior to the filing of a complaint. |
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Strict Liability for Late Paid Wages
The April 4, 2022 Supreme Judicial Court decision in Reuter v. City of Methuen makes even a slight delay in payment of wages a dangerous and expensive proposition for employers. On the flip side, it provides further protection for employees who are denied their earned compensation.
The SJC recognized that its ruling left no real margin for error for employees. However, according to the court:
"By imposing strict liability...the Legislature has decided that employers rather than employees should bear the cost of such delay and mistakes, honest or not..."
This particular case was about payment of unused vacation time on the day of termination, but the reasoning should be the same for payment of any wages or commissions, either at termination or weekly or bi-weekly as required by the Wage Act.
The SJC recognized that its ruling left no real margin for error for employees. However, according to the court:
"By imposing strict liability...the Legislature has decided that employers rather than employees should bear the cost of such delay and mistakes, honest or not..."
This particular case was about payment of unused vacation time on the day of termination, but the reasoning should be the same for payment of any wages or commissions, either at termination or weekly or bi-weekly as required by the Wage Act.
Final Paycheck At Termination
If you leave work voluntarily, all earned wages must be paid to you on the employer's next regular payday. If you are fired, you should be paid your last paycheck the day of termination. In either scenario, your final paycheck should include:
- Payment for all accrued and unused vacation time (this does not include sick time)
- Payment for all hours worked in the pay period, and time and a half for any hours worked over 40 in a wee if you are a non-exempt employee.
- Any commissions that you have earned before termination.
- Certain travel time, if your job requires you to move from one worksite to another during the day.
Late Paid Commissions
Commission pay raises special issues at with respect to the timely payment of wages. It is common for commission policies to run on a monthly or quarterly basis, which does not match up with the Wage Act requirement for payment within six days of the end of a pay period.
Previously, this kind of chronic delay in payment of commissions did not receive much attention under the Wage Act, as long as the commissions were eventually paid. This is again because of the prevailing belief that the employer would only be liable for interest on the delayed amounts. In light of the new SJC decision, however, commission-based employees may be taking a harder look at the timeliness of their commission payments even during employment.
Previously, this kind of chronic delay in payment of commissions did not receive much attention under the Wage Act, as long as the commissions were eventually paid. This is again because of the prevailing belief that the employer would only be liable for interest on the delayed amounts. In light of the new SJC decision, however, commission-based employees may be taking a harder look at the timeliness of their commission payments even during employment.
Review of Regular Payroll Cycles
The Massachusetts rules on the timing of wage payment are different than many other states. We have found over the years that companies who are headquartered elsewhere but have Massachusetts employees may have payroll cycles that are just a little bit off the six day deadline in the Wage Act. This also sometimes happens if an employer is using a national payroll service that has not customized its procedures to comply with Massachusetts law.
Like quarterly commissions, this practice has not been historically the subject of litigation, because the amounts owed for wages paid a day or two late were so small. Now, however, all employers should carefully review their payroll cycles to make sure employees are regularly receiving their pay within six days from the end of the last payroll cycle. Failure to do so could result in paying triple those late wages, even if they were paid shortly after the deadline.
Like quarterly commissions, this practice has not been historically the subject of litigation, because the amounts owed for wages paid a day or two late were so small. Now, however, all employers should carefully review their payroll cycles to make sure employees are regularly receiving their pay within six days from the end of the last payroll cycle. Failure to do so could result in paying triple those late wages, even if they were paid shortly after the deadline.
Pursuing a Wage Act Claim After the Reuter Decision
The Reuter decision does not change the basic process for pursuing a Wage Act claim. You still have to first file a complaint with the Massachusetts Attorney General's Office and receive a right to sue letter before filing a civil claim in court.
What is different is that you now have an opportunity to try to resolve the matter with your employer without filing a complaint or risking the loss of triple damages. This is because payment before filing the complaint no longer gets the employer free of those damages. It may make sense to file anyway, depending on the circumstances. You may, however, be better able to reach a resolution with your employer if you have not yet filed a public complaint against them.
What is different is that you now have an opportunity to try to resolve the matter with your employer without filing a complaint or risking the loss of triple damages. This is because payment before filing the complaint no longer gets the employer free of those damages. It may make sense to file anyway, depending on the circumstances. You may, however, be better able to reach a resolution with your employer if you have not yet filed a public complaint against them.
Attorneys Fees in Wage Act Cases
Another thing that is unchanged by the Reuter decision is the employer's liability for the employees costs and legal fees if the employee is successful in their claims. This means you should not have to worry about whether you can afford to maintain a legal claim against your employer. It also provides additional incentive for the employer to reach a settlement with you to avoid the costs of their lawyers and yours too.
How Our Wage and Hour Lawyers Can Help
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If an employer withholds your wages, it’s a serious offense that not only breaks the law but causes stress and anxiety for you. This is why the laws are so strict, and impose such severe penalties on employers. The law recognizes that all workers depend on their wages to live their own lives, pay their bills, and take care of their families.
We can help you protect those rights and recover the money that is owed to you. 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.
We can help you protect those rights and recover the money that is owed to you. 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.
