Massachusetts Firms Owe Treble Damages for Delayed Wages, State’s High Court Says

Massachusetts law requires that an employer who is late with wage payments to a fired employee must pay three times the late wages and benefits in damages, not just treble interest, the state’s high court has said.

A trial judge had concluded that treble interest was the proper measure of damages for an employer failing to make the payments to a discharged worker on the same day the worker was fired as required under the state’s wage act.

The state’s Supreme Judicial Court in an opinion issued Monday corrected the trial court, pointing out that its interpretation is unsupported by the language of the statute and inconsistent with its purpose. “There is no language in the statute in any way suggesting that the payment of interest is the proper remedy for violation of the act,” the court wrote.

The supreme court transferred the case from the appeals court on its own initiative to address the question of the proper damages for wage act violations when the employer pays wages after the legal deadline but before the employee files a complaint.

According to the facts of the case before the justices, on the day the plaintiff, Beth Reuter, was discharged from employment, her employer, the city of Methuen, owed her $8,952.15 for accrued vacation time. Rather than pay this amount on the day of her termination, as called for by the wage law, the defendant paid her three weeks later. After a demand from the plaintiff’s lawyer over a year after that, the defendant paid the plaintiff a further $185.42, which represented the trebled interest for the three weeks between the plaintiff’s termination and the payment of the vacation pay.

The plaintiff sued. According to the plaintiff in her complaint and the court in its ruling, the issue was not whether the city violated the wage act in failing to pay the plaintiff for her vacation time on the day she was fired — it clearly did. Rather the issue was what was the appropriate penalty under the law.

For discharged employees the statute is clear: “any employee discharged from such employment,” such as the plaintiff, “shall be paid in full on the day” of discharge.

“The statute leaves no wiggle room. Payment, including vacation pay, is to be made in ‘full’ on the ‘day’ of the discharge,” the opinion stresses.

The statute also defines “wages” to include “any holiday or vacation payments due an employee” under an oral or written agreement. “Combined, these two provisions make clear that a terminated employee is entitled to all accrued vacation benefits on the day of discharge,” the court continued.

The court acknowledged there might be some ambiguity in the term “lost” since a late payment is not the same as a lost payment. “This language, however, must be read with the over-all context and purpose of the act in mind,” said the court, noting that the act is directed at prompt payment of wages. Since any delay may have “severe consequences for employees,” and the statute does not “tolerate or in any way condone delay,” lost wages must be read as encompassing all late payments under the wage act.

Furthermore, said the court, the remedy is also explicit in the law: the employee “shall be awarded treble damages, as liquidated damages, for any lost wages and other benefits.”

According to the high court, this means an employer is responsible for treble the amount of the late wages, not trebled interest. The plaintiff is also entitled to attorney’s fees and costs.

Topics Massachusetts