Triple Damages now Mandoatory in Wage Cases

Massachusetts Law now Requires Judges to Triple the Damages Awarded to Employees who aren’t Paid Wages Due them on Time, Raising the Threat of new Lawsuits and Forcing Employers to Revisit Policies to Minimize Risks

Pay your employees what you owe them, when you owe them, or pay them triple.

That’s the message the state legislature delivered to employers in April 2008 when it passed a law that mandates the tripling of damages to workers who don’t receive wages owed to them on time. The statute makes no provision for honest errors and leaves no flex room for judges. Under its plain terms, an employee who prevails in a lawsuit for the payment of wages must be awarded triple the amount due regardless whether the employer acted willfully or simply made a mistake.

The harsh and unforgiving penalty forces employers to review their pay policies, both as drafted and applied, to be sure they comply with the law. Even relatively small wage cases may now be fodder for lawsuits. Not only will winning employees get much higher cash awards in court, they’ll automatically be reimbursed by the losing Defendant for all costs and legal fees they incurred in the collection action.

For these reasons, employers must be certain they know what to pay their workers and when. Strict policies should be implemented and followed closely to ensure errors do not occur. In drafting and communicating workplace pay rules, employers should review relevant laws and ensure they comply with them in all respects.

This is easier said than done. The state’s wage laws are numerous and sometimes require expert interpretative assistance. Under the Wage Act, for example, accrued but unused vacation time counts as wages when an employee quits, and determining what is accrued can be tricky. So, too, can the determination of what constitutes a commission, which qualifies as wages under the law. Under overtime laws as recently revised, figuring out who gets time-and-one-half and when isn’t always easy, either.

In the past, many employers stumbled on issues like these. The result: very large verdicts in favor of former employees. In 2004, for example, an employer who fought a vacation pay claim for a few thousand dollars paid more than $50,000 after a jury found against it. The case arose under the Wage Act, which most judges then read as requiring the award of triple damages to successful employees.

In 2005, however, the state’s supreme judicial court told judges they could no longer read the law in this fashion. What seemed then to be a good decision for employers – there is no question that, since 2005, the incentive for employee wage claims has diminished – now turns out to be a very bad one. The new triple damages law not only returns mandatory awards to the Wage Act, it affects several other statutes as well.

For most employers, the key areas to watch out for are weekly wage payments, minimum wages, and overtime pay. There’s now no doubt that transgressions of these laws mean automatic triple damages and legal fees for employees. More lawsuits will surely be filed as a result, and employers must prepare in advance.

The new law takes effect in July and could be applied retroactively. It comes closely on the heels of an executive order from Gov. Deval Patrick creating a task force aimed at cracking down on the exploitation of workers in the Commonwealth.

By Attorney Jack K. Merrill - Framingham, MA Employment Lawyer

Attorney Jack K. Merrill is a Massachusetts employment lawyer and specializes in employment law and civil litigation. He counsels small businesses and individuals on discrimination cases and other employment related legal matters. 

With law offices in Framingham, Massachusetts and Milford, Massachusetts, our employment law lawyers provide legal services to employees, employers and businesses throughout the Boston metro west and Worcester County region including Ashland, Dedham, Framingham, Franklin, Hopkinton, Maynard, Marlborough, Milford, Natick, Needham, Newton, Shrewsbury, Sudbury, Waltham, and Worcester, Massachusetts.