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The Massachusetts Supreme Judicial Court (“SJC”) recently issued a pair of decisions clarifying potential damages under Massachusetts’ wage and hour laws. Reuter v. City of Methuen addressed the appropriate measure of damages when an employer fails to timely pay wages. The Massachusetts Wage Act, M.G.L. c. 149, § 150 requires employers to timely pay wages and provides for automatic trebling of damages when they fail to do so. The question for the Court was what are the damages for purposes of trebling? Is it the interest on the unpaid amount or the unpaid wages themselves? Ultimately, the SJC disagreed with the trial court’s use of interest as the appropriate measure concluding instead the late wages are the damages. In reaching its decision, the SJC relied on the legislative intent of the Wage Act noting it is a strict liability statute designed to ensure prompt payment of wages. In other words, the legislature had specifically chosen a stick—in lieu of a carrot—to achieve the statute’s overarching purpose. Thus, even if an employee is fully paid all wages before filing a complaint, the employee is entitled to recoup the amount of any late paid wages, which is automatically trebled.
Shortly after its decision in Reuter, the SJC decided Devaney et al. v. Zucchini Gold, LLC et al., wherein the Court considered whether treble damages under the Massachusetts Wage Act were available where the employer’s liability rested solely on its failure to pay overtime wages mandated by the Fair Labor Standards Act, 29 U.S.C. § 207. The SJC ultimately concluded trebling was not available as the remedy is available only under the Massachusetts Wage Act, not the FLSA. The decision underscores a significant distinction between the relief available under the federal versus state statute.
Understanding which potential damages may or may not be available is critical for any employer facing a wage and hour claim. Moreover, the SJC’s decision in Reuter reinforces the unforgiving nature of the Massachusetts Wage Act and is a stark reminder to all Massachusetts employers of the need to implement best employment practices such as robust record keeping to ensure timely and complete payment upon termination.