The Massachusetts Supreme Judicial Court (SJC) recently made clear that under Massachusetts Wage and Hour Law, an employer must pay out a terminated employee, including any earned vacation time, on the same day that the employee is fired. Under the ruling, if an employer is late with that payment, it is equivalent to not paying the wages at all and a violation entitles the employee to triple damages of the amount they were owed.
Reuter v. City of Methuen
In Reuter v. City of Methuen, the SJC looked at the all-too-common practice of an employer deciding to terminate an employee but not being prepared to issue their final check on the same day they are being fired. In Reuter the employee would not receive their final check of about $9000, which included unused vacation time, until about three weeks after they were terminated. The Court looked at the Massachusetts Wage act G. L. c. 149, § 148 (Section 148) which mandates that when an employee is involuntarily terminated, the employer must provide the employee’s final wages and the balance of any unused vacation time on the day the employee is terminated. It was undisputed that the City violated the Act by waiting three weeks to pay the final check so the issue before the Court was how damages should be calculated. Under the Wage act employees who succeed are entitled to treble damages (a tripling of the amount) along with costs and attorney fees. Earlier precedent indicated that an employer was only responsible for triple the amount of interest if they corrected their mistake and issued a check before the employee filed in Court.
In its ruling the Court was clear, the law is for the protection of the employees, “who are often dependent for their daily support upon the prompt payment of their wages.” Because of the potentially severe financial consequences of even a minor violation, it imposes strict liability on employers who must “suffer the consequences of violating the statute regardless of intent”. The remedy for late payment is not tripling interest charges but tripling the entirety of late wages owed to the employee.
“The remedy for late payment is not tripling interest charges but tripling the entirety of late wages owed to the employee.”
The Court does note and continues with the distinction in the act that employees who are terminated are due their check their final day, but employees who voluntarily leave, such as if they quit, are due their final check on the next regular pay day. The Court noted that an employer can control when an employee is fired, and thus can be prepared to issue their final check. However, they do not have that luxury when an employee decides to leave.
This is a clear win for employees and holds employers accountable to ensure they have everything in place prior to a termination. Cronin Law PC has been involved in similar disputes to Reuter and if you or someone you know did not receive their check on time, or has any issue regarding their wages or employment, give us a call today at 617 213-6883 for a no cost consultation.