If any a company fails to pay an employee, then the employer, pursuant to the Massachusetts Wage & Hour Act (Chapter 149, §§ 148 and 150), may have to pay treble (triple) damages to the employee, plus litigation costs, interest and reasonable attorney’s fees.

While a judge is not obligated to impose an award of treble damages, there have been efforts by plaintiff-side employment lawyers to pass a bill in this regard. As it stands, courts may not issue treble damages if the employer inadvertently failed to pay the worker his wages. Nonetheless, the punitive type damages is an effective disincentive for unscrupulous employers and often facilitates settlement efforts.

In contrast, if the company hires a worker as an independent contractor, then the worker may have a tougher time obtaining multiple damages in the event that the employer fails to honor his contractual obligation to make payments. A Massachusetts Superior Court judge ruled in 2006 (Stein v. Circadian Technologies) that such conduct is a breach of contract, but is not necessarily a breach of the Consumer Protection Statute (commonly known as Chapter 93A), which provides for remedies similar to the Wage & Hour Act.

It is worth noting that in the Stein v. Circadian Technologies case, the worker would not automatically have been entitled to treble damages even if the failure to pay was intentional because commissions are sometimes not wages as that term is defined by the Wage & Hour Act.

In the end, it can be argued that a worker who is employed as an independent contractor has more protection against the termination of the employment relationship than an ‘at will’ employee, but within the context of unpaid wage claims, an employee is in a far more favorable position than the independent contractor. Of course, whether the worker was properly classified as an employee is another matter entirely, so stay tuned…