SJC issues Wage Act Decision Highly Favorable Decision For Employees

gavel and money

On May 4, 2022, the Massachusetts Supreme Judicial Court just issued a landmark ruling in a Wage Act case in the matter of Reuter v. City of Methuen (No. SJC-13121). The SJC clarified that every violation of the Massachusetts Wage Act triggers the statute’s mandatory multiplier, regardless of whether the employer endeavored to cure the nonpayment of wages prior to the employee bringing the lawsuit.

Under the Massachusetts Wage Act, if an employee is owed unpaid wages, commissions or accrued, unused vacation time, that employee is automatically entitled to treble (triple) wages. Thus, hypothetically, if Jane Doe is owed $15,000.00, she is entitled to $45,000.00 based upon the employer’s violation of the Wage Act.

Prior to this decision, it was understood that an employer could ‘cure’ a non-payment of wage mistake prior to litigation by paying the employee the amount owed, plus treble (triple) the amount of interest (12%) based upon the date payment was due up to the date payment was made.

However, the SJC said that the employer (the City of Methuen) was strictly liable to pay treble (triple) damages on the delayed wages even if the employer makes payment before the employee initiates litigation. The rationale was that if the employer is delayed in making payments or makes a mistake, the burden of a delay or mistake should be born by the employer, not the innocent employee.

Thus, a Massachusetts company can be held liable even if payment of wages is late by one day. While business owners are corporate lawyers are sure to gripe that such an outcome is unduly harsh, it is worth remembering that the Wage Act is designed to protect employees and in virtually every case, there is an uneven power dynamic between the employee and employer.

The author of this blog article does not expect there to be an increase in the amount of Wage Act lawsuits; however, the SJC’s decision in Reuter v. City of Methuen should force employers to place a high premium on compliance with the Wage Act. At some point, we can expect a decision as to whether Reuter v. City of Methuen shall be applied retroactively or prospectively.

If you have any Wage Act questions or concerns, call John Davis at Davis & Davis, P.C.

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