According to an article authored legal eagles at Freeman Mathis & Gary, in the case of Reuter v. City of Methuen, the Massachusetts Supreme Judicial Court (SJC) addressed the appropriate measure of damages when an employer fails to timely pay wages.
The Massachusetts Wage Act requires employers to timely pay wages and provides for automatic trebling of damages when they fail to do so. In legal terms, trebling is the recovery of three times the amount of actual financial losses suffered by the plaintiff.
The SJC was tasked to determine 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 addition, in the case Devaney et al. v. Zucchini Gold, LLC et al., the SJC 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.
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," wrote the authors. "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."
CLICK HERE to read the complete article authored by Freeman, Mathis and Gary attorneys.