The Massachusetts Wage Act seeks to enforce employee’s right to receive any and all unpaid wages they have earned. It is a strict liability statute and, once a case is filed in court if a violation is proven, the law provides mandatory triple damages and attorneys’ fees. Mass. Gen. Laws Ch. 149, § 150.
Wages are defined as:
- periodic salary or wages earned while employed for a specified period of time
- holiday pay
- vacation pay
- “definitely determined commissions”
The Wage Act applies to various kinds of earned and regularly paid compensation so one should not assume that any kind of unpaid compensation is not covered. It applies to executive and professional salaried employees and not only hourly workers. While such professional and managerial employees may be “exempt” under federal law, they are not generally under state law except in certain limited categories.
Under the first category, we currently have a case in the Essex Superior Court involving employees whose claims involve unpaid “adjusted salary” going back some time. When salary loss is calculated at triple damages, the sums owed may reach fairly large amounts and interest runs at 12% on any judgment as provided by statute. It is illegal to off-set an employee’s wages in order to cover costs. Camara v. Attorney General, 458 Mass. 756 (2011).
Commissions are often disputed, but protected if commissions are owed and definitely determined. September 2013 update: A Superior Court case explains that real estate sales persons who must be licensed and work under real estate brokers may be either agree to be employees or Independent Contractors. Only if they are employees may they make commission claims under the Wage Act and make the real estate brokerage firm liable for three times any unpaid commission and attorney’s fees. They still have contract claims for unpaid commission amounts.
Despite there being only four basic categories of wages, there are a variety of ways employers may violate the Wages Act. Employers and employees need to be vigilant to observe the Wage Act requirements. Common violations include:
Working Off the Clock:
- Unrecorded time
- Time at the start or end of the day putting on or taking off uniforms and equipment
- Working through lunch
- Time spent on hand-held computing devices, work from home, etc.
- Averaging overtime over two weeks
- Not including all forms of compensation in computing regular rate of pay
- Comp time issues: Improperly substituting it for overtime for non-exempt or excessive build-up/lack of accountability.
- Non-exempt overtime
Under the overtime provisions, employers must pay employees at a rate of one and one-half the employee’s regular hourly wage for working more than forty hours in one week, unless they are otherwise legally exempt.
The Wage Act covers tips, even if they are paid curbside at airports, to bellhops, in restaurants, and even “tips jars”. Common violations include:
- Illegal pooling/sharing arrangements;
- Unlawful retention by employer.
A U.S. Court of Appeals in Massachusetts recently held up the judgment of a case involving Starbucks’ practice of pooling their baristas tips and splitting them with everyone, including management. Management is not considered wait staff, violating the wage law, and Starbucks now owes its baristas (present and former) more than $14 million in unpaid tips, plus 12% interest.
The time limit for claims on unpaid wages is three (3) years, or six (6) for contract claims, but a complaint needs to be filed with, and authorized by, the Attorney General first. Even if an employee declines wages, the employer is still responsible for them. Dobin v. CIOview Corporation, Mass. Super. 291 (2003).
While the definitions and individual situations may raise issues, there is a simple conclusion to draw from this. As an employer, always properly classify and pay your employees. As an employee, seek counsel if you are owed compensation. If in doubt, seek advice from an employment lawyer.