Archives for July 2015

Superior Court Ruling Reminds Employers to Quickly Pay Wages Owed to Departing Employees

A recent superior court decision reminds employers how important it is to be sure that departing employees receive all the wages they earn, and fast. It also makes the point that, even if the payment requirements of the Massachusetts Wage Act are violated, correcting such a mistake can dramatically reduce the risks that an employer will suffer the rather draconian penalties of the Act.

The Wage Act requires employers to pay fired employees all the wages they are owed on the date they are let go. For those who quit, wages must be paid on the next regular pay date. Failure to do so exposes employers to mandatory triple damages — that is, three times the amount of the unpaid wages — along with reimbursement of a former worker’s legal fees. The Act provides that employers cannot defend against a triple damages claim by paying wages due “after the bringing of the complaint.”

Because the Wage Act requires employees to first file complaints for unpaid wages with the Massachusetts Attorney General, the meaning of this phrase is a bit foggy. In the case Littlefield v. Adcole Corp., the employee contended, as many do, that filing with the AG triggers the triple damages provisions of the Act. As of that date, he had not received his wages, which were later paid prior to the date he filed his superior court suit. Still, the employee argued, he was entitled to triple damages because payment was made after his AG complaint was filed. Rejecting this contention, the court found that the employer is not required to pay triple the wages due and instead is liable only for triple the amount of interest lost by the employee during the period of delay of his wage payment. In so doing, the court interpreted the Act to require payment in full before a civil lawsuit is filed.

Proposals to Bar Noncompetition Agreements Make Little Progress in State Legislature

Proposed bills that would ban the enforcement of noncompetition agreements continue to be considered by the Massachusetts Legislature, though little progress has been made toward their approval. One proposed measure would ban the covenants while permitting non-solicitation restrictions as to customers and employees along with other covenants that often appear alongside competition limitations. Another would simply make unlawful “any contract that serves to restrict an employee or former employee from engaging in a lawful profession, trade, or business of any kind” while permitting employers to enforce agreements that protect trade secrets. Both proposed bills along with a third that would enact the Uniform Trade Secrets Act are currently being considered by the Committee on Labor and Workforce Development.

Massachusetts Sick Leave Law Takes Effect Today

Effective today, July 1, 2015, all Massachusetts employees enjoy guaranteed sick leave benefits. The law that was approved by voter referendum last November mandates that every employee receive one hour of accrued sick leave for every 30 hours of work. The leave can be used for a variety of purposes — including worker or family illness, medical appointments, and dealing with domestic violence — and must be paid by employers with 11 workers or more. It is enforced by the Massachusetts Attorney General, which recently issued final regulations, a mandatory workplace poster, and a draft policy for employers to implement. Those materials can be found on the AG’s website at www.mass.gov.

Employers who have not implemented written policies that comply with the statute should do so promptly. The law was incorporated as a new section of the Massachusetts Wage Act, which provides substantial penalties for violations. It is illegal to refuse to provide sick leave, to require documentation under most circumstances, or to punish workers for using it. Employees can use leave in increments as small as one hour at a time. Though they are prohibited from abusing leave, employers should move cautiously before disciplining employees for improper sick leave usage.