Legislature Holds Hearing on Bills that would Rewrite Independent Contractor Law

November 4, 2011 By

A committee of the Massachusetts state legislature held a hearing on November 3, 2011 to take input on 4 pending bills that aim to revise the state’s independent contractor statute. The law has been under fire from some circles due to language that, read literally, essentially bans the use of contractors in Massachusetts. It’s not the first time opposition forces have pressed for rewriting of the law. A similar effort last year was unsuccessful.

The independent contractor law appears at Mass. Gen. L. ch. 149, s. 148B. It requires that all workers be classified as employees unless the employer demonstrates that 1.  the worker is free from control in the performance of daily duties; 2. the work performed is outside the usual course of the employer’s business; and 3. the worker is customarily engaged in an independent business. Its rewriting to this form in 2004 effectively banned the legal use of contractors, since almost no employer can meet the second prong of this three-part test and many cannot meet the other two. [Read more...]

Filed Under: Employee - Employment Law, Employer - Employment Law, Independent Contractors, Massachusetts Wage Act, Wages and Commissions

Wage Act’s Triple Damages Provision is Not Retroactive

October 17, 2011 By

Massachusetts’ highest court has ruled that the 2008 amendment to the state’s Wage Act is not retroactive. As a result, claims involving work that straddles the July 2008 effective date of the rewritten law will be governed by two different standards. For damages related to work that occurred prior to July 2008, a plaintiff employee will be required to persuade the court to double or triple the sum awarded. Any damages for work performed after July 12, 2008 will be automatically tripled by law.

The Wage Act amendment came in response to a 2005 SJC decision that held the award of triple damages under the Act was discretionary, not mandatory as was previously believed by most employment lawyers. Indeed, several lower courts interpreted the old version of the Act to require an award of triple damages. After the SJC concluded otherwise, the Massachusetts state legislature amended Mass. Gen. L. ch. 149, s. 150 to clarify its language and require triple damage awards. The law also requires the award of legal fees to a prevailing employee.

Filed Under: Employee - Employment Law, Employer - Employment Law, Massachusetts Employment Law, Massachusetts Wage Act, Wages and Commissions

Judge Shocks Employment Bar with Narrow Wage Act Ruling

July 5, 2011 By

In a decision that can be described as nothing less than shocking to many in the employment law arena, a superior court judge has held that the Massachusetts Wage Act does not apply to limited liability companies (LLC) in the same way it covers corporations. Applying a narrow view of the law’s specific language and rejecting the implications of her decision, Judge Bertha Josephson concluded that managers of LLCs are not personally on the hook in the way that presidents, treasurers and other officers of corporations are when wages aren’t paid to employees.

The decision, reported in the July 4, 2011 edition of Massachusetts Lawyers Weekly, could have broad and substantial implications. In many wage cases and for very good reasons, employees name individual decision makers as defendants in lawsuits. This helps ensure that employers do not hide behind what may be underfunded or even bankrupt business entities and claim that they do not have the funds to pay what is owed to their workers. Under  Cook v. Patient EDU, LLC, employers might now avoid paying wages via the expedient of forming an LLC or simply closing down the ones they already have. Though the decision comes from the superior court level and is thus not binding on other trial judges, it will likely be cited liberally by defense attorneys until and unless it is overturned on appeal. Given the slow pace of legal cases generally, that could take years and cause substantial difficultiies to employees of LLCs who believe they are owed back wages. [Read more...]

Filed Under: Employee - Employment Law, Employer - Employment Law, Massachusetts Employment Law, Massachusetts Wage Act, Wages and Commissions

WAGE ACT’S REACH EXPANDED BY SUPERIOR COURT JUDGE

February 11, 2011 By

In a surprising decision early this month, a superior court judge entered an expansive reading of the Massachusetts Wage Act that brings severance pay into the law’s ambit. If the thinking of Justice Dennis Curran is adopted by other judges or affirmed by the state’s appeals courts, it will leave employers who don’t make severance payments exposed to the Wage Act’s mandatory triple damages provision, its provision for individual management liability, and its requirement that defendants pay winning plaintiffs for all legal fees they expend.

Justice Curran’s decision came as a surprise because it has been largely accepted among employment lawyers that severance pay issues are not covered by the Wage Act. That law, which requires employers to pay their workers all wages they earn, including commissions, within specific and narrow time frames, appears on its face to apply only to money that an employee earns by appearing at work and performing job duties for his/her employer. Severance pay generally does not fit this description, coming as it does after an employee is terminated or quits and, therefore, after he/she stops coming to work. What’s more, severance is usually conditioned not on work performance but on a waiver of an employee’s rights to sue and other undertakings that have little to do with working. Apparently recognizing these distinctions between severance pay and wages, the state’s Appeals Court — a higher legal authority whose rulings must generally be followed by superior court judges — has already concluded that severance pay is not subject to the Wage Act’s strict penalty provisions. [Read more...]

Filed Under: Employee - Employment Law, Employer - Employment Law, Massachusetts Employment Law, Massachusetts Wage Act, Uncategorized, Wages and Commissions

Misclassifying Workers Can Mean Big, Big Damages

September 23, 2009 By

Employers who misclassify their workers as independent contractors now have even more to worry about. In August, the state’s highest court made clear they could pay huge damages for this transgression of the law, even if they merely made an honest mistake.

In a majority opinion, the Massachusetts Supreme Judicial Court concluded that employers can’t defend an independent contractor classification lawsuit by claiming a worker would have made less money if he/she had been properly classified as an employee. Damages are not measured by the difference between what a worker received and what he would have received as an employee.  Instead,  under the independent contractor provisions of the state’s Wage Act, damages equal the value of “wages and benefits [a worker] should have received as an employee, but did not,” the court wrote. [Read more...]

Filed Under: Independent Contractors, Massachusetts Wage Act, Wages and Commissions Tagged With: , , , , , ,

Court Rulings Pose Risks For Employers

September 17, 2009 By

Massachusetts courts have been busy in the employment arena lately. In Summer 2009, they issued at least three substantive decisions that may force employers to take quick action on policy manuals, arbitration agreements and wage payment policies.

Though none of the decisions change the law outright, each is employee friendly and stretches employer duties to new lengths. The cases make it easer for workers to use employment manuals as binding contracts, harder for employers to force arbitration in discrimination cases, and more likely that employees will win big damage awards plus legal fees in disputed wage cases.

Employment Manuals In a June 2009 opinion, the district court’s appellate decision affirmed a $42,000 jury verdict for a worker who claimed his company’s employment manual was breached when he was fired. The court relied heavily on the worker’s testimony that he regarded the manual as binding and honored a non-compete clause contained within it. The court also cited to the employer’s request that the employee acknowledge receiving it. [Read more...]

Filed Under: Discrimination, Employer - Employment Law, Massachusetts Employment Law, Massachusetts Wage Act, Wages and Commissions, Wrongful Termination Tagged With: , , , , , ,

Massachusetts Employment Law: How To Let Your Workers Go

June 9, 2009 By

One thing Massachusetts employers must understand is that you are free to do as you see fit with your employees. You can let them go for any reason, at any time, with or without cause. An employer does not need to be concerned about lawsuits as long as they have covered these three basic areas:

  1. Be sure your employees do not have contracts.
  2. Make sure you don’t discriminate against your employees. You need to look at how a worker was treated and whether or not he or she has made prior claims of discrimination. If they have made claimes, be careful,  retaliation is a viable cause for action.
  3. Pay them all wages they have earned and all money owed to them immediately.

For more discussion about “How To Let Your Workers Go“, watch my video:

If you have questions about an employee or any issue regarding Massachusetts employment law, consult an qualified Massachusetts employment lawyer before you take action.

Boston employment lawyer, Attorney Jack Merrill provides legal services to employees and employers throughout the Boston metro and Worcester County region including Ashland, Dedham, Framingham, Franklin, Hopkinton, Maynard, Marlborough, Milford, Natick, Needham, Newton, Shrewsbury, Sudbury, Waltham, and Worcester, Massachusetts.

Filed Under: Employer - Employment Law, Massachusetts Employment Law, Video on Employment Law, Wages and Commissions, Wrongful Termination Tagged With: , , , , , ,

Employers Beware: Pay Wages on Time

May 14, 2009 By

If there’s one thing Massachusetts courts are making clear lately, it’s that employers better pay their employees what they earn, and they’d better do it on time. They are slapping those who don’t with triple damage awards, adding 12 percent interest, and ordering them to pay their employees’ legal fees. When the bill comes due, employers have good reason to question both their own judgment and that of the well-paid lawyers who advised them.

The Massachusetts Wage Act now says that triple damage awards to employees are mandatory. Workers who don’t get what’s owed to them on time also get their lawyer fees paid by the company. Courts are running hard on these points, showing little sympathy for employers, even those who make good faith errors, and interpreting gray areas in favor of employees. Employers need to understand this and get good legal advice before withholding disputed wages.

In a case I recently tried, Countrywide Home Loans was ordered to pay my client more than $130,000 after refusing to give him deferred bonuses and commissions that totaled about $30,000. In another case, a local attorney was ordered to pay $519,000 plus interest after he failed to pay a referral fee to another lawyer. In both of these cases, the law was read expansively to favor the plaintiff. The message to employers is clear: when in doubt, settle wage disputes or just pay what’s due to your employees. And, by the way, make sure the lawyer you rely on is well versed in this area of law.

Massachusetts employment lawyer Attorney Jack Merrill provides legal services to employees, employers and businesses throughout the Boston metro west and Worcester County region including Ashland, Dedham, Framingham, Franklin, Hopkinton, Maynard, Marlborough, Milford, Natick, Needham, Newton, Shrewsbury, Sudbury, Waltham, and Worcester, Massachusetts.

Filed Under: Employee - Employment Law, Employer - Employment Law, Massachusetts Employment Law, Massachusetts Wage Act, Wages and Commissions Tagged With: , , ,