The coronavirus (COVID-19) pandemic has upended life in the Commonwealth, causing serious health problems, mass layoffs, and fundamentally changing our day-to-day lives. While many “non-essential” employers have shuttered in response to Governor Baker’s COVID-19 order, many employers remain open because they constitute “essential” businesses. And while these employers may continue to operate and bring in revenue, some are delaying or deferring all or part of the wages due to workers until the economy is on better footing. For example, some employers are lowering employee’s pay with the promise that they will make up the difference at some later date or even delaying the payment of previously earned wages altogether. This is illegal.
The Massachusetts Wage Act, M.G.L. c. 149, s. 148 protects employees’ earned wages. For most employees, the statute requires that employers pay them all of their earned wages within six days of the pay period in which the wages are earned. The statute also contains a provision that makes it illegal to make any agreement to get around this timing requirement. In other words, even if an employer and employee agree to delay payment of earned wages beyond six days after the closing of a pay period, that agreement is not enforceable. A case from 2003 decided by then-Superior Court Judge Ralph Gants (now Chief Justice of the Supreme Judicial Court) illustrates this point.
In Dobin v. CIOview, Plaintiff Amy Dobin worked in a management position for CIOview, earning a salary of $75,000 per year. For months, CIOview timely paid Ms. Dobin her salary. Later, however, the company began experiencing financial difficulties. While the parties disputed the specifics of what happened next, ultimately, Ms. Dobin agreed to defer her salary on CIOview’s promise that, when the company’s finances improved, her salary would be the first thing paid after rent and utilities.
One key issue before the court was whether or not the agreement to defer Dobin’s salary was lawful in the first place. Judge Gants held that it was not. As he reasoned, Ms. Dobin’s wages “continued to accrue during the time she went without pay. Instead, the deferral agreement between Dobin and CIOview simply attempted to postpone the moment payment became due for the wages she had already earned, based on the financial ability of the company to afford those wages, which is precisely what the unambiguous language of the Wage Act forbids.” In short, even when an employee agrees to delay or defer wage payment, this is illegal.
If your employer is delaying or deferring your wages due to the COVID-19 pandemic or for any other reason, feel free to contact us for a free consultation.