Mass SJC: Late Wage Payments are Lost Wages Subject to Treble Damages

If your employer does not pay your earned wages on the date they are due, you are immediately entitled to triple damages on the late amount. If you are terminated, all wages, including vacation pay, are due on the date of your termination. If you resign, all wages are due on the next regular pay day. Also, if you are still employed and your pay is late, you also have the right to treble damages.

I am highlighting this because today the Supreme Judicial Court issued its long-awaited decision in Reuter v. City of Methuen, SJC-13121 (April 4, 2022). In the case, the Methuen had terminated Ms. Reuter’s employment but had failed to pay her accrued vacation pay in the amount of $8,952.15 on that same day. Three weeks later, Methuen paid the outstanding vacation pay. After Ms. Reuter employed a lawyer, Methuen paid her an additional $185.42, representing interest on the late-paid amount. Ms. Reuter (hereinafter “plaintiff”) brought a lawsuit for the late payments, arguing that she was owed treble damages on the late-paid amount. After the trial court ruled that she was not entitled to extra damages (in other words, in light of the vacation pay that was paid late, an additional $17,904.30), the plaintiff appealed.

Massachusetts’ highest court agreed with the plaintiff, holding “that ‘lost wages’ encompass all late payments under the Wage Act.” Id. at 11. The SJC noted that, “The
Legislature has chosen the stick rather than the carrot to encourage compliance with the act and to address a history of nonpayment and wage theft.” Id. This is a significant win for employees who have been fired and not paid all their due wages on that same day. (Employees who resign must be paid on the next, normal pay period, not the same day). Given language in a case penned by highly-respected former justice, Ralph Gants (now sadly deceased), litigants and courts had grappled for many years with the uncertainty about how late wage payments might affect Wage Act rights. See Dobin vs. CIOview Corp., Mass. Sup. Ct., No. 2001-00108 (Middlesex County Oct. 29, 2003). However, today the SJC settled that debate. An employer must pay all wages, including earned but unused vacation pay, on the same day that it involuntary terminates an employee, even if employee wrongdoing is alleged.

We extensively handle these cases. If you have been paid wages late within the past three years, or if your employment was terminated, and you weren’t paid all your earned wages on that day, feel free to reach out to us for a free case evaluation.