Massachusetts SJC Takes Interest in Wage Act Claims

On June 26, 2017, the Massachusetts Supreme Judicial Court issued its decision in the case of George, et. al. v. National Water Main Cleaning Company, which addressed the question of whether statutory prejudgment interest is available for claims brought under the Massachusetts Wage Act. The underlying case involved a class action brought by a group of employees against their employer for nonpayment of wages. The SJC, which heard the case as a certified question of law from the United States District Court for the District of Massachusetts, held that interest should be added to the amount of lost wages and other benefits awarded as damages, but not to the additional amount of the award arising from the trebling of damages under the statute.

In issuing its decision, the Court considered the legislative history of the Wage Act and its damages provisions. In particular, it noted that in 2008, the statutory interest language was amended to make treble damages mandatory as “liquidated damages.” The debate between the parties was whether the characterization of the damages as “liquidated” precluded the application of statutory prejudgment interest. The Court found that it did not, holding that to interpret “liquidated” in a way that would preclude prejudgment interest would be to impliedly repeal the interest statutes. Instead of taking such a drastic measure, the Court found that the two statutes could be read in harmony by applying prejudgment interest only to the portion of the award reflecting lost wages and benefits, not to the portion reflecting liquidated damages.

Although the Court’s holding means employers won’t be hit with interest on the treble damages portion of a Wage Act claim, Massachusetts employers should still take great care to comply with the requirements of the Wage Act in order to minimize potential liability.

– Lauren Corbett

blf-badge-2017Beck Reed Riden LLP is Boston’s innovative litigation boutique. Our lawyers have years of experience at large law firms, working with clients ranging from Fortune 500 companies to start-ups and individuals. We focus on business litigation and labor and employment. We are experienced litigators and counselors, helping our clients as business partners to resolve issues and develop strategies that best meet our clients’ legal and business needs – before, during, and after litigation. We’re ready to roll up our sleeves and help you. Read more about us, the types of matters we handle, and what we can do for you here.

 

 

Massachusetts Considers Paid Family and Medical Leave

State houseThis week, the Massachusetts legislature’s Joint Committee on Labor and Workforce Development is conducting hearings on Paid Family and Medical Leave legislation (HB 2172 and SB 1048).

The goal of the legislation is to protect workers from losing their jobs if they take time off because of their own serious illness or injury, to care for a family member who is seriously ill or injured, or to care for a baby. According to a version of the legislation pending in the Massachusetts House, the maximum weekly benefit would be set at $650, and the Senate version would set a $1,000 weekly cap. Both versions of the bill require the payments to be financed at least in part by employer contributions. The legislation would require employers to offer employees up to 26 weeks for temporary disability leave and 16 weeks for family care.

Opponents of the legislation argue that it would be too expensive, overly bureaucratic, and that a funding mechanism may be unconstitutional.

In an Op-Ed appearing in the Fall River Herald News, the Bristol County Chamber of Commerce expresses concern that the Massachusetts legislation would rely on an untested, employer-funded model for this employee benefit:

While four other states, which include Rhode Island and New Jersey, have enacted medical and family leave provisions, their programs are strictly funded by employee payroll deductions. No state in the United States mandates that employers must pay for employee medical and family time off. Massachusetts would be the only state to place such an incredible financial burden on its own businesses.

The prospects for this legislation are uncertain. A similar paid family and medical leave bill passed the Massachusetts Senate last year, however, the bill failed to advance to the Governor’s desk. Senate President Stan Rosenberg has reportedly made passage of the legislation by both sides of the legislature a priority for the current legislative session.

Beck Reed Riden LLP is Boston’s innovative litigation boutique. Our lawyers have years of experience at large law firms, working with clients ranging from Fortune 500 companies to start-ups and individuals. We focus on business litigation and labor and employment. We are experienced litigators and counselors, helping our clients as business partners to resolve issues and develop strategies that best meet our clients’ legal and business needs – before, during, and after litigation. We’re ready to roll up our sleeves and help you. Read more about us, the types of matters we handle, and what we can do for you here.