On April 14, 2008, the mandatory award of treble damages for wage and hour claims became the law in Massachusetts. The new law – which was opposed by Governor Patrick (but who did not veto it) and much of the business community – is of concern to employers of all sizes because it provides for no exceptions. Accordingly, even employers who act in good faith but inadvertently run afoul of wage and hour laws, will be subject to the penalty. Successful plaintiffs pursuing wage and hour claims under Massachusetts law will now receive three times their actual damages. This is in addition to the existing requirement that employers pay successful plaintiffs their reasonable attorneys’ fees.
This change has far-reaching applications. It extends to the laws requiring timely payment of wages to employees and to the laws governing the payment of minimum wage and overtime. It also covers other Massachusetts wage and hour laws, including laws around tipping. These laws cause tricky compliance issues for employers and it is not uncommon for employers, who are trying to do the right thing, to find themselves on the wrong side of the law. As a result, even employers who think they are in compliance with the wage and hour laws should audit their practices to be sure they do not inadvertently expose themselves to liability. The danger is especially acute in light of the recent wave of class action wage and hour litigation focusing on the improper classification of employees (exempt when they should be non-exempt) and challenging the tip pooling practices of the service industry.
The Massachusetts Legislature, in enacting the new law (Senate Bill 1059), stated that the law was intended to clarify existing law, rather than make new law. Massachusetts courts had previously considered the issue of treble damages to be within their discretion. If Massachusetts courts agree that the change simply clarifies the law, it will apply retroactively to pending claims, although the law itself will not take effect until July 13, 2008.
We expect that the new law will provide an incentive for more employees to assert wage and hour claims and may also encourage more wage and hour litigation to be brought in Massachusetts under state law rather than in other states or under federal law.
If you would like more information about this new law or have questions about how to comply with the Massachusetts wage and hour laws, please contact.