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Thursday, April 22, 2021

Not Giving a Terminated Employee their Final Pay on the Day of Termination Can Lead to Triple Damages and an Award of Attorney’s Fees

Massachusetts wage and hours laws provide employers with guidance as to how, when, and how much workers must be paid.  One common issue that arises is when and what employees that resign or are terminated need to be paid.  Generally speaking, an employee is voluntarily quits or resigns may be paid on the next regular pay date after his or her last day of work but an employee who is involuntarily terminated must be paid in full on the day of discharge.  Failing to adhere to these rules can have significant consequences.

Massachusetts General Laws chapter 149 § 148 states “any employee discharged from such employment shall be paid in full on the day of his discharge.”  The rule further states that any earned vacation pay due “under an oral or written agreement” and any commissions that is “definitely determined and has become due and payable.”  Employers sometimes have poorly drafted vacation policies where an employee is entitled to vacation time on their work anniversary or another identified time period. Under even these policies, employees are still entitled to be paid for all their vacation time.  However, accrued and unused sick time does not count as “wages” under the Wage Act, Massachusetts General Laws chapter 149 § 148, 150.

It is important to note that this rule is true for any employee who is on site when they are terminated.  Employees that are terminated from a job and not paid on the same day should obtain some form of evidence that they were fired and did not quit (including a termination letter or an acknowledge correspondence stating that the employee was involuntarily fired).  If the employer refuses to provide this, then the employee should make note of anyone who could serve as witnesses.  If you are terminated while away from your place of employee, it is recommended that you respond in writing (an email being the fastest option and generally better than a text message) and ask for your final pay immediately.

Of note, employers cannot enter into an agreement with an employee to exempt the employer from adhering to any provision of the Wage Act.  Also, the employer’s own “financial distress” does not excuse delayed payment of employee wages.

The important question than becomes, what are the consequences if an employer fails to adhere to the strict payment guidelines of Massachusetts General Laws chapter 149 § 148?  A violation of the Wage Act entitles employees to an automatic tripling of damages plus attorney’s fees.  That is why if an employee is terminated and not given their full final pay, the employee should contact an employment attorney immediately.  Employers with questions on the Wage Act should also contact an employment attorney immediately (or, at the very least, before terminating any employees).

Some employers believe that if they fire an employee on a Monday but pay them on a Tuesday, it is no big deal.  However, that is not correct.  The Wage Act, MGL c.149, § 148, "says what it means and means what it says... An employee who does not receive her due wages by [the day of her discharge] - even an employee who is paid in full a day later - suffers a cognizable injury within the purview of the statute."  Lawless v. Steward Health Care System, LLC, 894 F.3d 9 (1st Cir. 2018).

If you have questions regarding the Massachusetts Wage Act or employer/employee rights, please contact the Law Offices of Samuel S. Reidy for a free consultation.

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