At a Glance
- The Massachusetts Supreme Judicial Court recently ruled in favor of a former employee, awarding over $23,000.
- Under the Massachusetts Wage Act employers are required to pay terminated employees on the date they are terminated.
- Employers who fail to pay employees accurately may be subject to treble damages on the full amount, plus interest.
Massachusetts Supreme Court Ruling
The Massachusetts Supreme Judicial Court ("SJC") ruled on Reuter v. City of Methuen on April 4, 2022, ruling in favor of the plaintiff on their wage claim. The Court’s opinion was: “Because of the potentially severe financial consequences of even a minor violation, the [Wage Act] not only ‘protect[s] wage earners from the long-term detention of wages by unscrupulous employers’. but also ‘impose[s] strict liability on employers,’ who must ‘suffer the consequences of violating the statute regardless of intent.’ The statute leaves no wiggle room. The Legislature's command is clear: if you choose to terminate an employee you must be prepared to pay him or her in full when you do so."
The court also recommended that employers who may not have time to run a final paycheck before terminating employment, may consider placing the employee on suspension while the employer calculates the final pay.
Under Massachusetts Law employers are required to:
- Pay most employee wages weekly or bi-weekly.
- Employees engaged in a bona fide executive, administrative or professional capacity and employees whose salaries are regularly paid on a weekly basis or at a weekly rate for a work week of substantially the same number of hours from week to week may be paid bi-weekly or semi-monthly unless such employee elects to be paid monthly.
- Any employee discharged shall be paid wages in full on the day of discharge.
- “Wages'' includes any holiday or vacation payments due an employee under an oral or written agreement.
Employers may want to consider the court's advice when terminating the employment relationship with an employee and consider suspension, if an employer is not prepared to immediately compensate the employee upon termination.
For more information on Massachusetts' wage and payroll tax laws, check out our Massachusetts Wage and Payroll Tax Facts page.
Thank you for choosing Paylocity as your Payroll Tax and HCM partner.
This information is provided as a courtesy, may change and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney or Advisor.