Client Advisory - Massachusetts Becomes First in Nation to Mandate Triple Damages for Employer Wage and Hour Violations Under New Law  April 2008

Timothy P. Van Dyck, David P. Mason

Client Advisory PDF & Printable Version

On April 14, 2008, the Massachusetts legislature enacted a highly controversial bill that will amend Massachusetts' wage and hour laws to require courts to award treble damages-three times the amount of actual damages-to any employee who prevails in an action under the Commonwealth's complex wage and hour statutes. This bill faced substantial opposition from the business community and Governor Deval Patrick was on the record as opposing the bill, believing it was unfairly punitive to businesses. The Governor did not sign the law, but he also did not veto it. Therefore, the law will go into effect 90 days after its passage, on July 13, 2008.

This legislative change represents a major shift in the landscape of wage and hour litigation in Massachusetts. Under this law, Massachusetts becomes the only state in the nation to mandate an award of treble damages for all employer wage and hour law violations. Previously, Massachusetts courts had interpreted the wage and hour statutes as providing for a discretionary award of treble damages in cases where the employer's violation of the law was egregious. Therefore, employers had been able to avoid multiple damages, as they can under federal overtime and minimum wage statutes, by demonstrating good faith attempts at compliance with the law. No longer. Employers will now be subject to treble damages if they are found to have violated the wage and hour laws, regardless of whether their violation was inadvertent or they attempted in good faith to comply with the law.

The Massachusetts wage and hour laws impact a broad range of an employers' compensation practices. The application of the wage and hour laws is beyond the scope of this Advisory, but employers should be aware that those laws have provisions that apply generally to prescribe minimum wages, overtime pay (and exemption of certain employees from overtime pay), classification of workers as employees or independent contractors, timely wage payment, payment of incentive compensation (such as bonuses and commissions), and tip payments.

This change in the law will provide even greater leverage to employees bringing wage and hour claims under Massachusetts law. Since all violations of the wage and hour statutes will lead to three times the actual damages an employee suffered, and because prevailing employees are already entitled to recover attorneys' fees and litigation costs, it is likely that litigation under these statutes will increase. Massachusetts has recently seen an uptick in wage and hour class actions, a development that will likely continue and grow given the new availability of automatic treble damages.

Due to the likelihood of increased litigation and the fact that any wage and hour violation will lead to treble damages, employers should be vigilant to wage and hour issues and should review their wage and hour policies and employee classifications for compliance with federal and Massachusetts law. Massachusetts' wage and hour laws are complex and can often be confusing to employers. Therefore, employers who have any concerns about whether their wage and hour practices comply with Massachusetts law are urged to contact the Edwards Angell Palmer & Dodge lawyer responsible for their affairs or any member of the firm's Labor and Employment Practice Group.