The Massachusetts Wage Act allows an employee to recover “wages” that have been “unreasonably retained” by an employer. A salary is within the scope of the statute. What else is considered “wages”? It’s not clear because the term “wages” is not defined. The statute simply provides that the term “wages” includes holiday and vacation time but such enumeration is not exhaustive. Courts have interpreted the term “wages” to mean wages that have been “earned,” as opposed to wages that are contingent on some other fact or are discretionary. For example, accumulated sick days are not “wages” because they are contingent on a specific fact, i.e. the employee being sick. The same is true for bonuses since they are paid at the discretion of the employer. Commissions, however, are generally considered “wages” if they are not discretionary and are the result of the employee’s work, provided that the amount of the commission is definitely determined and due and payable.
Can an employee recover comp time and work-related travel expenses under the Wage Act? The answer is no to comp time but yes to travel expenses according to a recent decision from the federal district court in Furtado v. Republic Parking System, LLC.
“Comp time” is paid time off given to an employee who worked additional hours, above the employee’s normal hours, in lieu of payment for the additional work performed. The plaintiff, Mr. Furtado, worked as a manager for Republic Parking System, LLC until he was terminated in 2019. By the time he was terminated, he had accrued seventy hours of comp time and incurred work-related travel expenses. Republic Parking did not pay Mr. Furtado any of his accrued comp time and only paid a portion of his travel expenses in connection with his termination. Mr. Furtado filed suit against Republic Parking under the Wage Act seeking, among other things, to recover payment for his unpaid comp time and travel expenses. Republic Parking moved to dismiss those claims, arguing that the Wage Act did not apply to comp time and travel expenses. The court agreed with Republic Parking but only with respect to comp time.
In deciding that comp time is not considered “wages” under the Wage Act, the court emphasized that Mr. Furtado was not paid on an hourly basis but instead earned a salary for which he was required to work flexible hours. The court concluded that comp time was not “earned.” Would the outcome have been different if Mr. Furtado had been paid on an hourly basis? The court appears to have left this question open.
As to work-related travel expenses, the court explained that the Wage Act prohibits wage reduction “by any other means.” While “business expenses” are not “earned” and, therefore, are not considered “wages,” an employer cannot reduce wages by shifting the costs of travel business expenses to an employee. Several courts have found that such reduction is a violation of the Wage Act. The court noted that Mr. Furtado was required to travel many miles using his own car while he was working for Republic Parking and ruled that Republic Parking’s failure to reimburse Mr. Furtado for the travel expenses he personally incurred is a violation of the Wage Act because doing so effectively reduced his wages.