The Massachusetts Supreme Judicial Court recently ruled that an employer who failed to pay a discharged employee for accrued unused vacation time until three weeks after the date of her discharge violated the Massachusetts Wage Act. The Court held that the employer was strictly liable to the employee for treble the amount of her unpaid vacation time, not merely for treble the amount of interest on the delayed payment.
The Wage Act clearly provides that “any employee discharged from… employment shall be paid in full on the day of his discharge.” The statute includes in the definition of “wages” “any holiday or vacation payments due an employee under oral or written agreement.” The remedy for an employer’s failure to comply with the Wage Act is equally clear: the employee “shall be awarded treble damages, as liquidated damages, for any lost wages and other benefits and shall also be awarded the costs of the litigation and reasonable attorneys’ fees.”
In Reuter v. City of Methuen, the employer argued that, because it had paid the discharged employee her full vacation time three weeks after her discharge, at most she was entitled to a trebling of the interest that accrued on the unpaid vacation time between the date of her discharge and the date such “wages” were paid. The Court disagreed, finding that the “lost wages” referred to in the statute encompassed late-paid wages. In so holding, the Court emphasized that the purpose of the Massachusetts Wage Act is to ensure that employees receive prompt payment of all wages owed to them and an employer’s intent in making a late payment of wages is irrelevant. Even if the late payment is an honest mistake or miscalculation, an employer who fails to pay a discharged employee for wages owed on the day of discharge exposes themselves to an award against them of three times the amount of unpaid or late-paid wages and the employee’s attorney’s fees.