A recent Massachusetts federal court decision should serve as an important reminder to employers that the Massachusetts Wage Act can apply even to an individual residing and working in another country, as long as there are sufficient connections to Massachusetts.
In determining whether there are sufficient connections, courts emphasize the day-to-day realities of the working relationship between the employee and employer.
Work without borders
George Serebrennikov sued his former employer, Proxet Group LLC, claiming that the company owed him nearly $600,000 in unpaid salary, bonus, vacation, and unreimbursed business expenses. Under the treble damages and attorneys’ fees provisions of the Massachusetts Wage Act, Mr. Serebrennikov’s potential recovery approached $2 million.
Both parties filed motions for summary judgment, and the key points of contention were whether Mr. Serebrennikov was (1) an employee of the company and (2) was covered by the Massachusetts Wage Act.
The relationship between the parties was complex. Mr. Serebrennikov, who initially resided in Florida, began performing services for Proxet in 2016 as an independent contractor, under written agreements specifying Massachusetts law as controlling. In late 2017, he established a Ukranian subsidiary of Proxnet, in which he took a 25% stake. He also became an employee of the subsidiary, began to work mostly in Ukraine and received a modest salary under an employment agreement with the subsidiary, which provided...
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