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Many state wage-and-hour laws require that employers adhere to strict time requirements regarding payment of compensation owed upon termination, but the Massachusetts high court recently took that to another level. In a recent decision, the Massachusetts Supreme Judicial Court, unanimously departed from Massachusetts law when it held in the decision Reuter v. City of Methuen (Reuter) that an employer was liable to a terminated employee for three times the amount of delayed vacation pay that was paid before the employee filed a lawsuit for wage payments due. Prior to the Reuter decision, Massachusetts courts uniformly awarded as liquidated damages treble the amount of interest on late wages paid before the filing of a complaint. The ruling places a heavy burden on employers to ensure that employees who are involuntarily terminated are paid all wages and compensation owed on the date of termination.
The Massachusetts Wage Act
The Massachusetts Wage Act provides that “any employee discharged from such employment shall be paid in full on the day of his discharge.” The Act further defines wages to include “any holiday or vacation payments due an employee under oral or written agreement.” With regard to remedies, the Act provides that an employee may initiate a civil action against an employer who violates the Act and pursue claims:
for injunctive relief, for any damages incurred, and for any lost wages and other benefits…. An employee … who...
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