[co-author: Savannah Wormley]
Massachusetts employers know the importance of complying with the state’s Wage Act, G.L. c. 149, § 148. Two recent court decisions offer fresh guidance to help employers achieve compliance, including around paying PTO upon separation of employment and regarding the Wage Act’s reach beyond state borders.
Siedel et al. v. GPM Investments, LLC
The Siedel case presented a question of first impression for the Massachusetts Superior Court: whether an employer with a single “annual leave” PTO policy may designate a fixed number of hours as vacation time for purposes of the Wage Act, thereby limiting payout obligations upon separation. The court held that such a designation is permissible. Relying heavily on the Attorney General’s Advisory 99/1, which instructs employers to specify what portion of PTO counts as vacation, the court reasoned that this interpretation avoids uncertainty and aligns with the statutory language. The court rejected the employee’s argument that all accrued PTO should be treated as vacation, noting that the Wage Act does not require employers to provide vacation at all. The Wage Act requires only to pay out upon separation what is contractually designated as vacation. Thus, the employer’s policy designating 24 hours of PTO as vacation complied with the Wage Act.
Key Takeaways for Employers from Siedel
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