The Massachusetts Supreme Judicial Court in Reuter v. City of Methuen recently issued a decision ruling that in wage violation cases, subject to the Wage Act, G.L.c. 149, triple damages are triggered when an employer fails to pay a fired employee earned wages on the day of termination.
Beth Reuter, an employee of the City of Methuen, was owed $8,952.15 for accrued vacation time at the time she was discharged. The Wage Act states that an employee is entitled to payment of all earned wages, including accrued vacation time on the day of her discharge. The City of Methuen paid Ms. Reuter $8,952.15 three weeks after she was terminated, but before she filed this lawsuit. The Court ruled that late payments constitute clear violations of the statute, and a late payment is any payment made after the day of an employee’s termination. Since the City of Methuen failed to pay Ms. Reuter on the day of her discharge, the Court held that Ms. Reuter was entitled to triple the amount of vacation time she was owed, plus attorney’s fees.
Prior court decisions indicated that employers could avoid paying triple damages if they paid the amount owed before the fired employee filed a lawsuit. The City of Methuen raised this defense, arguing that since they paid Ms. Reuter before she filed her lawsuit, they do not owe her triple damages. However, the Court held that Ms. Reuter was still owed triple damages since the City failed to pay her wages on time.
The City of Methuen even paid Ms. Reuter triple the interest owed on her late-paid wages, but the Court ultimately held that interest is not the proper measure of damages for late payment of wages. The Court also stated in this decision that an employer would be liable for triple damages to a fired employee if they miscalculated the amount owed. The Court advocates that a delay in payment of owed wages to an employee who was fired may have severe consequences for the employee, and therefore the Wage Act does not tolerate or condone any delay. Therefore, a late payment, even one made before a lawsuit was filed and where triple interest was paid, still triggers triple damages on the wages owed to the fired employee.
This decision clarifies employers’ liability for failing to pay wages on time. Employers must be diligent in calculating owed wages and paying when the law requires. Employees should understand that they are entitled to triple damages, even if the employer makes a late payment of the original amount owed.
Our experienced employment attorneys will continue to monitor this developing area and advise our clients accordingly.
