On April 14, 2008, a new law was enacted in Massachusetts, which imposes mandatory triple damages on employers who are found to have violated the state wage and hour laws, regardless of the employer's good faith attempt to comply with such laws. The law goes into effect July 13, 2008.
The Legislature enacted the new law in reaction to Wiedmann v. The Bradford Group, 444 Mass. 698 (2005), in which the Supreme Judicial Court held that a judge's award of triple damages under M.G.L. ch. 149, Sec. 150 for failing to pay wages was not mandatory, but discretionary.
The new mandatory triple damages, along with costs and attorneys' fees to the successful employee, pose significant financial risks to Massachusetts employers and create incentives for plaintiffs' lawyers to bring class action lawsuits. Mandatory triple damages will now be available for a host of wage and hour transgressions, no matter how technical, including failing to pay wages when due, failing to pay overtime to misclassified employees, misclassifying independent contractors, and failing to pay bonuses or commissions.
Additionally, the cost of settling such wage and hour claims is likely to increase, due to the specter of triple damages. Consequently, employers must take every necessary step to ensure compliance with the wage and hour laws. Proper procedures and training are a must to minimize legal exposure.
For more information regarding compliance with Massachusetts' wage and hour laws, please contact any of the attorneys in our Labor and Employment Practice Group.