Labor and Employment Law Alert
April 2008
Authors:
Henry T. Goldman
617.951.9156
henry.goldman@klgates.com
Mark D. Pomfret
www.klgates.com
Three Times the Pain: Massachusetts Employers
Now Face Mandatory Triple Damages in Wage
and Hour Actions
617.261.3147
mark.pomfret@klgates.com
Last week, Massachusetts law was changed to require a tripling of damage awards to
employees who prevail in civil actions under the Massachusetts Wage and Hour Laws. The
new law, which goes into effect on July 13, 2008, will substantially increase the stakes in
wage and hour litigation and will undoubtedly increase the number of plaintiffs and counsel
looking for violations of the law.
K&L Gates comprises approximately 1,500
lawyers in 25 offices located in North
America, Europe and Asia, and represents
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growth and middle market companies,
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global corporations and public sector
entities. For more information, please visit
www.klgates.com.
A few years ago, the Massachusetts Supreme Judicial Court held that trial judges were not
required to triple damage awards. This new law reverses that decision and makes clear that
damage awards must be tripled.
Some aspects of the new law that may not be immediately apparent, but that should be of
serious concern to employers with Massachusetts operations, include:
• Unlike damage assessments under the Fair Labor Standards Act, the requirement
that damage awards be tripled applies whether the employer’s failure to pay the
required wages was intentional or inadvertent. In all cases, the damage award
must be tripled.
• With only a few exceptions, an employer cannot escape triple damages by paying
the amount owed to the employee before trial. For many wage and hour claims
under Massachusetts law, once the employee has filed suit, the unpaid wages
must be tripled.
• In the recent past, Massachusetts law has heavily tilted in the direction of requiring
that employers treat virtually all workers as employees, rather than independent
contractors. Indeed, on March 12, Governor Patrick signed Executive Order
499, which established a Joint Enforcement Task Force for the express purpose
of going after employers that fail to properly classify workers as employees. An
employer who fails to properly classify a worker as an employee will undoubtedly
not pay that person properly under the Massachusetts Wage and Hour Laws.
For example, the person may not get paid overtime if he/she is non-exempt, or
may not be paid for all hours actually worked. The more rigid enforcement of
the employee classification law, together with the requirement that any damage
awards be tripled, means that the failure to classify a worker properly as an
employee can have extraordinary economic consequences for an employer.
• The triple damages can be assessed personally against certain high-level executives
of the employer. Employees are well aware of this possibility and routinely name
these executives as defendants in wage suits.
• Employers are liable for counsel fees to prevailing plaintiffs, in addition to the
triple damages.
Labor and Employment Law Alert
• Class action wage claims in Massachusetts
are on the rise and the new requirement of
triple damages is certain to escalate that
trend. Of course, employers are liable for
counsel fees to prevailing plaintiffs, in
addition to the triple damages.
In light of these developments, employers should
carefully review or audit their operations for strict
compliance with Massachusetts wage and hour laws.
If issues need to be addressed, quick adjustments now
might avoid substantial liability in the future.
K&L Gates comprises approximately 1,500 lawyers in 25 offices located in North America, Europe and Asia, and represents capital markets
participants, entrepreneurs, growth and middle market companies, leading FORTUNE 100 and FTSE 100 global corporations and public sector
entities. For more information, visit www.klgates.com.
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