Triple Damages Now Mandatory for Non-Payment of Wages

Finally, the Wage Act gets its clarification. The law, which goes into effect on July 13, 2008, makes clear that Massachusetts takes violations of the wage statute seriously – with triple damages awarded to employees who must institute lawsuits in order to recover their wages.

The clarification recognizes that failure to pay employees their earned wages in a timely manner is a serious problem. The failures injure employees, undermine our competitive economy and deprive the Commonwealth of revenue. They are acts with serious consequences, especially for employees, and they warrants triple damages.

This should come as no surprise to employers who hire their employees, set the wage rates, set the hours and know when wages are due. Without mandatory triple damages, irresponsible employers can delay payroll, leave their employees without needed paychecks, underbid honest competitors, damage the Commonwealth’s support systems and then pay single wages late, without any compensation to employees for their losses.

Importantly, the clarification also notes that the treble damages are to be seen as liquidated damages, and not punitive damages which would be focused on punishing the employer. This form of treble damages are focused on the employee and tied strictly to the actual unpaid wage amount, an amount roughly determined to compensate an employee for her losses.

The clarification also makes clear that injured employees are no longer required to prove that their employers acted with evil motive or reckless indifference, standards which made chasing unpaid wages virtually impossible, and left many employees with no recourse against companies with deep pockets and big law firms.

For many working class families, this is much needed relief. Many often live pay check to pay check, and are devastated when their earned wages are withheld. Careless or irresponsible employers who promise but fail to pay wages, undermine the ability to pay rent, student loans, taxes, health insurance premiums, medical care, tuition, car payments and groceries – for which anything less than multiple damages could never compensate. Such non-payment also creates a ripple effect throughout each family’s economic health and through the commercial entities which rely on promised payments.

Moreover, there simply is no excuse to justify the far reaching effects of missed payrolls with the institution of payroll services, easy to use computer programs, accountants and plenty of other ways to make sure employers never miss payments – many of the same systems that ensure proper withholdings for state and federal tax payments.

This clarification is a tremendous step to restoring some of the parity in our system and returning the law to its original intent.