Recently in Wage Act Category

April 24, 2014

City Employer Cannot Deny Retired Employee Value of Earned Compensatory Time

The Massachusetts Wage Act has teeth. Among other things, it helps ensure that employers timely pay employees all earned wages, as that term is broadly defined, under the threat of mandatory triple damages, attorney's fees, and costs of litigation for violation of the Act. Leaving little opportunity for employers to avoid their pay obligations to employees, the Act specifically prohibits an employer from entering into a contract with an employee that exempts the employer from his Wage Act obligations.

Earlier this month, the Massachusetts Appeals Court struck down two arguments advanced by an employer to justify the employer's non-payment of wages to an employee. In Plourde v. Police Dept. of Lawrence, the plaintiff had been a police officer with the Lawrence Police Department (LPD) for twenty-five years. Pursuant to the terms of his collective bargaining agreement (CBA), the plaintiff was permitted and elected to work additional shifts, separate from his salaried work. The CBA referred to these extra shifts as "overtime." The LPD's policies and practices permitted officers to elect to receive compensatory time in lieu of wages for the overtime shifts. Throughout his employment, the plaintiff often elected to take compensatory time.

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March 27, 2014

Bonus Payment Excluded from Wage Act Claim

The Suffolk County Superior Court recently analyzed the Massachusetts Wage Act in a case involving the compensation package of a company's departing president. The case was complicated by the multiple and inconsistent compensation agreements the plaintiff and defendant company signed. At bottom, the court decided the issue of whether annual bonuses and vacation pay may be considered wages under the Wage Act. The court found that annual bonuses may not be considered wages under the Wage Act, but that vacation pay may be wages, provided that certain criteria are be met.

In Boesel v. Swaptree, Inc., the plaintiff brought claims the defendants under the Wage Act, for breached of fiduciary duties, and for interference with contractual relations. The plaintiff founded Swaptree, Inc. and served as its CEO until 2010. As part of an investment agreement, the plaintiff resigned as CEO, and accepted the position of president of the company. Upon accepting the position, the plaintiff entered into an employment agreement with the company that differed from the original agreement he had signed at the company's inception. The agreement provided that Boesel receive a certain salary, health and retirement benefits, paid vacations, and would receive compensation for unused vacation days. In addition, Boesel was to receive an annual bonus each year he worked for the defendant company, as well as a discretionary bonus based on his success as president. However, the company paid Boesel only his base salary, without bonuses or vacation time reimbursement.

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