A recent “clarification” of the Wage and Hour laws by the Massachusetts legislature, effective July 13, 2008, will significantly impact the handling of wage and hour complaints by employers state-wide.  Pursuant to Senate Bill No. 1059, any lawsuit alleging a claim under the Massachusetts Wage and Hour laws will carry with it the potential for an award of treble damages, in addition to litigation costs and attorneys' fees, regardless of the willfulness or inadvertence of the employer's actions that form the basis for the claim. 

The Massachusetts legislature has sent a clear message to Bay State employers that it is their responsibility to pay their employees what they are entitled to when they are entitled to it, or run the risk of a harsh penalty.  (Because the Legislature has characterized their revision as a “clarification” of an existing law, it is unclear whether the change will have retroactive effect.  This issue will surely be resolved by the courts in the near future.) 

The legislature's clarification overrides, in part, the Supreme Judicial Court's 2005 decision in Wiedman v. The Bradford Group.  In Wiedman, the SJC held that a treble damages award under the Wage and Hour laws was not mandatory, but rather, left to the discretion of the court.  According to the SJC, an award of treble damages was appropriate if the court determined that the employer's conduct was “outrageous, because of [an] evil motive or…reckless indifference to the rights of others.”  Under the revised law, however, the Massachusetts legislature has declared that prevailing plaintiffs are entitled to treble damages regardless of the intent of the employer.

Given the increased risk of a treble damages award, Bay State employers are well-advised to resolve wage complaints promptly, prior to the commencement of a civil action by the employee.  In certain situations, such as claims alleging a failure to pay wages in a timely manner, the law requires an employee to file his or her initial complaint with the Attorney General's office.  This prerequisite may afford the employer an additional opportunity to resolve the issue before the employee files a civil action.  However, this opportunity does not exist for all types of wage and hour claims.  An action alleging a failure to pay overtime, for instance, can be filed directly with the court, without bringing it to the Attorney General.

The revision to the Wage and Hour laws will likely trigger an increase in individual and class actions in Massachusetts alleging violations of the Wage and Hour laws based on workplace tipping practices.  Following several significant jury awards, tipping practices have recently been the subject of increased scrutiny by the courts and the public.  For example, in a tip pooling class action in California, a class of Starbucks “baristas” won an award of $106 million.  Similarly, nine American Airlines skycaps at Logan Airport won $325,000 in a federal court action here in Massachusetts. 

With these high profile cases, and the potential for an award of treble damages, Bay State employers are even more vulnerable to protracted and costly litigation related to their workplace tipping practices than ever before.