Assessing the Impact of Massachusetts' Mandatory Treble Damages in Wage Cases
On July 13, 2008, Massachusetts’ “Act to Clarify the Law Protecting Employee Compensation” went into effect, making the Commonwealth the first state to mandate treble damages in wage cases. The Act also mandates that costs and attorneys fees be awarded in addition to treble (triple) damages in all successful civil lawsuits filed under Massachusetts' wage payment, prevailing wage, minimum wage, overtime, weekly wage and other miscellaneous wage-related laws. Previously, Massachusetts judges had the discretion to award treble damages, but considered such issues as whether employers had acted in good faith and whether violations had been willful. Prior to the new Act, judges followed the precedent set by the Massachusetts Supreme Court in Wiedmann v. The Bradford Group, Inc. [444 Mass. 698 (2005)], which established the option to award treble damages for willful violations only.
The Act has now been in effect for close to a year. Some predicted would drive business out of the Commonwealth and/or make it the venue of choice for class action wage and hour cases. Our informal survey of Massachusetts attorneys suggests that the most significant impact of the Act has actually been to move employers to the settlement table more quickly.
Also, in January of this year a bill was introduced in the Massachusetts House of Representatives at the behest of the Associated Industries of Massachusetts (AIM) that would amend the Act to add one crucial word – “willful.” The bill, which currently languishes in the Joint Committee on Labor and Workforce Development, would amend the bill to mandate treble damages only in the case of willful violations. With the same governor who permitted the Act to become law still in place, it remains to be seen whether this bill will have legs.
The Massachusetts Treble Damages Act is part of a wave of increased legislation and enforcement of wage and hour laws at the state level that is presently sweeping across the country. Employers, particularly in Massachusetts, need to take compliance very seriously in the current climate.
