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Worker Wins Wage Case Despite Breaking Rules

July 11, 2018
 
A federal court in Massachusetts has ruled that an employer may be held liable for non-payment of wages even if the company eventually pays those wages and even if an employee fails to follow the rules of litigation.
 
In a typical nonpayment of wages case, the plaintiff (employee or former employee) files a claim alleging unpaid wages with the attorney general’s Fair Labor Division (FLD) and then waits for either the attorney general’s office to bring the case on the employee’s behalf, or for the FLD to return the case to the employee with a “right to sue” letter enabling the employee to move forward with a private claim. 
 
The law provides the attorney general with up to 90 days to decide whether to bring its own case before returning it to the employee. Many employers use that time to decide how to handle the matter. The employer may choose to fight the claim or recognize that the wages are due and pay them to avoid litigation and the potential for the disputed wages being trebled under the state law.
 
The interesting twist to this case is that the employer paid the plaintiff in full after the employee was terminated, but well before she received a “right to sue” letter from attorney general. The former employee went ahead with the suit and still won treble damages.
 
The federal court recognized that the plaintiff did not wait 90 days between filing her complaint with the attorney general and commencing her action in state court. In fact, she filed both complaints on the same day, allowing the attorney general no time whatsoever to consider the merits.
 
In justifying her action, the plaintiff argued that she received the attorney general’s consent several days after her suit was commenced. Her logic was that while she was a bit premature, there was no problem because the permission was there before the case was decided by the court.
 
The former employer argued that, given her failure to follow the rules, coupled with the fact that the employer paid her the wages due, late but before the court decision, the case should have been dismissed. The employer essentially argued that it should be shielded from liability in a Wage Act lawsuit until either the attorney general issues a right-to-sue letter to the employee or the 90-day period expires. 
 
The court disagreed with the employer and said that the Wage Law requires that an employee “shall be paid in full on the day of discharge.” In the case of a termination, the employee must be paid all wages due and owed as of the final day of employment. In the court’s eyes, that meant that even if paid in full a day later, the employee has been harmed and has a right to bring an action for recovery of unpaid wages and treble damages, which is what the employee did. 
 
While there had been some degree of risk that the attorney general would not issue a right-to-sue letter and thus limit the employee’s ability to move forward privately, it all became moot when the plaintiff received the attorney general’s letter.
 
Employers must review each termination case carefully to make ensure they have a final check available that day for all of the wages owed. Those final wages include any accrued but unused vacation time. 
 
If you are unable to produce a final check that day, one useful strategy may be to proceed with the termination but pay the employee for one or two more days of work to guarantee delivery of the check by the stated final day of employment. 
 
AIM members may call the AIM Employer Hotline at 800-470-6277 with questions about this or any other HR-related matter. 
 
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