“Earned Wages” Not The Equivalent of “Back Pay” Under Massachusetts Wage Act

Published: NEHRA News
May 9, 2019
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The Supreme Judicial Court has just recently made it abundantly clear that for liability to hold under the Massachusetts Wage Act, G.L. c. 149, §148, “[t]he work must have been actually performed and wage payments must be presently due to trigger the precise requirements and severe penalties” available under the Act.  The case is Calixto v. Coughlin, 481 Mass. 157 (2018).

In Calixto, several hundred employees were terminated at the same time in violation of the Federal WARN Act, 29 U.S.C. §2101-2109 (2018).  The WARN Act requires sixty day notice to employees of a mass layoff.  Failing that, the employer is liable to each laid-off employee for back pay.  The terminated employees in Calixto filed a class action against the defunct corporate employer in federal court under the WARN Act and obtained a $2,000,000.00 default judgment.  Unable to collect same, the former employees then brought a class action in state Superior Court directly against the failed corporation’s officers, contending that the WARN Act judgment constituted earned wages under the state Wage Act.  The case was dismissed by the Superior Court.

On appeal, the SJC held that the term “wages earned” under the Wage Act has a very specific meaning.  For liability to hold under the Wage Act, an employee must have already completed “the labor, service, or performance required of him,” i.e. he must have earned the subject wages.  The SJC found that “[t]he extraordinary relief the Wage Act provides – individual liability, treble damages, and possible criminal liability – is directed at particularly egregious behavior, i.e. not paying wages for work actually performed, and not at other employment violations.”  Thus the Court made clear that earned wages are not the equivalent of back pay.