Posted on 25-Apr-08 by The Timekeeper

Massachusetts Governor Patrick has allowed a controversial triple-damages bill to become law, despite having expressed reservations about its fairness. The new law imposes mandatory triple damages on employers who lose wage and hour lawsuits.

Under the old system, employers who were guilty of “willfully” not paying employees could be assessed triple damages. The difference with this new law is that it makes the damages mandatory, even in cases where it was an honest mistake on the part of the employer.

Proponents say the measure is necessary to ensure employees who are improperly denied overtime, denied their final paychecks or not paid full wages will be compensated. Advocates for employees say without the triple penalties, employers who willfully underpay their workers could be required to reimburse employees for their back pay plus interest, but be allowed to get off the hook for the economic harm their misdeeds caused their employees. (Note: that would have been at the discretion of the judge. As noted, the option of triple penalties was there all along.)

“If you don’t get your wages, your credit report may suffer, you may miss mortgage payments or health payments, and you may have to decide whether you’re going to buy food or clothing this month,” said Philip J. Gordon, a Boston lawyer who represents employees in wage disputes and contract negotiations. “So this law sets in place a mechanism to compensate employees for their losses, and it tells employers in this state to take the payment of wages seriously.”

On the other hand, opponents say the measure could unfairly penalize businesses that make simple mistakes — easy enough to do, given the complex maze of federal, state and tax laws surrounding wage and hour issues. They say it will make Massachusetts a “magnet” for wage and hour lawsuits.

Boston lawyer Richard L. Alfred, who frequently defends companies in class-action wage-and-hour cases, said, “Ultimately, it’s going to hurt the working people of the state because this is going to be a disincentive for businesses to locate here and to expand.”

Proponents counter the law only applies to companies who lose lawsuits — and those who treat their employees fairly and operate in good faith generally don’t get sued. (While they may have a point, I’m not sure I can totally agree with that. I’ve seen plenty of frivolous lawsuits filed in my day.)

Personally, I think the new law goes too far. As an employee, of course I like the idea of getting triple the money if I’ve been underpaid by my company, but I don’t like the idea of it being mandatory. That takes away too much of the judge’s discretion and doesn’t allow for consideration of special circumstances, in my opinion. And as a small business person, the idea gives me ulcers. What do y’all think?

In any case, if you’re doing or considering doing business in Massachusetts, this is something to keep in mind.

Related Posts

• No End In Sight

No Comments

No comments yet.

Comments RSS TrackBack Identifier URI

Leave a comment