Donald Schroeder Discusses Impact of Reinterpretation of Massachusetts Wage Act

02 May 2023 Bloomberg Law News

Foley & Lardner LLP Partner Donald Schroeder is quoted in the Bloomberg Law article, “‘No Mercy’ Ruling Leaves Employers Sweating Late Paychecks,” discussing the impact of a 2022 Massachusetts Supreme Judicial Court ruling which held that employers may be liable for damages even when an error in payment occurs through no fault of their own.

The Court’s ruling in the case, Reuter v. City of Methuen, revised an earlier interpretation of the Massachusetts Wage Act, stipulating that employers must pay workers within six or seven days of the end of the pay period when they earned their wages. The law also requires that employees who are fired be paid wages and accrued vacation time in full that day.

Schroeder said in the past, case law suggested that employers could satisfy the Wage Act by paying an employee the wages they were owed, plus triple the interest on their damages, before the worker filed suit. He noted that Reuter “doesn’t really take into account the realistic dynamics that occur when somebody is fired for cause immediately and may not have received their final paycheck.”

For example, a business may choose to get an employee “out the door almost immediately” if they’ve engaged in egregious misconduct, even though they may not be administratively prepared to pay out their final paycheck that day, Schroeder added.

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