Violation of Sick Time Payout Policy Not a Wage Act Violation

The Massachusetts Wage Act, G.L. c. 149, §148, is in the news again, the subject of another noteworthy decision by the Massachusetts Supreme Judicial Court. Like the decision declining to extend personal liability to Board members and investors for Wage Act violations reported in an earlier post this year, the Court in Mui v. Massachusetts Port Authority again opted for a narrow interpretation of that important statute.

The Wage Act protects an employee’s right to receive earned wages and salary. These rights are enforced through strict treble damages remedies if prompt payment is not made.  The Act also provides for personal liability of upper management of the employer.

The Wage Act also protects accrued, but unused vacation pay due an employee under an oral or written agreement. Once vacation pay has been earned, it must be paid upon termination.  Failure to do so calls forth the treble damages penalty and potential personal liability.

The Wage Act, however, is silent about accrued, but unused sick pay.  MassPort had a policy, common in the public sector but rare in the private sector, whereby an employee was entitled to be paid a percentage of his unused sick time upon termination.  The plaintiff argued that this benefit was the equivalent of earned vacation time.  Because that benefit had been earned through his labors, the plaintiff argued that the important public policy rationale underlying the Wage Act protections should apply.  Treble damages should therefore be imposed to deter employers from depriving an employee of this earned benefit.

The Court refused to read such language into the Wage Act.  Adopting a strict construction of the statute, the Court found “no reason to conclude that the Legislature intended to include sick pay as ‘wages’ under the Wage Act.”  Because the Wage Act did not apply, the Court held that the enhanced remedies of that statute similarly did not apply in this situation.

In my earlier post regarding the Segal v. Genitrix, LLC case, I asked the question as to whether a decision by a Court comprised of five (of seven) justices appointed by Governor Baker signaled a trend toward a narrower reading of employees’ rights.  While it is still too early to tell, this case is one more data point to consider in attempting to read those tea leaves.

About Rich Van Nostrand

Rich is a partner at the Firm. He has extensive experience in general civil trial work, with concentrations in business, commercial and employment litigation. He provides advice and representation in a variety of business and commercial litigation matters, including shareholder disputes, corporate dissolutions, intra- and inter-company disagreements, and intra-family business disputes. Rich also provides ongoing employment litigation and counseling services to numerous clients in the private, public and higher education sectors. In the private sector, Rich represents clients in a broad range of industries including health care, professional services, high technology, industrial and manufacturing. In addition, he is also frequently selected by litigants to assist in the resolution of their disputes as an independent arbitrator or mediator.
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