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In Massachusetts, Wage Theft is an Expensive Mistake

May 8, 2019

The Massachusetts Attorney General has a message for employers: wage theft will not be tolerated.

AG Maura Healey’s office is cracking down on companies that fail to follow state law regarding wages and working hours. In 2018 alone, the office ordered local construction companies to pay around $2.7 million in restitution and penalties related to wage theft. Construction is one of the industries most prone to wage theft, but any Massachusetts business can run afoul of these laws.

Here in Massachusetts, the Attorney General’s Fair Labor Division oversees wage theft and other labor violations. Anyone can make an anonymous report about an employer’s wage violations. Being a whistleblower is easier than ever for exploited workers, which means employers have to be more diligent than ever in order to stay off the AG’s radar.

What Gets Reported?

The AG’s office has clear laws and rules governing wages and working hours, and encourages employees to report any violation of those rules. Anyone can download a copy of the Massachusetts Wage and Hour Laws poster to get an overview of the current laws.

An employer can violate wage law in a number of ways. Almost all workers have to paid a minimum wage, which varies by year and occupation. (Agricultural workers and service workers can be paid a rate that’s much lower than the statewide minimum wage, and certain kinds of employees in public works are owed a rate called the prevailing wage.) Paying employees less than the minimum wage is just one type of wage theft.

Massachusetts law also requires employers to pay employees for all hours that they work. Some employers violate this law by docking an employee’s pay because he made a mistake or worked more hours than he was scheduled for. If an hourly employee is required to be at work, he must be paid for all of that time. Hourly employees must be paid every week or every other week, and must be paid no more than seven days after a pay period ends. Employees who are fired or laid off must be paid all outstanding wages on their last day of work. Any failure to comply with these requirements is considered a reportable offense.

Since the 2018 implementation of the Massachusetts Equal Pay Law, it’s also illegal for an employer to pay one employee less than another employee for doing comparable work, just because they are of different genders. Employees who do comparable work may only be paid differently because they have differences in seniority, training, geographical location or a few other acceptable areas.

The AG office’s accepts violation reports on its website, via a form that asks the complainant for specific information about the alleged violation. Because fear of the employer’s retaliation is one of the things that keeps workers from whistleblowing, the report form gives employees the option to remain anonymous when making a complaint. Also, state law makes it illegal for employers to punish an employee for reporting a violation.

What Happens Next

The Massachusetts Attorney General’s office reviews all violation reports, but what happens next varies on case-by-case basis. Some complaints aren’t investigated at all. When a complaint is investigated, the complainant may be contacted for more information. The AG’s office will also inform the employer about the report. (Again, the employee who makes the report can request that their name be withheld from the investigation.)

Employers that are found to have violated Massachusetts wage and hour laws are typically given citations. These citations require employers to both pay restitution to the affected employers, and to pay penalties for having broken the law.

Citations carry serious financial consequences, which are determined by the facts of each case. Each violation results in a separate penalty, with maximum penalties of $7,500 to $25,000 per violation, and tax liens are placed on any business that doesn’t pay its restitution and penalties within 21 days. Violating wage law gets even more expensive when employees take formal action against their employers. Under Massachusetts law MGL c.149, s.150, employees who report wage violations and sue their employers may be awarded treble (triple) damages.

Fines aren’t the only deterrent for companies that violate state labor laws. Getting caught can have lasting repercussions on an employer’s reputation. News outlets sometimes report on local companies that get fined, and social media makes it easy for disgruntled employees to spread the word about an employer’s improper labor practices. The AG’s office also maintains a public spreadsheet of companies about which complaints have been filed. Once a report is made, it’s hard for an employer to brush it under the rug.

Staying Compliant

Establishing accurate and prompt payroll procedures is one of the most important ways a company can protect itself from a costly and embarrassing wage theft citation. Commonwealth Payroll & HR has the solutions you need. Based in Massachusetts, our team understands exactly what your business needs to do to maintain compliance and employee morale. Contact Commonwealth Payroll & HR to get started.

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