In a recent case, the Massachusetts Supreme Judicial Court (“SJC”) resolved a contested issue under the Massachusetts Wage Act, ruling that successful Wage Act plaintiffs are entitled to prejudgment interest on the unpaid wages and other benefits they are awarded.
However, the SJC held that employees cannot recover interest on the liquidated damages they are awarded for Wage Act violations.
Plaintiffs in Massachusetts have long been able to recover 12% interest on damages in a variety of cases, including any cases where interest is not otherwise provided by law. However, when the Legislature amended the Wage Act to make the trebling of damages mandatory under the Wage Act, it also characterized those treble damages as “liquidated damages,” leaving open the question of whether plaintiffs were still entitled to recover prejudgment interest under the Wage Act or whether the liquidated damages were intended to include prejudgment interest.
The SJC’s ruling is a mixed bag for employers. By confirming that employers will have to pay employees who bring successful claims under the Wage Act prejudgment interest on any damages they are awarded for lost wages and other benefits, the SJC increased the value of an employee’s Wage Act claim against his or her employer. However, the costs for employers could have become significantly greater had the SJC ruled that interest is added to an employee’s treble damages.
Yet, the decision serves as another cautionary tale for Massachusetts employers: when they fail to pay workers in compliance with the Wage Act, they face significant liability.
We are Massachusetts attorneys representing individuals in unpaid wage and overtime cases. If you think your employer owes you wages, send an email describing your situation or call 978-844-4095.