A recent Massachusetts Appeals Court case reaffirms two long-held principles under the Massachusetts wage laws: that 1) certain corporate officers may be held individually liable for Wage Act violations; and 2) where employers fail to comply with the legal obligations to maintain certain time-keeping records, they should not benefit from that in litigation.
1. Individual Liability for Certain Officers for Wage Act Violations
The Massachusetts Wage Act, M.G. L. c. 149, § 148, requires timely payment of wages to employees. The legislative purpose of the Wage Act is "to prevent the unreasonable detention of wages."
The Appeals Court reaffirmed that the president and treasurer of a corporate employer, as well as an officer or agent of the corporation who "controls, directs, and participates to a substantial degree in formulating and determining policy of a corporation" are individually liable for Wage Act violations.
Moreover, as for limited liabilities entities (LLCs), the Court reaffirms that managers, officers, or other agents of limited liability entities can also be held individually liable.
2. Employers Should Not Benefit from Violating the Law
State and federal law requires that employers maintain accurate records of the hours worked by their employees. Where an employer maintains records, and the employee is not paid properly for all hours worked, one should be able to discern any illegal underpayment from an audit of those records and knowledge of all relevant facts.
But what happens where an employer does not maintain accurate time-keeping records, and the employee thinks she is being underpaid but did not keep her own records?
The Appeals Court reaffirms a 1946 U.S. Supreme Court holding that the employee does not need to prove "the precise extent of uncompensated work" but instead must show that she has "in fact performed work for which [she] was improperly compensated and [to] produce sufficient evidence to show the amount and extent of that work as a matter of just and reasonable inference." She should not, however, be "penalize[d]" for her inability "to prove the precise extent of uncompensated work."
If the employee is able to show such, the employer would then have the opportunity to present evidence of "the precise amount of work performed" or other evidence attempting "to negative the reasonableness of the inference to be drawn from the employee's evidence."
Doorways Employment Law specializes in employment law counseling, strategic advice and representation to individuals and businesses across Massachusetts, including on wage and hour matters. Contact Doorway Employment Law for an employment law consultation.