Posts Tagged ‘departing employees’

Employers Face Wage & Hour Risks When Terminating Employees

September 5, 2014 Leave a comment

This summer, the family-owned grocery store chain Market Basket has been engaged in a contentious and public dispute over ownership and control of the chain. As a result, thousands of jobs have hung in the balance. In a joint letter, the Attorneys General of Massachusetts and New Hampshire recently used the dispute to remind Market Basket of its legal obligations to employees. The joint letter applies to employers generally, and provides a helpful synopsis of some of the obligations and risks involved in employee terminations.

For further information or questions about employee terminations, contact a member of our Employment Law Group.

Massachusetts Employers Must Promptly Pay Departing Employees “Final Wages.”

May 23, 2013 Leave a comment

The Massachusetts Payment of Wages Act, M.G.L. c.149, §148, requires employers to pay a discharged employee his or her wages in full on the date of discharge. Employees who quit must be paid by the employer’s next regular payday.

Importantly, the final “wages” owed at departure include more than just the employee’s salary. Employers must also pay departing employees for all accrued and unused vacation time and for commissions which have been earned by the employee but not yet paid.

Because vacation pay may be owed to departing employees, employers should ensure that vacation policies clearly set forth when vacation is accrued, and whether an employee can carry over unused vacation from one year to the next. Employers with “paid time off” (“PTO”) policies should specify what portion of allotted PTO is vacation time. If an employer’s policy does not distinguish between vacation time and other forms of PTO, a departing employee is should be paid for all earned time off.

Similarly, because commissions which have been definitely determined and have become due and payable to the employee are included in the “wages” due, employers should be careful to define when and how commissions are earned, and under what circumstances an employee will receive payment for a sale which has not been completed at the time of the employee’s termination.

Even when payments of final wages, vacation time, and commissions are delayed by a few days, there is a technical violation of the Wage Act. The Wage Act provides for mandatory trebling of damages, attorneys’ fees, and personal liability of corporate officers. As a result, employers should make every effort to comply with the Wage Act.

For more information on this topic, please contact a member of the Employment Law Group.

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