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Understanding Employer Liability for Unpaid Vacation Pay in Massachusetts

On Behalf of | Apr 22, 2024 | Firm News |

In Massachusetts, the law is clear when it comes to an employer’s obligations to pay accrued vacation pay upon termination of employment. The Massachusetts Payment of Wages Law (Mass. Gen. Laws ch. 149, § 148) mandates that employers must pay out any accrued, unused vacation time as part of the employee’s final wages on their last day of work. Failure to comply with this law can result in significant penalties for employers, including the payment of triple damages and attorney’s fees to the affected employee.

This was further reinforced by a ruling from the Massachusetts Supreme Judicial Court in the case of Reuter v. City of Methuen 489 Mass. 465 (2022). The court held that any delay in the payment of final wages, which includes accrued vacation pay, entitles the employee to treble damages, plus attorneys’ fees. This decision underscores the importance of employers adhering strictly to the timelines set forth by the state’s wage laws.

The implications of this are considerable. Employers must be diligent in their payroll practices, ensuring that all employees receive their rightfully earned wages, including vacation pay, promptly upon termination.

For employees, this ruling provides a layer of protection, ensuring that they are compensated for the time they have earned but not taken. It also serves as a reminder to carefully review final paychecks to ensure that all due compensation has been included.

Employers are advised to consult with legal counsel to ensure their policies and practices comply with the current laws and to avoid the costly consequences of non-compliance. For employees who believe their rights under the Payment of Wages Law have been violated, seeking legal advice can help them understand their entitlements and the steps they can take to claim them.

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