Yesterday, Massachusetts made an award of treble damages mandatory for all violations of the Commonwealth’s wage and hour laws, including the wage payment statute and the overtime and minimum wage laws. The legislation is a reaction to a 2005 Supreme Judicial Court ruling, which had limited treble damage awards to situations involving “willful misconduct” by the employer. Under the new law, treble damages are required even if the employer made an inadvertent error or acted in good faith.
The bill had faced significant opposition from industry groups, and Governor Deval Patrick had expressed reservations about the bill. However, he permitted it to become law without his signature by refusing to veto it. The legislation takes effect in 90 days, on July 13, 2008. Note that the plaintiffs’ bar may argue that the law has retroactive effect because the law states that it is “intended to clarify the existing law and to reiterate the original intention of the [Legislature] that triple damages are mandatory.” Given the prior decision by the Supreme Judicial Court, it is unclear how courts will respond to this argument.
As a result of the new law, Massachusetts becomes the first state in the United States to prescribe mandatory treble damages. In contrast, federal overtime and minimum wage statutes allow employers to avoid multiple damages by showing good faith compliance, such as where there is a dispute as to what the law requires. The new law increases the stakes for employers and requires them to be ever more vigilant in ensuring that they are in compliance with sometimes confusing state laws. In recent years, wage and hour litigation has increased several fold in Massachusetts, and the new law will only fuel that trend.