By Julia Russo, Peter Moser, Catherine Reuben August 16, 2022
Recent litigation highlights that employers may face significant liability for failing to pay wages in a timely manner.
Currently, the New York courts are considering a class action lawsuit brought against Wal-Mart Associates, Inc., alleging that the company violated the pay frequency requirement of New York’s Labor Law by paying certain workers every two weeks instead of weekly. The lawsuit could cost Wal-Mart, and other companies hit with late payment lawsuits such as Costco Wholesale Corp. and Walgreen Co., billions of dollars. Under the New York law, “manual workers” must be paid their wages within seven calendar days after the end of the week in which they earned the wages, and those workers can obtain liquidated damages equal to the amount of wages they received later than on a weekly basis. In the class action, manual workers who work or have worked for Wal-Mart allege they were instead paid on a bi-weekly basis, which is in violation of New York’s Labor Law, and they now seek hundreds of millions of dollars in damages depending on how many New York employees fall under the weekly pay requirement.
Similarly, in Massachusetts, the Supreme Judicial Court recently held that employers could be liable for attorneys fees and treble (triple) the amount of late wages for even a minor or inadvertent late wage payment to a terminated worker. The case emphasized that the Massachusetts Wage Act imposes strict liability on employers for late wage payments, even late payments attendant to a good faith disagreement or miscalculation, or direct deposit delay.
Cases like these remind employers to be ever-mindful of their state’s wage payment laws, as courts and plaintiffs’ attorneys apply increasing scrutiny to pay practices. Wage payment laws are state-specific. HRW encourages employers to review their pay practices for compliance with applicable state law. Multi-state employers in particular need to be mindful of varying state requirements.
For questions about compliance with Massachusetts wage payment laws, please consult your HRW attorney.