Massachusetts High Court Rules that Discretionary Payments Do Not Extinguish Wage Claims
On March 4, 2013, the Massachusetts Supreme Judicial Court resolved a dispute regarding the effect of after-the-fact gratuitous payments on wages due under state law. In Dixon v. City of Malden, the court held that gratuitous, after-the-fact payments by the City did not extinguish the City’s obligation to pay an employee for the value of his accrued, unused vacation time.
The plaintiff in the case had been the director of a nursing home owned by the City of Malden. After over 20 years of employment, the City’s board voted not to reappoint him to the position. The City agreed to negotiate regarding retirement and severance issues, but the parties were unable to reach an agreement prior to the employee’s departure. At the time, he had accrued 50 days of unused vacation time, amounting to $13,615.54.
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