Massachusetts High Court Holds Wage Claim Releases Are Valid and that Overtime Can Be Recovered Under Wage Payment Law

Posted on January 3, 2013 by Wage and Hour Practice Group

The Massachusetts Supreme Judicial Court (the “SJC”) recently answered two important questions that have vexed lower courts, and employers, in recent years. First, the SJC concluded that employees may release claims under the Massachusetts Payment of Wages Law, Mass. Gen. Laws Chch. 149, § 148 (the “Wage Act”), provided that the release is “stated in clear and unmistakable terms” and specifically refers to the Wage Act. Second, the SJC held that, although plaintiffs may pursue claims for overtime under the Wage Act, which has a longer statute of limitations than the state overtime law, a plaintiff only may recover the straight-time value of such claims, not the premium rate provided for by the overtime law. To learn more about the decision, please see Littler's ASAP, Massachusetts High Court Permits Employees to Release Wage Claims, by Christopher Kaczmarek and Jeanne Barber.

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Illinois Issues New Emergency Rules for the Illinois Wage Payment and Collection Act

Posted on April 21, 2011 by Wage and Hour Practice Group

By Milton Castro and Jeremy Stewart

On February 22, 2011, the Illinois Department of Labor issued emergency rules to more swiftly implement and enforce the legislature’s amendment to the Illinois Wage Payment and Collection Act (IWPCA or the “Act”) that went into effect on January 1, 2011. The amendment modified the Act by: (1) clarifying an employee’s right to pursue a private right of action; (2) providing a new administrative forum for claims under $3,000; (3) imposing enhanced civil and criminal penalties; and (4) expanding employees’ protection from retaliation. With the emergency rules now in place, the Act has been further modified in some of the following ways:

  • The Department has reconfirmed that administrative, executive, and professional exemptions to the Act’s overtime requirements shall be determined based on the regulations to Fair Labor Standards Act as they existed prior to the 2004 amendments;
  • The Act now specifically prohibits employers from requiring employees to enroll in a direct deposit arrangement.
  • Rather than just keep records for each employee, employers must make and maintain records to include particular information about employees’ hours worked, pay, vacation days earned, etc.
  • Claimants now have 1 year to file a wage claim (extended from 180 days) from the time their wages or final compensation are due. Employers are likewise allowed 15 days rather than 10 to respond to a wage claim.

The Department’s most substantial addition to the Act, by way of these emergency rules, is the establishment of a formal administrative procedure (so-called “formal default hearings”) for the adjudication of wage claims under $3,000 (which reportedly constitute 75% of all wage claims filed each year). Here are some of the key developments: scheduling and notice requirements for formal default hearings are outlined and explained; consolidation/severance of hearings is possible; the Department is empowered to issue subpoenas to compel the attendance of a witness and/or production of documents; and non-waivable administrative fees and statutory penalties may be assessed upon a finding against the employer.

These emergency rules appear to be an attempt by the Department to increase its enforcement power, while at the same time creating more informal procedures that will allow it to take on more claims per year. The Department is now taking comments on the emergency rules, which will remain effective for 150 days, or until July 22, 2011. On that date, any of the rules that have not been adopted will be nullified. However, it is likely that the emergency rules will, in large part, be ratified as they presently exist.

For more information on the Illinois Wage Payment and Collection Act and its recent amendments, please see our ASAP.
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Massachusetts High Court: Employers Can't Dock Pay!

Posted on February 3, 2011 by Wage and Hour Practice Group

The Massachusetts Supreme Judicial Court recently held that the state’s Payment of Wages Law prohibits employers from reducing employee wages to recoup employee debt obligations unless the deduction can be considered a “valid set-off,” which it proceeded to interpret in a very restrictive manner. As the Payment of Wages Law provides for mandatory treble damages and attorneys’ fees, employers should immediately review their payroll practices to ensure that they are not making improper deductions. See our recent ASAP for a detailed analysis for the implications of this decision for employers.

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Illinois Gets Tough on Wage Violations

Posted on August 5, 2010 by Wage and Hour Practice Group

On July 30, 2010, Illinois Governor Pat Quinn signed Senate Bill 3568, the most extensive change to the state’s wage theft statute in decades. The amendment to the Illinois Wage Payment and Collection Act, which goes into effect on January 1, 2011, focuses on the following:

  • Broader coverage;
  • Efficient enforcement mechanisms;
  • Enhanced civil and criminal penalties; and
  • Increased protection from retaliation.
     

In particular, Senate Bill 3568 empowers the Illinois Department of Labor (IDOL) to establish a streamlined administrative procedure for processing “small” wage claims (those under $3,000), which constitute 75% of all wage claims filed each year. Most notably, SB 3568 expressly grants employees the right to pursue their wage claims in either a private civil action or in a class action on behalf of others similarly situated. The employee may not, however, pursue both a claim with IDOL and a civil action.

With SB 3568, Illinois joins a number of states who have passed tougher legislation to address wage and hour violations, which, according to the bill’s advocates, is a growing problem. “Illinois workers deserve every penny they have earned, on-time and in-full,” said Governor Quinn “This important legislation will help Illinois workers recover unpaid wages faster and will further crack down on wage theft throughout our state.”

This entry was written by Milton Castro.

Photo credit: chestnutphoto
 
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Utah Joins the Growing List of States Allowing Employers to Pay Wages With "Pay Cards"

Posted on April 29, 2010 by Wage and Hour Practice Group

Effective March 24, 2010, employers in Utah are now permitted to use pay cards to compensate their employees for their wages or salary. The new regulation (Utah Admin. Rule R610-3-22) defines a pay card as a “stored value card that can be used at an ATM-type machine to access wages that are credited to the card.” If an employer in Utah intends to pay employees with a pay card, it must ensure that this new practice meets the following conditions:

  1. With one use, or a single transaction, the employee must be able to withdraw the full amount of earned wages without incurring a fee.
  2. The full amount of wages for a pay period shall be available for the employee via the pay card on the applicable payday.
  3. On each payday, the employer must provide the employee with a written or electronic statement of deductions from the employee’s gross wages for the pay period at issue.
     

Utah is not the only state to permit employers to utilize pay cards for the payment of wages. At this time, many states allow this practice, including: Alaska, Arizona, California, Colorado, Delaware, District of Columbia, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Oklahoma, Oregon, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Virginia, Washington, West Virginia, Wisconsin, and Wyoming. Many of these states, however, have different requirements governing the use of pay cards. Moreover, in a number of these states, it may be unlawful to require employees to accept payment via pay card. As a result, before implementing a pay card system, employers should check the laws in states in which they operate to ensure that any change to existing pay practices complies with state law.

This entry was written by Jennifer L. Mora.

Image credit: Channel R
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