Passage of S. 1059 To Impose Mandatory Triple Damages on all Employers with Massachusetts Employees

On April 14, 2008 Massachusetts Senate Bill No. 1059 (S. 1059) passed without the signature of Governor Deval Patrick. The law will impose mandatory triple damages on all employers found in violation of Massachusetts’ wage and hour laws, including for inadvertent violations, with no exception or defense of any kind.

On April 3, the Massachusetts Legislature passed S. 1059 presented the legislation to the governor. Previously, Governor Patrick had returned the bill to the legislators with recommended amendments addressing his expressed concern that “mandating treble damages in all cases without any exception for employers who act in good faith is unfairly punitive.” The legislature rejected the proposed amendments and re-passed the bill in its original form.

Seyfarth Shaw is a leader in this field and has handled more wage and hour cases under federal and Massachusetts law than any other firm in the Commonwealth. Based on that experience, we know that the recent passage of this bill will create significant financial exposure for our clients. In short, plaintiffs' lawyers from Massachusetts and around the country can be expected to bring wage and hour claims against employers in Massachusetts to take advantage of the windfall legal fees from lawsuits brought in Massachusetts against any employer in the state — from small start-up companies to large national corporations.

Passage of S. 1059 to Pose Significant Economic Risks to All Employers Operating in Massachusetts :

Senate Bill No. 1059: "An Act to Clarify the Law Protecting Employee Compensation”

• calls for mandatory treble damages for all state wage & hour violations
• includes no defense for employers who act in good faith
• poses excessive economic risks to Massachusetts employers—of all sizes, all industries

The passage of S. 1059 into law will trigger monumental change in Massachusetts employment law and pose risk of significant punitive damages to all employers with Massachusetts workforces. This state will be the first and only to mandate that treble damages be imposed on employers found in violation of wage & hour laws, such as:

• non-payment of overtime to employees misclassified as exempt
• timely payment of wages
• Sunday and holiday pay (Blue Laws)
• independent contractor misclassifications
• tipping practices

  What should businesses do?

Seyfarth Shaw has taken a leadership role in advising businesses, lawmakers and the Governor about the severe and adverse impact passage of S. 1059 will have on the economic well-being of the state’s employers and the Commonwealth's efforts to spur overall economic growth. To guide businesses in identifying specific industry risks, our firm has formed an S. 1059 Response Team of employment lawyers who are recognized as leaders in representing businesses on these matters.

Our attorneys are assisting clients in assessing their risks related to wage and hour violations, and counseling them on remedial plans to address any potential liabilities. This represents the critical first step in insulating their businesses from the exposure to more frequent claims and more costly litigation proceedings.

The firm's Labor & Employment Practice in Massachusetts is top-ranked by Chambers USA . Having defended employers in more wage and hour cases under Massachusetts and federal law than any other firm in the state, this team has unmatched expertise in navigating Massachusetts’ unique wage & hour laws; developing strategies to defend companies in federal court against cases that raise claims under both the Fair Labor Standards Act and Massachusetts (and other state) laws; and helping companies take litigation avoidance measures now.