On April 14, 2008, Senate Bill No. 1059, entitled "An Act to Clarify the Law Protecting Employee Compensation," became law after Governor Deval Patrick declined to sign or veto the bill. This new law mandates treble damages for any violation of Massachusetts’ wage and hour laws, and directly overrules the Supreme Judicial Court’s 2005 holding in Wiedman v. The Bradford Group, Inc., which left the award of treble damages to the discretion of the courts. The Legislature eliminated the court’s discretion, and soundly rejected efforts by Governor Patrick to provide a defense against treble damages for employers who could prove by clear and convincing evidence that they acted in good faith to comply with the Commonwealth’s wage and hour laws. Accordingly, employers in Massachusetts now are subject to mandatory treble damages for any failure to properly pay wages, even if those failures are inadvertent or the result of good faith mistakes.

The new law will go into effect July 13, 2008 and will apply to violations of a myriad of Massachusetts wage laws, including those laws relating to overtime, minimum wages, tips and tip pooling, vacation pay, payment of wages for holidays and Sundays under the Massachusetts Blue Laws, timely payment of wages during employment and at termination, and payment of wages to employees improperly classified as independent contractors. Because Massachusetts wage and hour laws are complex and the potential for inadvertent, good faith errors is high, we anticipate this new law will spur an increase in wage and hour lawsuits against Massachusetts employers, particularly class action lawsuits where treble damages can be substantial.

In light of this new legislation, Massachusetts employers should immediately and carefully review all compensation policies and practices to ensure compliance with the Commonwealth’s wage and hour laws. Now is the time for employers to consult counsel and identify any areas of concern.