Federal Court Finds That Agreement to Defer Payment of Salary Violates the Massachusetts Payment of Wages Statute


An increasingly common practice among employers, particularly start-ups, is to enter into agreements with senior managers to defer salary payments until certain financial targets are reached. The employees typically welcome these arrangements because they often own a portion of the business. However, a recent decision by the federal court in Massachusetts warns that these types of arrangements may be unlawful. In Stanton v. Lighthouse Financial Services, Inc., the court held that an agreement to defer the payment of salary violated the Massachusetts Payment of Wages statute and was therefore void.

Please see full bulletin for more information.

LOADING PDF: If there are any problems, click here to download the file.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Foley Hoag LLP | Attorney Advertising

Written by:


Foley Hoag LLP on:

Popular Topics
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.