Recent Decisions Illustrate Strict Interpretation of Massachusetts Wage Act

by Foley Hoag LLP

Two recent decisions from Massachusetts courts again highlight the strict requirements of the Massachusetts Wage Act, which details how and when employees must be paid. The cases address the treatment of sales commissions and vacation time, both of which are considered “wages” under the law.

In McAleer v. Prudential, a former Prudential employee alleged that the company failed to pay him earned sales commissions. Prudential's defense to the claim was that because its commission plan gave the company discretion to interpret the plan and determine whether commissions were due, the commissions at issue were not earned wages under Massachusetts law.

U.S. District Judge Douglas P. Woodlock of the District of Massachusetts disagreed, explaining that although Prudential’s plan did afford the company some discretion over factual determinations and decisions relating to eligibility, the plan did not give the company the right to withhold or change commission payments for no reason. The court further found that the commission payment was covered under the Wage Act because the amount owed was “arithmetically determinable.” Finally, the court rejected Prudential’s argument that it did not owe the commission because the former employee was not an “active employee” when the commission became due and payable. Judge Woodlock reasoned that the employee’s status on the date the commission became payable was inconsequential if the commissions were earned during a period of active employment.

In the second recent Wage Act decision, the Massachusetts Supreme Judicial Court (SJC) considered a case involving a former employee who sued the City of Malden for failure to pay accrued but unused vacation time upon his termination, as is required by the MA Wage Act. The city argued that it did not owe the former employee for unpaid vacation time because it continued to pay his salary and benefits after his termination. These payments, Malden argued, added up to far more than the city owed him for unpaid vacation time.

The SJC rejected Malden’s argument and found that the city violated the Wage Act by failing to pay the employee for his unused vacation time. The court determined that salary and benefit continuation after termination does not mitigate the employer’s obligation to pay accrued but unused vacation time. The Court suggested that had the City made clear that its post-termination payments encompassed unpaid vacation time and accounted for the payments in this way on its payroll records, the claim would not have succeeded.

Both cases illustrate the importance of compliance with the Wage Act, even in the post-employment context. Employers with commission plans must ensure that employees who earn commissions are paid all amounts due, even if they leave the company before payment is made. In addition, all employers should be aware that salary continuation or severance pay does not substitute for the employer’s obligation to pay an employee for accrued but unused vacation time. Because penalties for violation of the Wage Act are substantial (including automatic treble damages and attorneys’ fees), employers should ensure that they have appropriate policies and procedures in place pertaining to the end-of-employment and post-employment contexts.

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

Foley Hoag LLP on:

Readers' Choice 2017
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 using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*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.