A federal judge has denied a utility company’s motion to dismiss a class action lawsuit alleging that its practice of paying salaried employees on a monthly basis violates the Massachusetts Wage Act. The plaintiff contends that the company’s monthly payment schedule fails to comply with the Act’s requirements for timely wage payments.
The Massachusetts Wage Act mandates that employees be paid within specific timeframes. For employees who work five or six days a week, wages must be paid within six days after the end of the pay period. The Act allows for monthly payments only if the employee elects this option. In this case, the plaintiff argues that the utility company did not obtain such consent from its employees, thereby breaching the statutory requirements.
This decision aligns with recent judicial interpretations emphasizing strict adherence to the Wage Act’s provisions. For instance, in Turgut v. Hitachi Rail STS USA, Inc., the court held that even a one-day delay in wage payments could constitute a violation, underscoring the importance of timely compensation for employees. The judge noted that a day’s delay could significantly impact individuals living paycheck to paycheck, affecting their ability to purchase necessities or pay rent on time.
Employers in Massachusetts have faced increased scrutiny over wage payment practices. The Massachusetts Supreme Judicial Court’s decision in Reuter v. City of Methuen reinforced the strict liability imposed by the Wage Act, leading to a surge in class action lawsuits targeting payroll practices, including the frequency of wage payments.
In response to this litigation trend, the Massachusetts legislature enacted Section 113 of Chapter 9 of the Acts and Resolves of 2025. This provision offers temporary immunity to nonprofit higher education institutions and nonprofit healthcare organizations from Wage Act claims related to monthly pay schedules, provided employees are paid in full and on time according to the established schedule. This immunity applies to lawsuits filed between July 1, 2024, and September 30, 2028.
However, this legislative protection does not extend to for-profit entities, such as the utility company in the current case. As a result, these employers remain subject to the Wage Act’s stringent requirements and potential liabilities for non-compliance.
Legal experts advise that all Massachusetts employers, regardless of their nonprofit or for-profit status, should review their payroll practices to ensure compliance with the Wage Act. This includes obtaining explicit consent from employees for monthly payment schedules and adhering to the prescribed timelines for wage payments to mitigate the risk of litigation and associated penalties.