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A Case Law Update: Recent Court Decisions Have Implications for Small Businesses

August 15, 2011

There have been several new developments in employment law that may have an impact on small business. These cases involve various issues, including wage-and-hour and retaliation claims. While the facts outlined below may be similar to something that you experience in your own business, it is critically important that your review the facts of any particular employment decisions with employment counsel to ensure a proper analysis.

In July, Judge Bertha Josephson issued an opinion relating to the Massachusetts Wage Act (MWA) that may have a profound impact on how businesses organize. To illustrate the significance of this decision, it is important to understand the MWA and how it may impact your business.

In 2008, the state Legislature amended the MWA by changing the damage award from discretionary to mandatory treble damages for any unpaid wages, plus an award for the employee’s attorney fees and costs. The MWA holds liable not only the business, but also the president and treasurer of a corporation and any officers or agents involved in the management of such a corporation. Even if the business is incorporated, the statute permits employees to take action against individuals associated with the business and expose them to personal liability. In light of the MWA, the effect of non-payment or mispayment of wages can be profound, considering that, for every dollar not paid, the employer owes three dollars, plus attorney fees and costs.

Since the amendment removed the discretionary damage award, courts can no longer consider mistakes as a defense…

You may read more at the link below.

by: Kevin V. Maltby

August 18, 2011

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