Massachusetts: “Back Pay” Damages under the WARN Act are not Wages under State Law

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All Employers Subject to the Federal WARN Act in MA

EFFECTIVE

December 28, 2018

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In Calixto v. Coughlin, the Massachusetts Supreme Judicial Court stated that back pay under the federal WARN Act is not considered wages under the state Wage Act. There, employees claimed a violation of the WARN Act for failure to give advance notice of a company closure. The employer did not defend the claims and the employees were awarded almost two million dollars in “back pay.” However, the employer was insolvent and unable to pay. The employees subsequently filed a claim under the Wage Act for failure to pay the “back pay” award. Ultimately, the Court interpreted the state Wage Act to only apply to “wages earned” for work actually performed, resulting in the dismissal of the employees’ claims.

Action Items

  1. Review federal WARN Act requirements in advance of any furloughs, significant layoffs, or closures.
  2. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser.

© 2019 ManagEase

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