Mass-Peculiarities: An Employers Guide to Wage & Hour Law in the Bay State 2022 Edition

© 2022 Seyfarth Shaw LLP Massachusetts Wage & Hour Peculiarities, 2022 ed. | 171 • The employer could pay any affected employee the additional wages due as a result of the error, and forego obtaining a release of claims. Settling or providing pay without a release leaves the employer exposed to future claims and civil citations from the Office of the Attorney General. 1022 • The employer could voluntarily report the violation to the DOL and request that the agency facilitate a settlement with a release of claims. Self-reporting to the DOL risks a broader and more expensive audit and exposure if other violations are uncovered. • The employer and employee could agree to simultaneously file with the court a complaint and notice of settlement to obtain a court-supervised settlement with a release of claims. Filing a complaint with the court is more procedurally complicated and potentially expensive, and it usually requires that the employee have his or her own attorney, which may invite further litigation. • The employer may decide to change the practice prospectively, but not offer back pay to remedy past violations. This would not decrease its legal exposure for those violations. Given the myriad risks and considerations, the employer should consult with counsel before pursuing any of these options. XVIII. PENALTIES AND ENFORCEMENT A. Individual Liability In addition to corporate liability, the Wage Act imposes personal civil and criminal liability on certain individuals. Specifically, “[t]he president and treasurer of a corporation and any officers or agents having the management of such corporation” can face individual liability for wage and hour violations in Massachusetts. 1023 Generally, board members of a corporation and investors may not be held liable under the Wage Act, absent evidence that they were empowered to act individually as the functional equivalent of a president or treasurer. 1024 Outside of corporate entities, managers of an LLC, or other limited liability business entities may be liable under the Wage Act. 1025 A few key points have emerged from the case law as to the definition of “employer” for purposes of individual liability. To avoid personal liability, an individual must not be a president or treasurer of a company or the functional equivalent of either role in terms of responsibilities. 1026 If a manager plays a large role in determining the corporation’s policies, particularly with respect to employee compensation, he or she is more likely to be held personally liable for violations of 1022 See Penalt ies and Enforcement , Sect ion XVIII. 1023 M.G.L. ch. 149, § 148. 1024 Segal v. Genitrix, LLC , 478 Mass. 551, 558-60 (2017). 1025 Cook v. Patient EDU, LLC , 465 Mass. 548 (2013). 1026 M.G.L. ch. 149, § 148; Segal , 478 Mass. at 558-60.