Massachusetts Court Holds that a Bonus is Covered by the Wage Act

The Massachusetts Wage Act provides that an employer must pay triple damages to employees whom they fail to pay wages. That Act, as the name implies, only applies to wages. As a result, disputes between employers and employees frequently devolve into whether a payment was, or was not, a wage. If it’s a wage, it’s subject to the Wage Act’s triple damage penalty. If it’s not, it isn’t. These disputes often center around bonuses. Recently, the Suffolk County Superior Court provided helpful guidance on the issue of bonuses and the Wage Act.

UNDER MASSACHUSETTS LAW, IS MY BONUS COVERED BY THE MASSACHUSETTS WAGE ACT?

John Brennan sued his former employer Arthur D. Little, Inc. for, among other things, an unpaid bonus. Mr. Brennan brought that claim under the Massachusetts Wage Act. Brennan v. Arthur D Little, Inc. Case No. 1884-cv-02845-BLS1, Dkt. No. 48 (Mass. Super. Suffolk County, Oct. 8, 2020). The employer asked the court to dismiss that count, arguing that the Massachusetts Wage Act did not apply to the payment at issue because it was a bonus, and not a wage or commission. In making that argument, the employer relied upon this case, which held that discretionary payments that an employer is under no obligation to award are not covered by the Wage Act. The Brennan court rejected that argument, holding that the Wage Act did apply to the bonus because the “record includes credible evidence, however, that, internally at least, ADL regarded Plaintiff’s bonus on Project SYCamore as having been earned no later than December 2015.” Put simply, the Wage Act applied to the payment because the employer itself conceded that it was earned, which essentially means that the employer no longer retains the discretion not to issue the payment. Once a bonus is earned, it needs to be paid.

Employment attorney Benjamin Steffans has represented numerous employees in unpaid wage and unpaid bonus claims. If you believe your employer owes you money call us today for a free consultation.