Final Paycheck Rules on Termination Dates

Hey Filing a workers’ compensation claim in Massachusetts can be fraught with many pitfalls, not the least of which is retaliation from your employer. Although it is illegal, it is not unheard of for companies to take action against an injured worker – including demotion or termination. 

Under Massachusetts law, your employer cannot legally fire you or discriminate against you because you got hurt at work or because you filed a workers’ compensation claim. However, it still happens and you need to understand your rights.

At a bare minimum, this involves the right to receive your final paycheck, pursuant to M.G.L. ch. 149, Section 148, the Massachusetts Wage Payment Act.

The law requires companies to pay 100 percent of your outstanding wages and compensation on the day of termination. If this does not happen, you may be entitled to collect:

• Your lost wages
• Triple your original damages
• Attorney’s fees

At Jeffrey Glassman Injury Lawyers, our experienced legal team knows this is just a fraction of what injured workers may be authorized to receive – but it’s an important entitlement that should not be overlooked.

Workers’ compensation is recognized as a “grand bargain” between employers and employees. Workers receive no-fault coverage for medical bills and a portion of lost wages incurred as a result of an on-the-job injury. In turn, they forfeit the right to sue their employer for negligence.

But in recent years, there has been a comprehensive effort to erode the rights of workers. This has involved passage of numerous measures to make it tougher for employees with certain injuries and illnesses to qualify for benefits, imposing arbitrary caps for certain injuries and setting unreasonable time limits on benefits.

In a climate that is increasingly hostile to injured workers, it has become more common for companies to deny workers access to legitimate benefits – and the pay they rightfully earned in the weeks prior to injury and termination.

Injured workers aren’t looking for a windfall. They want fair compensation for their injuries. And they don’t want to face the possibility of an unjust firing simply because they got hurt at work.

Plaintiffs will now routinely seek coverage of all forms of wages within the scope of the statute.

The statute imposes strict regulations on employers to ensure workers receive proper pay for the job they have done. Specifically, the law requires employers to:

• Pay wages earned in full to the worker on the day he is terminated;
• Pay other accrued benefits to a worker due at the time (i.e., unused vacation, sick pay, etc.) paid on the day of termination;
• Avoid making deductions from these final paychecks – even when the worker signed a blanket deduction agreement or borrowed from the employer as part of an employee loan or tuition plan.

A number of recent cases filed under Massachusetts Payment of Wages Law have broadly defined the term “wages,” to include even non-traditional wages paid to highly-paid executives and administrators. Increasingly, courts have rejected employer efforts to exclude higher-paid workers and contingent pay.

In fact, in the 2002 case of Lohnes v. Darwin Partners, Inc., the court established that the exclusion of irregular commissions essentially “reduces the act to a sham” – which was never the Legislature’s intent. Further, a number of appellate decisions have held it was a reversible error in payment of wages lawsuits not to grant the plaintiff treble (triple) damages.

Unfortunately, despite the law and case law precedent, many employers do not understand their obligations with regard to the final paycheck. They may not even realize they aren’t allowed to fire someone for a work injury (though this is no excuse for doing so; it’s their responsibility to know).

A worker contemplating quitting after a work injury really should consult with an experienced workers’ compensation attorney. You may be forfeiting some of these important benefits.

Even if your employer has informed you they can no longer accommodate your disabilities or they were forced to give the job to someone else in your absence, you should not agree to a formal resignation before first discussing it with your lawyer.

Workers who quit are not entitled to receive their total pay and accrued benefits on the day they announce they are leaving or on their last day. They are, however, entitled to receive these benefits on the next regular payday.

In terms of workers’ compensation, every case is different, but it’s often best to stay with your current employer until the workers’ compensation case is fully resolved. Of course, we know full well many employers make injured employees’ lives difficult and push them to the breaking point, often leaving workers feeling as if they have no choice but to leave.

If you quit, workers’ compensation should still cover your medical bills. However, your employer may not be required to cover your lost wages. The argument could be made that you are refusing suitable work.