Recent fines portend increased wage-hour enforcement on behalf of Massachusetts employees
On January 25, the Office of the Attorney General for the Commonwealth of Massachusetts announced $440,000 in fines against Dutch Maid Bakery, a wholesale bakery in Dorchester, and staffing agencies used by the bakery, for alleged violations of Massachusetts wage and hour laws. The case is potentially the first of many more to be pursued by Andrea Campbell, the new Attorney General.
In the Dutch Maid Bakery case, the Attorney General’s Office found that the bakery had failed to pay required minimum and overtime wages to employees, failed to keep and provide accurate pay records and pay stubs, and failed to provide employees with required notice of their rights. The staffing agencies were found to have committed similar violations, and also of having misclassified employees as independent contractors and failing to make timely payment of wages.
The sanctions quickly fulfill a campaign promise made by Attorney General Campbell. In her January 18 inaugural address, AG Campbell promised to “tackl[e] wage theft.” Further, in announcing the Dutch Maid Bakery fines, she reiterated that “tackling the issue of wage theft will remain a priority” for her office.
The Attorney General’s actions and remarks are also notable in light of legislation recently introduced before the Massachusetts legislature. On January 18, State Senator Sal DiDomenico (D-Middlesex and Suffolk) introduced an act to, among other things, “prevent wage theft.” (SD.1087). In relevant part, the law introduces provisions akin to California’s Private Attorney General Act. The California PAGA permits employees to file lawsuits against employers to recover civil penalties on behalf of themselves, other employees, and the state for alleged violations of wage and hour laws. The law effectively deputizes aggrieved employees to bring cases against employers on behalf of the state. Each year, thousands of PAGA actions are brought against California employers, and many result in multi-million-dollar settlements.
California employers have principally responded in two ways. First, they have increased their compliance efforts around wage and hour laws. Indeed, California’s employment laws are so numerous, complex, and employee-friendly that some national or multi-national companies have established in-house compliance personnel dedicated to California. Second, California employers have increased their use of mandatory arbitration agreements in which employees waive the right to pursue class action or PAGA claims. However, the impact of arbitration agreements on representative PAGA claims, as opposed to individualized ones, remains debatable.
Attorney General Campbell would certainly welcome a PAGA-like law to assist in her enforcement efforts against employers. If the “Massachusetts PAGA” bill passes, employers with employees in the state can expect a substantial increase in lawsuits alleging violations of wage and hour laws. And even if the bill does not pass, AG Campbell’s remarks demonstrate that employers with Massachusetts employees are likely to be under increased scrutiny during her term.
