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Governor Patrick, Please Don't Make the Same Mistake Twice!

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For the third time in two years, Massachusetts' lawmakers passed a bill that would require employers to pay triple damages to workers for not paying wages on time or other violations of the state's wage laws.

When the bill was passed in 2006, the veto by the pro-business governor, Mitt Romney, was no big surprise. But when Democrats pushed the bill through the legislature earlier this year, Governor Deval Patrick's response shocked many. Instead of signing the legislation into law, he proposed amending the bill to create more wiggle room for employers who break the law. Lawmakers have rejected Patrick's attempt to please business by watering down the bill; instead they sent the original version to his desk once again. This time, hopefully, Patrick will not repeat his mistake.

Under the current law, employers may be ordered to pay triple damages when they violate Massachusetts' wage laws, but it is left to the discretion of the judge. Often times, employers are only required to compensate the aggrieved worker by paying the amount owed plus interest.

One problem with such a system is that it creates very little incentive for employers to comply with wage laws. Even if the worker detects a violation, finds a lawyer, brings a lawsuit and prevails in court—already a significant string of accomplishments—the employer may still only be asked to pay the amount that he initially should have paid the worker. Therefore, unscrupulous businesses, particularly those employing low-wage workers with little education, will withhold wages, fail to pay overtime or not pay workers on time.

Both the Governor and the legislature seem to agree that the current incentive structure must change and triple damages should be granted with greater frequency. The disagreement is over whether or not triple damages should be mandatory upon finding that a violation occurred.

When the Democratic legislature passed a bill in February to make triple damages mandatory in all cases, Patrick proposed an amendment to make triple damages inapplicable where the employer can prove it was acting in "good faith."

Patrick's position seems to have pleased the state's business community. But even if it might be good politics for Patrick, it is bad policy. The two main arguments that have been offered in favor of Patrick's amendment do not withstand close scrutiny.

The first argument is that it is unfair to make employers pay triple damages because of an honest mistake or computer glitch. To collect triple damages under the proposed legislation, however, a worker must first bring a complaint to the Attorney General, then file a case in court and ultimately win that lawsuit. If workers are not paid because of an honest computer error, the company should immediately compensate them upon being made aware of the problem, making it unnecessary for workers to even start the process to collect triple damages.

The second argument, which Patrick himself voiced, is that mandatory triple damages are "unfairly punitive." Actually, provisions already exist under which employers can face criminal penalties for violating the state's wage laws. The proposed legislation, by contrast, does not automatically impose a huge penalty on the violator as punishment. Rather, it awards the worker an amount which is based on the wages that were actually withheld.

The more fundamental problem with the above arguments is their failure to recognize triple damages' function of compensating aggrieved employees. Many Massachusetts workers (and their families) live paycheck to paycheck. When wages are not paid on time, families fall behind on paying rent, tuition and car payments. They must struggle to pay for health insurance, gas and food. The credit card company will not allow a worker to miss a few payments—even if her employer suffered a computer glitch. Missed, late or partial wage payments will impact these families immensely, regardless of whether they were done in "good faith." Only multiple damages could come close to compensating workers for the suffering caused by not receiving their full earnings on time and then, on top of that, needing to litigate in court to recover what is owed.

Governor Patrick, please consider this legislation from the perspective of the working families that elected you.


7 Comments

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