On March 10, 2023, the Federal Deposit Insurance Corporation, which regulates American bank deposits, declared that Silicon Valley Bank (SVB), the 16th-largest lender in America, failed. SVB’s collapse marked the second-largest US bank failure in history, withholding approximately $209 billion in assets at the time of its collapse. Primarily known for its work with venture-backed tech companies, it is no surprise that employees in this sector are rightfully worried.
With some start-up employees receiving notice from their employers that they will not make payroll in the coming weeks, many are asking themselves what rights does someone have if their employer either fails to pay them or pays them late? The attorneys at MA Employment Lawyers can help.
Employees’ Rights To Timely Paid Wages
The Massachusetts Wage Act is the statute that primarily governs the payment of wages in Massachusetts. The Wage Act sets forth when employers must pay their employees. M.G.L. ch. 149 § 148. When an employer must pay you depends on the circumstances, but most fall into the following categories:
· If you are currently employed, you are entitled to payment for accrued wages within six (6) days* from the end of the pay period during which your wages were accrued.
· If you have been terminated by your employer, your employer must pay you on your last day of work, inclusive of your accrued but unused PTO and bonuses;
· If you resign, you are entitled to payment for the work performed before your resignation within six (6) days* of the last pay period you worked.
Many employees in the tech sector or those working for start-ups have been told they will not be paid on time in the near future. If employers miss the above deadlines, Massachusetts law states the aggrieved employees are entitled to three times the value of their late/unpaid wages, plus the reasonable attorneys fees and costs incurred in obtaining that money.
As recently as April of 2022, the Massachusetts Supreme Court in the Reuter v. City of Methuen case reaffirmed that the deadlines in the Wage Act are inflexible and non-negotiable. Accordingly, we encourage you to contact a seasoned and reputable employer lawyer to determine the value of your case if your employer has failed to pay you on time.
Your Employer Has Claimed There Is No Money To Pay You For Your Wages
In light of the SVB crash, we expect many employers in the tech sector to tell employees that payroll cannot be met because there is no accessible money to pay employees. The Massachusetts Legislature accounted for circumstances such as these when it defined the term “employer” in the Massachusetts Wage Act. Under Massachusetts law, your employer is not simply the company that pays you; you are employed by the president and treasurer of the corporation, as well as any officers or agents having the management of such corporation.
This means that even if the company you work for does not have money to pay you for your accrued wages, you can work with a knowledgeable employer lawyer to seek payment of your wages directly from the company’s applicable corporate officers. Simply put, if your employer tells you they do not have the money to pay you this month, you may have other avenues for obtaining satisfaction of your wages.
Your Employer Expects You To Continue To Work Without Payment
Many employers in the tech sector use the phrase “sweat equity” to describe the act of employing people they cannot pay while the start-up company is in its infancy, or facing difficult times. Sweat equity is merely a pretty term for wage theft. The Massachusetts Wage Act requires employers to timely pay employees for all hours worked. If you are not being paid, or if your employer tells you that they cannot pay you this pay period, but that you will be paid later when they have more cash on hand, we encourage you to contact an employment lawyer to assist you in obtaining the wages you are owed.Read More