Avoiding Application of the Massachusetts Wage Act to Out-of-State Employees

The Massachusetts Wage Act is one of the most punitive wage payment laws in the country. Employers who run afoul of its provisions, even unintentionally, are liable for treble damages, attorneys’ fees, and costs.

Against this background, and in an age of increasingly remote work, many Massachusetts-based employers with employees located across the United States may be asking themselves whether the MA Wage Act applies to their employees outside of the Commonwealth. The answer is that it depends, in part, on the extent of the employee’s contacts and relationship with Massachusetts.

Case Law Guidance

In the past few years, courts in Massachusetts have offered guidance on the application of the MA Wage Act[1] to out-of-state employees. For example, in 2013, the Superior Court in Dow v. Casale[2] held that an employee based in Florida could nevertheless enjoy the protections of the MA Wage Act against a Massachusetts employer because Dow travelled to Massachusetts for work multiple times a year, serviced customers in Massachusetts, maintained regular communication with his manager who was based in Massachusetts, and Massachusetts law governed his employment agreement. 

Just last month, a Massachusetts Superior Court relied upon Dow in its holding in Musachia v. Abiomed[3], finding that an Illinois employee could not maintain a claim under the MA Wage Act because there was not a significant enough relationship to Massachusetts to enable a finding that MA laws would govern the employment agreement. Unlike the employee in Dow, Musachia did not travel to Massachusetts except in connection with his initial employee training, he was assigned a territory in Illinois, he performed no work in Massachusetts, his employment agreement was governed by Illinois law, and his supervisors were not located in Massachusetts. For these reasons, Musachia’s contact with Massachusetts was not significant enough to support an application of the MA Wage Act.

The United States District Court of Massachusetts has also recently weighed in. In its April 2023 opinion, the court denied a motion to dismiss arguing that the MA Wage Act should not apply to a Virginia-based employee. The court found that although his employment agreement was not governed by Massachusetts law, and even though he worked primarily outside of Massachusetts and did not service customers in the state, a Virginia resident could nevertheless potentially enjoy the protections of the MA Wage Act if Massachusetts had the most significant relationship to his employment. Relying on the employee’s assertions that he often interacted with leadership and employees in Massachusetts, regularly received support for the company's sales tools from employees, and from “time to time” attended required trainings located in Massachusetts, the court concluded that the employee’s relationship with Massachusetts was sufficient to overcome a motion to dismiss the MA Wage Act claim.

Takeaways for Massachusetts Employers

Massachusetts-based employers should consider taking the following actions to protect against the application of the MA Wage Act to their out-of-state employees:

  1. Assess all employment documentation. Carefully analyze the choice-of-law provisions in offer letters and other employment agreements. If Massachusetts law is applied, there is a greater chance of a court permitting an out-of-state employee to invoke the MA Wage Act. Likewise, assess employee business cards, email signatures, and other written information to determine whether reference to Massachusetts is appropriate.
  2. Determine whether contacts with Massachusetts are necessary. Consider how often the employee is travelling to Massachusetts, whether the employee reports to Massachusetts-based supervisors, services Massachusetts customers, or more generally, how often the employee participates in business transactions in Massachusetts. If these contacts are significant, they may well lead to application of Massachusetts law to an out-of-state employee’s claims.
  3. Be proactive in the face of uncertainty. If there is ambiguity concerning whether an employee has sufficient contacts with Massachusetts for the statute to apply, consult with employment counsel for guidance on best practices. Employers may also consider complying with the wage payment requirements of the MA Wage Act as a prophylactic measure to guard against the possibility of litigation and significant punitive damages.

The Labor, Employment & OSHA attorneys at ArentFox Schiff continue to monitor the application of the Massachusetts Wage Act and other developments for employers regarding national employment concerns. For questions, please contact one of the authors or the ArentFox Schiff professional who usually handles your matters.

[1] M.G.L. c. 149, § 148.

[2] Dow v. Casale, 83 Mass. App. Ct. 751 (2013).

[3] Musachia v. Abiomed Inc., No. 2377CV00310-B (Mass. Sup. Ct., Essex Dec. 12, 2023).


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