By Tim Murphy
When it comes to the question of whether there are triple damages for prevailing wage violations, the short answer is no. Most of you don’t have to worry about this question and its answer. But those who work on government contracts—particularly public works projects—do, because prevailing wages have to be paid to workers on those projects, whether they are union-represented or not.
The prevailing wage in Massachusetts is a minimum hourly rate set by the Department of Labor Standards, based, in part, on the geographic area, the type of work being performed, and collective bargaining agreements in the area. Prevailing wages are often higher than what the employee is usually paid for non-public works projects.
Ever since triple damages for Massachusetts Wage Act violations became mandatory in 2008, the Wage Act has become a powerful tool for plaintiffs. The number of Wage Act lawsuits has increased significantly, and with that, so has the number of court decisions.
It seems like every year, our state appellate courts issue important decisions interpreting how far the Wage Act (and its triple damages) can be stretched. The pandemic has not stood in the way of that. Last month, our highest state court, the Supreme Judicial Court (“SJC”) decided Donis v. American Waste Services, LLC, another case interpreting the scope of the Wage Act and how it applies to prevailing wages.
The Donis decision
Donis deals with how the state’s Wage Act and Prevailing Wage Act interact and whether triple damages apply to prevailing wage violations. The workers in Donis were paid for all hours worked, just not at the higher rates set in the Prevailing Wage Act.
Both the Wage Act and Prevailing Wage Act are designed to guarantee that workers are paid what they are entitled to and both are enforced by the Attorney General. Yet, they are structured very differently and have one key difference, namely that no triple damages are specified in the Prevailing Wage Act.
This difference did not deter the plaintiffs from arguing that they should be able to sue under the Wage Act and the Prevailing Wage Act for the same underpayment of wages and be able to recover triple damages. Yet, the Prevailing Wage Act specifically covers the amount of prevailing wages due, how underpayments are recovered, and what the consequences are for employers who fail to properly pay prevailing wages.
The SJC held that the plaintiffs could not sue under the Wage Act for the Prevailing Wage Act violations under the facts of the case. The SJC reasoned that the Legislature passed the two different laws for a reason and the fact that the Legislature had not consolidated the laws meant that it intended them to operate independently. To allow for triple damages would evade the limitations of the Prevailing Wage Act and thwart the Legislature’s intent, according to the SJC.
While this is good news for employers who must pay prevailing wages, it is no cause for celebration. The penalties for violations regarding prevailing wages remain serious and can include forfeiting the ability to work on public works projects. So don’t get complacent. Stay on top of changing prevailing wage requirements and call your labor and employment counsel when you need some guidance.