State Wage Law Requires Cashout Of Comp Time On Retirement

Like many states, Massachusetts has its own wage and hour law, a statute that is roughly comparable to the Fair Labor Standards Act (FLSA). Under the Massachusetts Wage Act, employers are required to pay each “employee the wages earned by him.”

Ronald Plourde was a captain with the Lawrence, Massachusetts Police Department. Plourde was injured on duty in 2006, and eventually retired in 2010 due to his disability. When the City failed to pay him the cash value of the compensatory time off he earned prior to his injury, Plourde brought a lawsuit claiming that the City’s actions violated the Wage Act.

Plourde’s lawsuit also involved a separate Massachusetts statute known as the Lawrence Act, a statute meant to ensure the fiscal stability of the City. The Lawrence Act sets forth a procedure requiring each of the City’s departments to work within its budgeted allocation and to provide notice to the City if certain expenses exceed that allocation. The Lawrence Act provides that “no personnel expenses earned or accrued within any department shall be charged to or paid from any allotment of a subsequent period without the written approval of the mayor, except for subsequently determined retroactive compensation adjustments, or in the case of an emergency involving the health or safety of the people or their property.”

The City contended that the specific requirements of the Lawrence Act trumped the requirements of the Wage Act. That meant, the City argued, that Plourde’s Wage Act claim was barred by the Lawrence Act because he never received mayoral approval to carry over his compensatory time from previous allotment periods, and therefore his compensatory time was lost.

An appeals court rejected the City’s argument. The Court noted that “the Wage Act requires employers to pay each employee the wages earned by him. The word ‘wages’ shall include any holiday or vacation payments due an employee under an oral or written agreement. The word ‘earn’ is not statutorily defined, but its plain and ordinary meaning is to acquire by labor, service, or performance where an employee has completed [what is] required of him. This means that the City’s argument is clearly inconsistent with the Wage Act.

“Nonetheless, the City argues that the Lawrence Act supersedes the Wage Act. However, without some expression by the Legislature of its intention that the Lawrence Act overrides the provisions of the Wage Act, the Lawrence Act cannot be read as to absolve the City’s obligations under the Wage Act. Interpreting the Lawrence Act so as to nullify the Wage Act and arguably violate the FLSA is not a reasonable construction. The Lawrence Act requires the City to exhaust its current allotment if necessary before turning to the mayor for a waiver or to the union to negotiate about reducing subsequent allotments. In this case, there was no evidence that, at the time Plourde’s earned wages became due, the City was unaware of its obligations, had exhausted its budgeted allocation, or would exceed its allotment at the time of the plaintiff’s retirement by paying the plaintiff’s personnel expenses.”

Plourde v. Police Department of Lawrence, 7 N.E.3d 484 (2014).