The Massachusetts Wage Act, G.L. c. 149, § 148, requires employers to pay employees in full and within the strict timeframes in the statute. Damages awarded to employees are unlawfully underpaid, or paid late, include back wages, treble damages (i.e. three times lost wages), attorneys’ fees, and costs.
But when is a company an “employer” subject to these laws?
In Massachusetts, whether an entity is a “joint employer” for the purposes of wage laws is determined by a four-factor test that looks at: whether the putative employer (1) had the power to hire and fire the individual, (2) supervised and controlled the individual’s work schedules or conditions of employment, (3) determined the rate and method of payment, and (4) maintained employment records.
The Massachusetts Appeals Court chimed in on this recently in Tran v. Jennings Road Management Corp., in which the putative joint employer, Jennings Road Management Corp. (“JRM”), provided the employee’s direct employer, Chambers BMW, with accounting, legal training, HR and other services. JRM argued that they were simply a “management consulting company.” JRM claimed they did not have the power to hire and fire, supervise the employees, handle compensation or maintain any records. Following a bench trial, Judge Katie Rayburn of the Superior Court had found that JRM was a “joint employer.” The Appeals Court affirmed.
The Court leaned into the “totality of the circumstances” argument, however, to find that JRM exercised control over the nature and structure of the plaintiff-employee’s employment through first, detailed employment policies set forth in the handbook, and second, through a JRM employee who handled human resources at the dealership. The Court also held that JRM exercised control over the economic aspects of Tran’s employment by setting and administering the benefits available to Chambers BMW employees, handling payroll records and other employment-related paperwork, and reviewing and adjusting employee salary levels.
Tran is a helpful tool for employees whose direct employers are unable, or unwilling, to meet their obligations under the Wage Act. Who an “employer” is may not be obvious.
