Bill would override SJC wage ruling

Calling the ruling an enormous step backward for workers, state lawmakers and advocates for immigrants are working to override a little-noticed Supreme Judicial Court decision that they say limits penalties to be paid by employers who illegally withhold wages.

Since 1993, employers in Massachusetts found guilty of not paying their workers have been ordered to pay three times the back pay they owe. On July 21, the SJC said that the penalty tripling the back pay due an employee was not mandatory, but up to a judge's discretion and applicable only in situations in which the employer demonstrates ''evil motive or . . . reckless indifference to the rights of others."

Fearing that the court has eliminated a major deterrent to unscrupulous employers, lawmakers are pushing legislation that would require the assessment of tripling back pay in civil suits against employers found to have withheld wages. The bill is supported by some business groups, immigrants' rights advocates, and several lawmakers.

''We want to create a bright line that will make irresponsible employers hold up their end of the bargain," said Peter J. Koutoujian, a Newton Democrat who sponsored the legislation in the House.

Complaints of underpayment or nonpayment of wages are widespread in the state. Just yesterday, Attorney General Thomas F. Reilly's office announced that Holliston contractor Elgin Building Corp. had agreed to pay $16,000 in back wages and $1,690 in fines for failing to pay five workers the prevailing wage.

Reilly's office, which enforces labor laws, received about 65,000 calls at its Fair Labor and Business Hotline last year, more than half of them wage complaints, and issued 234 citations for violations of the state Wage Act.

''We respect the SJC's decision," said Reilly spokesman Corey Welford. ''It clarifies the law."

Ilene Robinson Sunshine, a lawyer and cochairwoman of the labor and employment law section of the Boston Bar Association, applauded the SJC decision. Robinson Sunshine, who represents employers in wage suits, said that none of her clients have deliberately withheld wages and that they should not have to pay triple damages for unintentional violations of the Wage Act.

''It is an excellent decision for employers," she said. ''The court has provided some assurance that all of these situations will be looked at individually, which is always better than having an automatic rule applied."

But advocates for workers argue that the court misinterpreted the law.

''This clearly changes the whole landscape," said Ara J. Balikian, a lawyer who represents employees who sue for back pay and benefits. ''An employer will always argue [that withholding pay] is an innocent mistake."

The SJC decision will have a chilling effect on wronged employees, Balikian and others said, because it is difficult to prove that an employer withheld wages from reckless indifference. And they say it will embolden employers to fight civil suits harder, rather than negotiating settlements, because they may have less to lose.

''This decision makes it so the only way an employee can get more money [than the back pay] is if he proves the employer had evil motive," said Philip J. Gordon, a lawyer. ''Most employers are going to say to employees: 'Good luck to you; it's my lawyers against yours. If the best you can do is get what I owe you anyway, my opening offer is going to be, I'll offer you less.' "

Gordon said he has already seen the effects of the SJC decision in negotiations. Employers' lawyers are taking advantage of the new uncertainty and offering lower sums to settle suits, he said.

Advocates for immigrants are particularly concerned about the SJC ruling, arguing that newcomers are especially vulnerable to unscrupulous employers.

''As workers in low-income, high-risk jobs, immigrants are in a position to be taken advantage of and are exploited by employers," said Ali Noorani, executive director of the Massachusetts Immigrant and Refugee Advocacy Coalition.

Gordon and Balikian first proposed the legislation to Koutoujian and others a year ago, after a small number of lower court judges interpreted the triple damages provision of the Wage Act as a matter of judicial discretion.

The current law reads: ''Any employee claiming to be aggrieved by a violation . . . may [sue] for injunctive relief and any damages incurred, including treble damages for any loss of wages and other benefits." Justice Roderick L. Ireland, who wrote the SJC decision, hung his opinion on the word may.

The pending bill states that ''treble damages shall be awarded" in civil cases in which an employer is found to have withheld wages.

The legislation is as beneficial to business as to workers, argues Koutoujian.

''People create a competitive advantage for themselves in the workplace by not paying employees," he said.

The legislation would bring the statute in line with what many thought was the law's intent, said John Regan, vice president of government affairs for Associated Industries of Massachusetts.

''You're talking about people who defraud their employees," he said. ''These are not folks we're particularly concerned about. The thought has always been, if you treat your employees this way, you'd be subject to treble damages, so the SJC decision was a bit of a surprise."