Retention Bonus Payments Not Wages

An employee claiming to be owed bonus payments under a retention agreement could not sue under the Wage Act. The retention bonus payments are not wages, according to the Massachusetts Supreme Court.

WHY THIS IS IMPORTANT… Failure to make payments covered by the Massachusetts wage act automatically entitled the plaintiff to triple damages and reasonable attorney fees in addition to the wages owed. This court noted that not all payments made by employers to employees constitute wages covered by that law. Compensation contingent on an employee’s continued employment to a specific date is not wages. It is not made solely in exchange for the plaintiff’s labor or services, but rather depends on additional contractual conditions and constitutes additional contingent compensation outside the scope of the Wage Act.