MARTHA COAKLEY

ATTORNEY GENERAL

“In these difficult economic times, it is important that employees receive their full compensation upon termination from employment,” said Attorney General Coakley.  “We are pleased that the state’s highest court has made clear that vacation time is wages and that employees must be compensated for their unused earned vacation time upon discharge.  We encourage any workers who believe their rights under the Wage Act have been violated to contact our office.”

The case, Electronic Data Systems Corp. v. Attorney General, originated when an employee filed a claim for unpaid wages with the Attorney General’s Fair Labor Division after being discharged by Electronic Data Systems (EDS).  After investigation, the Attorney General’s Office issued a citation against EDS, finding that the employee should have been compensated for his unused earned vacation time upon discharge.  After EDS appealed, the Division of Administrative Law Appeals and the Superior Court ruled in favor of the Attorney General.   EDS then appealed to the SJC. 

In today’s decision, the SJC ruled that an advisory that the Attorney General’s Office issued in 1999 regarding the Wage Act’s treatment of employers’ vacation policies was consistent with the Wage Act.  The Court found that the Wage Act does not require an employer to offer vacation time to an employee, but if vacation time is offered to an employee, the employee must be compensated for the unused earned portion of the vacation time upon discharge. Although the Court declined to reach the issue, the Attorney General’s vacation advisory requires employers to compensate employees for their unused vacation time when they leave voluntarily.    

The Attorney General’s Office works to protect employees from exploitation by an employer; prosecute employers who fail to follow the Commonwealth's wage and hour laws; and set a level playing field for all employers in the Commonwealth. The office is responsible for enforcing the prevailing wage, minimum wage, payment of wages, overtime, tip pooling, child labor, and Sunday and holiday premium pay laws.  More information can be found at the Attorney General’s website.  Information about the wage and hour laws is also available in multiple languages at the Attorney General’s Workplace Rights website: www.massworkrights.com. Workers who believe they have not been paid all their wages, including earned vacation pay wage or that their rights have been violated are strongly urged to call the Attorney General’s Fair Labor Hotline at (617) 727-3465. 

The Supreme Judicial Court heard the EDS case on February 2, 2009, and the court issued its decision earlier today. The matter was argued before the SJC Assistant Attorney General Kevin Conroy, Chief of Attorney General Coakley’s Business and Labor Bureau, with assistance from Assistant Attorney General Marsha Hunter and Fair Labor Inspector Iona Powell-Headley, both of the Attorney General’s Fair Labor Division.