8 | Massachusetts Wage & Hour Peculiarities, 2025 ed. © 2025 Seyfarth Shaw LLP family member is ill.”39 The SJC further recognized that because usage of sick time is conditional, employees “typically are not compensated for accrued, unused sick time.”40 The SJC concluded that “[b]ecause accrued, unused sick time is not compensable under a ‘use it or lose it’ sick time policy, such time clearly is not a wage under the act.”41 This distinction from vacation time is critical for employers considering an omnibus leave policy that combines both vacation time and sick time under one umbrella. Doing so, which may be advisable in certain circumstances, could mean that employers will be required to compensate employees for accrued, unused sick time at the time of termination even though such time otherwise would not have been compensable under the Wage Act. 5. Severance Payments The Wage Act does not apply to severance payments. These payments are not referenced in the language of the statute, and the Massachusetts Appeals Court has held that severance benefits are not wages because such pay is not “earned,” but rather is contingent upon termination.42 Thus, severance pay is not included in the definition of wages and is not subject to laws governing the payment of wages. 6. Bonuses a. Discretionary Bonuses The Wage Act does not apply to discretionary bonuses or those that are subject to contingencies that do not occur. A bonus is “discretionary” if an employer is under no obligation to award it.43 39 470 Mass. 710, 713 (2018) (citing M.G.L. ch. 149, § 148C(a) (defining sick time)). 40 Id. (citing M.G.L. ch. 149, § 148C(d)(7) (employers not required to compensate for unused sick time). 41 Id. 42 Prozinski v. Ne. Real Estate Servs., LLC., 59 Mass. App. Ct. 599, 603 (2003). The SJC has cited to the Prozinski decision with approval three times. Calixto v. Coughlin, 481 Mass. 157, 162 (2018) (“severance pay is not mentioned in the Wage Act, and it has not been deemed an ‘earned wage’ under the act”) (citing Prozinski, 59 Mass. App. Ct. at 605); Mui v. Massachusetts Port Auth., 478 Mass. 710, 713 (2018) (citing Prozinski for proposition that the Court has declined to expand definition of “wages” and noting Prozinski held that “severance pay not considered to be wages where payment was contingent upon circumstances of separation”); Weems v. Citigroup Inc., 453 Mass. 147, 151 (2009) (“Our appellate courts have held that the [Wage Act] does not cover . . . severance pay.”) (citing Prozinski, 59 Mass. App. Ct. at 605); see also Sullivan v. etectRx, Inc., 67 F.4th 487, 496 (1st Cir. 2023) (“the Massachusetts Supreme Judicial Court has thrice cited Prozinski with approval for its holding that the Wage Act does not cover severance pay.”); Platt v. Traber, 85 Mass. App. Ct. 1114, 2014 WL 1464268, *1 (Apr. 16, 2014) (“Severance pay is not covered by the [Wage Act].”); Scharf v. Isovia, Inc., 67 Mass. App. Ct. 1121, 2006 WL 3780747, *1 (Dec. 26, 2006) (same). 43 Weems, 453 Mass. at 153; Alfieri v. Merrimack Pharms., Inc., 99 Mass. App. Ct. 1119, 2021 WL 1344730, *2 (Apr. 12, 2021) (award of compensation that rests on discretionary decisions by board “is simply not contemplated by the act and falls outside of its purview.”); Weiss v. DHL Express, Inc., 718 F.3d 39, 48 (1st Cir. 2013) (dismissing Wage Act claim for unpaid bonus where bonus was contingent upon either an employee’s continued employment with good performance or a determination by the employer that an employee was terminated without good cause); Lelio v. Marsh USA, Inc., Civ. No. 15-10335-MLW, 2017 WL 3494214, *10 (D. Mass. Aug. 14, 2017) (holding that employee’s long-term incentive bonus was not a “wage” because it was “both wholly discretionary and contingent on his continued employment”); Boesel v. Swaptree, Inc., Civ. No. 2011-04357-H, 2013 WL 7083258, *5 (Mass. Super. Dec. 23, 2013) (interpreting Weiss to stand for the proposition that “a bonus with the contingency of continued employment was not a ‘wage’” under the Wage Act; and finding that an annual bonus was not a wage under the Wage Act because payment of the bonus was contingent upon the employee earning it by continuing employment for a full calendar year, and employee did not do so); NaviSite, Inc. v. Cloonan, No. CIV.A. 02-1949, 2005 WL 1528903, *14 (Mass. Super. May 11, 2005) (holding retention bonus and discretionary performance bonus at issue “lie well outside the statute's reach”). But
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