For Immediate Release - December 21, 2011

Healthcare Provider Settles Complaint by AG’s Office Over Unpaid Vacation Wages

Settlement Provides More Than $60,000 in Employee Restitution and Penalties

BOSTON – A California based healthcare provider and its affiliates will pay more than $60,000 in restitution and penalties to settle allegations that they failed to pay vacation wages to employees who separated or were terminated from employment, Attorney General Martha Coakley announced today.  The agreement will provide more than $40,000 in restitution for the unpaid vacation time and also provides the payment of a civil penalty of $20,000 to the Commonwealth.

“Withholding vacation payments is the equivalent of withholding an employee’s wages,” AG Coakley said.  “Employers that choose to provide vacation to their employees must follow the law and provide the vacation pay that has been rightly earned.” 

In October 2010, the Fair Labor Division of the Attorney General’s Office began investigating Sun Healthcare Group, Inc. and its 21 affiliates (collectively “Sun”) after receiving a complaint from a former employee alleging failure to pay vacation wages upon termination.  Subsequent review of payroll documents and copies of the companies’ various vacation policies revealed that between January 2009 and January 2011, 348 former employees of Sun were not paid earned vacation wages at separation or termination of employment.

Sun fully cooperated with the Attorney General’s investigation and audit of the vacation pay records.  As part of the settlement, Sun has taken steps to ensure compliance with Massachusetts’ vacation pay law.  Under the terms of the agreement, Sun has paid 348 former employees a total of $44,061.09, and paid a civil penalty of $20,000.   

Massachusetts law requires that employers who choose to provide paid vacation to their employees treat vacation pay like any other wages.  The term "wages" includes all vacation time earned.  Upon termination or separation from employment, employees must be compensated by their employers for vacation time earned “under an oral or written agreement.” 

The Attorney General’s Office is responsible for enforcing the laws regulating the payment of wages, overtime, and misclassification of employees in the Commonwealth.  Workers who believe they have not been paid all their wages, including earned vacation pay, are urged to call the Attorney General’s Fair Labor Hotline at (617) 727-3465.  More information about the wage and hour laws is also available in multiple languages at the Attorney General’s Workplace Rights website: www.massworkrights.com

The matter was handled by Assistant Attorney General Thomas Johnson with assistance from Inspector Iona Powell-Headley, both of AG Coakley’s Fair Labor Division.

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