For Immediate Release - March 26, 2012

Healthcare Company Settles Complaints for Unpaid Vacation Wages

Settlement Provides More Than $1 Million in Employee Restitution, Costs and Penalties

BOSTON – An agreement has been reached with a healthcare services company and its affiliates to settle allegations that they failed to pay more than $800,000 in vacation wages to employees who separated or were terminated from employment, Attorney General Martha Coakley announced today.  The companies will also pay $100,000 in penalties to the Commonwealth and $100,000 to create a trust to fund education and enforcement initiatives on wage and hour laws.         

“Employers that choose to offer vacation time must follow the law and properly compensate employees that have been terminated or separated,” AG Coakley said.  

In July 2010, the Fair Labor Division of the Attorney General’s Office began investigating Genesis Healthcare (Genesis), based in Kennett, PA, 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 October 2008 and November 2011, 1,646 former employees of Genesis and its affiliates were not paid earned vacation wages at separation or termination of employment.

Genesis fully cooperated with the Attorney General’s investigation and audit of the vacation pay records.  As part of the settlement, Genesis has taken steps to ensure compliance with Massachusetts’ vacation pay law.  Under the terms of the agreement, Genesis agreed to pay 1,646 former employees a total of $826,072.04, and agreed to pay $200,000 to the Commonwealth. 

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 laws, overtime and misclassification of employees in the Commonwealth.  Workers who believe that their rights have been violated or that they have not been paid all their wages, including earned vacation pay, or, are strongly 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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