BOSTON (Legal Newsline) - Massachusetts Attorney General Martha Coakley announced a settlement on Wednesday with a California-based health care provider and its affiliates for allegedly failing to pay vacation wages to employees who were separated or terminated from employment.
Sun Healthcare Group Inc. and its 21 affiliates will pay more than $60,000 in penalties and restitution, including more than $40,000 in restitution for unpaid vacation time and a civil penalty of $20,000 to the state.
"Withholding vacation payments is the equivalent of withholding an employee's wages," 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."
Coakley's Fair Labor Division began looking into Sun in October 2010 after receiving a complaint from a former employee alleging failure to pay vacation wages after termination. The division alleged that between January 2009 and this past January, 348 former Sun employees were not paid earned vacation wages at termination or separation of employment.
Sun fully cooperated with Coakley's office and, as part of the settlement, the company has taken steps to ensure compliance with the state's vacation pay law. Under the terms of the agreement, Sun has paid the $20,000 civil penalty and paid 348 former employees a total of $44,061.09.
Massachusetts law requires that employers who choose to provide their employees with paid vacation must treat vacation pay like any other wages. The term "wages" must include all earned vacation time. Upon separation or termination from employment, employees must be paid for vacation time earned "under an oral or written agreement."
Coakley's office is responsible for enforcing laws that regulate the payment of overtime, wages and the misclassification of state employees.