The SJC limited the scope of the Wage Act. What does that mean for employees?

The late 1800s and early 1900s constitute a historical period known as the Second Industrial Revolution. While this time period is marked by significant advancements in technology, such as the invention of the lightbulb and the vast expansion of transportation by railroad, it is also marked by the unsanitary and dangerous factory conditions in which millions of people worked.

During this time, the Massachusetts legislature led the nation by outlawing some of the worst ways in which factory owners were taking advantage of employees. For example, the state limited the number of hours children could work each day in 1842, passed the first factory safety and health law in the United States in 1877, and was the first state to adopt a minimum wage law in 1912.

In 1879, the Massachusetts legislature revolutionized labor yet again when it passed the Massachusetts Wage Act. This Act, which the Supreme Judicial Court has said was “intended and designed to protect wage earners from the long-term detention of wages by unscrupulous employers,” states that, on the day an employee is discharged from their employment, their employer must pay them the full wages or salary they are owed. Any employer that fails to make these payments on time is required to pay treble (triple) damages.

This law has stood for almost 150 years, protecting employees and ensuring they are paid the money they are owed in a timely manner. Yet, the Massachusetts Supreme Judicial Court limited the Wage Act’s reach on October 22, 2025, when it decided Nunez v. Syncsort Incorporated.

The plaintiff, Carlos Nunez, worked as a senior director of finance at Syncsort. A few months after he was hired, Nunez and Syncsort entered into a retention bonus agreement, which stated that Nunez would be eligible to earn a retention bonus of $15,000 in two equal tranches on November 18, 2020, and February 18, 2021. The agreement also specified that, “[i]n order to earn each [b]onus [t]ranche, [Nunez] must remain employed by [Syncsort], or any of [its] affiliated entities, with no reduction in [his] regular work schedule . . ., and in good performance standing, through and including the applicable [r]etention [d]ate.”

Nunez remained employed by Syncsort through November 18, 2020, and Syncsort paid him his first bonus on November 30, 2020. In January 2021, however, Nunez was notified that his employment would end on February 18, 2021. He remained employed through that date, but Syncsort paid the second bonus payment eight days later. Nunez then sued Syncsort, asserting (among other things) that Syncsort violated the Wage Act by not timely paying him the second tranche of his retention bonus on his last day. By the time the case reached summary judgment, that was Nunez’s only claim remaining.

This case came down to the question of what a “wage” is under the Wage Act. Despite its title, focus, and purpose, the Wage Act does not provide a comprehensive definition of the term “wages.” The statute discusses “wages” as something to be paid weekly or biweekly, which the Supreme Judicial Court has interpreted to mean payment for labor or services. The Act also specifically states that “wages” include any holiday or vacation payments due under an oral or written agreement, and any commissions that became payable to the employee before their discharge. Conversely, however, the Supreme Judicial Court has held that unused sick time, discretionary stock option plans, profit distributions under stock agreements, deferred compensation plans, and severance pay are not “wages” for the purposes of the Wage Act.

In this case, the Supreme Judicial Court held that Nunez’s retention bonus was a type of “contingent compensation” that is not a “wage” under the Wage Act. Specifically, the Court stated that, where a contingency imposes “some requirement beyond the services or labor an employee provides in exchange for his or her compensation,” that compensation is not a “wage” for the purposes of the Act. Although Nunez did not have to do anything other than continue to perform his job duties in order to earn his retention bonus, the Court held that, because the retention bonus was given in exchange for Nunez working for the fixed term, it was not a wage.

In holding that retention bonuses do not constitute “wages” within the scope of the Wage Act, the Supreme Judicial Court has allowed employers to withhold one type of payment from discharged employees without the risk of treble damages. More importantly, however, the justices have narrowed the definition of “wages,” limiting it to just the compensation paid in exchange for labor performed, including commissions. It appears that now, if there is any other requirement put on a monetary benefit offered to an employee, that monetary benefit will not be considered a “wage,” and the Wage Act therefore does not require that it be paid out on the last day of work.

If your employer is withholding your wages, or you have another workplace legal concern, contact our employment attorneys at (617) 742-6020.