Massachusetts Moves to Protect Colleges and Healthcare Nonprofits from Wage Act Lawsuits

Takeaways

• Lawsuits against universities in the Commonwealth alleging violations of the MWA for paying employees monthly without their permission are seeking damages and fees.
• Under a new provision in MA’s 2026 budget, certain colleges and universities and healthcare organizations can adjust their wage payment systems and be protected from these suits filed between 07.01.24 and 09.30.28.
• Employers should consider adjusting their wage payment practices to take advantage of this temporary legislative reprieve.

Article

On June 30, 2025, Massachusetts Governor Maura Healey gave partial approval to the Fiscal Year 2026 budget, which included a new provision that offers certain higher education institutions and nonprofit healthcare organizations in the Commonwealth of Massachusetts temporary relief from certain claims under the Massachusetts Wage Act (MWA), M.G.L. c. 149 § 148.

The budget provision protects these institutions from MWA claims that the institutions’ pay practices violated the Wage Act by paying employees on a monthly basis without their advanced consent.

The MWA

The MWA mandates timely wage payments — weekly or bi-weekly (or semi-monthly for salaried/exempt employees) — with few exceptions. Violations trigger strict liability and mandatory treble damages, as reinforced by the Massachusetts Supreme Judicial Court in Reuter v. City of Methuen, 489 Mass. 465 (2022).

One exception to the weekly or bi-weekly payments under the MWA allows employers to pay certain exempt and salaried employees on a monthly basis if the employee “elects to be paid monthly at his own option.” Recent, well-publicized lawsuits against universities in the Commonwealth allege the universities violated the MWA by paying employees on a monthly basis without the employees having elected to be paid monthly. The lawsuits alleged violations of the MWA and sought treble damages and attorneys’ fees for all wages paid on a monthly basis.

Budget Provision Section 113

Section 113 of the budget provision provides a temporary legal shield from lawsuits filed between July 1, 2024, and Sept. 30, 2028, that allege employees were improperly paid on a monthly basis. The following institutions are afforded this shield:

• Nonprofit colleges and universities.
• Nonprofit healthcare organizations that operate healthcare delivery systems.

Next for Affected Employers

Employers should:

• Review and revise, as necessary, wage payment schedules to ensure compliance with the MWA.
• Seek to secure voluntary agreements for monthly pay where applicable.

Higher education and nonprofit healthcare employers should act quickly to align their practices with the MWA and take advantage of this temporary legislative reprieve. Please contact a Jackson Lewis attorney for assistance with MWA compliance.