An agreement has been reached with two Massahusetts companies to settle allegations that they failed to pay more than $225,000 in vacation wages to employees who separated or were terminated from employment, Attorney General Martha Coakley announced in a press release. The companies will also pay a civil penalty of $71,300 to the Commonwealth.

In 2009, the Fair Labor Division of the Attorney General’s Office began investigating Ryder Truck Rental, Inc. and Ryder Integrated Logistics, Inc. (known collectively as Ryder) 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 2006 and December 2009, 170 former employees of Ryder were not paid earned vacation wages at separation or termination of employment.

Ryder fully cooperated with the Attorney General's investigation and audit of the vacation pay records. As part of the settlement, Ryder has taken steps to ensure compliance with Massachusetts's vacation pay law. Under the terms of the agreement, Ryder agreed to pay 170 former employees a total of $225,083.48, and agreed to pay a civil penalty of $71,300.

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."