Failure to pay wages and overtime is a serious legal offense. Both federal and state law allow employees to recover the full amount of unpaid wages along with additional monetary penalties. The employer may also be required to pay attorney’s fees and court costs, meaning the employee can keep 100% of the money he has earned. As a result, even lawsuits for a relatively small amount of unpaid wages may be worth bringing in court.
Full Amount of Unpaid Wages or Overtime
Federal and state law allow an employee to recover the full amount of unpaid wages, unpaid overtime, or unpaid minimum wage that he or she is owed. Whether the lawsuit is based on the Fair Labor Standards Act (FLSA), the Louisiana Wage Payment Act, or a breach of contract claim, the employee is entitled to be paid for all hours worked as well as any commissions, bonuses, or other payments actually earned, along with any accrued but unpaid vacation. In most cases, employees can recover up to three years’ back wages under the FLSA or LWPA, although that may vary depending on the circumstances of the case and the specific type of claim asserted.
Liquidated Damages
An employee may also recover liquidated damages, sometimes called double damages, from an employer who fails to pay the overtime or minimum wages under the FLSA. For example, if the amount of unpaid wages is $1,000, the liquidated damages will be another $1,000, for a total award of $2,000.
The theory behind liquidated damages is simple. If an employee were only allowed to recover back wages, the employer would suffer no real penalty for its wrongdoing — the employer would have had to pay those wages anyway. Liquidated damages ensure that an employer feels a sting. While liquidated damages are not awarded in every case, most successful FLSA claimants recover liquidated damages.
Attorney’s Fees
The FLSA also requires an employer to pay a successful claimant’s reasonable attorney’s fees and costs of suit. In other words, an employer faces the very real possibility of paying both sides’ attorneys. Congress passed this provision to make it easier for employees to recover the wages they are lawfully owed. Many individual employees would otherwise have difficulty paying for an attorney. This law ensures that those fees are paid by the company who underpaid wages in the first place.
This also allows employment attorneys, such as the Stiegler Law Firm, to take wage cases on contingency without requiring the client to pay attorney’s fees up front. (From the employer’s point of view, this may encourage the early resolution of meritorious wage claims to avoid paying unnecessary legal fees). A successful FLSA claimant is also entitled to recover his court costs and other expenses involved in bringing suit.
Penalties for Failure to Pay Wages on Termination
Louisiana law imposes additional penalties if an employee’s full wages are not paid at the end of employment. The Louisiana Wage Payment Act states that if an employee resigns or is terminated, the employer must pay the full amount of all wages owed by the next regular payday. If the employee demands payment, and the employer does not pay, the employee is entitled to receive up to 90 days’ continuing wages as a penalty. This can be a significant amount of money, and in many cases the penalty exceeds the unpaid wages at issue. The Louisiana Wage Payment Act, like the federal FLSA, also requires employers to pay the claimant’s reasonable attorney fees and costs.
Collective Actions
Finally, the FLSA permits employees to join together in a collective action against a non-paying employer. A collective action allows all employees who are “similarly situated” to press their claims in a single lawsuit. These lawsuits are very useful where the employer has an unlawful pay policy that affects all employees, or a specific group of employees (such as all employees who work in a particular department). The collective action process means that it often makes sense to pursue a lawsuit even if any one individual employee’s claim is relatively small, because the amount owed to the entire group, combined, will usually be significant. It only takes one employee to start a collective action — the court will usually order that written notice of the lawsuit be provided to the similarly situated employees, who will then have the opportunity to join in the suit.
While most unpaid wage or unpaid commissions lawsuits settle before trial, some employers dig in and fight. Stiegler Law Firm is ready and willing to take FLSA and LWPA cases to trial to ensure that our clients receive the money they worked hard to earn.
Employers must take their payroll obligations seriously, and the penalties for unpaid or underpaid wages can be significant. Even relatively small amounts of unpaid wages can lead to significant penalties and award. If you have not been paid all money you are owed, or if you would like help in determining whether your company’s pay practices comply with the law, call New Orleans overtime lawyer Charles Stiegler today at (504) 267-0777 or email me at this link.