Most employees make an agreement with their employers that in return for going to work and performing their jobs they will be compensated with wages. The federal Fair Labor Standards Act (FLSA) defines the minimum wage and overtime pay, among other things. Many states have enacted similar laws that regulate the minimum amount that an employee must be paid in return for doing his or her job. Both FLSA and the similar state laws also define the penalties that may be imposed on an employer who violates the law.
Section 16(b) of the Fair Labor Standards Act instructs the courts on the amount of damages that are possible when an employee sues an employer for unpaid minimum wage or overtime claims. The law states that the employer may be required to pay the employee the amount of previously unpaid minimum wage or overtime pay that was not yet paid and an amount equal to that as liquidated damages. If the court finds that the employer failed to pay the employee minimum wage or legally mandated overtime pay then the court must award those damages to the employee. Attorney’s fees and legal costs may also be awarded to the employee by the court.
However, if the employer proves to the court that its failure to pay the mandated compensation was an act or omission that was committed in good faith and that the employer had reasonable grounds for believing that its actions were not a violation of FLSA then the court may use its discretion in deciding whether or not to also award the liquidated damages that are possible pursuant to the statute. If the employer cannot prove these elements then the court is not given discretion and must award the employee liquidated damages.
State Laws: The Massachusetts and California Examples
In 2008, a new law went into effect in the Commonwealth of Massachusetts concerning what an employee may recover if it is proven that his or her employer violated the state wage and hour laws. Massachusetts now requires a court to award an employee damages in the amount of three times the actual pay that was withheld. If an employee proves that he or she is owed pay under the state statutes then this award of treble damages is mandatory and judges do not have the discretion to issue lesser awards even if the employer acted in good faith. The law also requires Massachusetts employers to pay attorneys costs and litigation costs.
Other states such as California have also had recent legal developments concerning damages for wage and hour violations. For the past few years, California courts had been awarding punitive damages against employers who were found to have violated the state’s wage and hour laws. However, in December 2008, the California Court of Appeals held that punitive damages were not allowed for actions arising under the California Labor Code.
Every state has its own wage and hour laws and its own rules about what damages may be imposed for violations of those laws. Therefore, it is important to seek the advice of counsel in the state in which your employer is located if you believe that you have not received all of the pay to which you are legally entitled.
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