Definition of Unpaid Wages
When an employee is not properly compensated by an employer, he or she is owed unpaid wages. The term generally refers to underpayment from an employer. Under federal law, a worker who renders services to another person or business is entitled to fair compensation.
If an employer does not pay an employee within a reasonable timeframe or refuses to pay them for their work, an employee is owed unpaid wages.
Reasons for Unpaid Wages Lawsuits
Although most people only assume that unpaid wages occur when an employer withholds payment, there are additional and less obvious ways wages can go unpaid. Here are some of the most common reasons people end up filing unpaid wages lawsuits.
Not Meeting Minimum Wage
Violating the minimum wage is a common way for employers to owe unpaid wages. Federal and state laws set a minimum wage that workers deserve to be paid for any job. Although the federal minimum wage is set at $7.25, some states set their own minimum wage. For example, Maryland’s minimum wage is $10.10. If a person is paid less than the state or federal minimum wage, they are owed unpaid wages.
Underpaying Workers in the Service Industry
Service workers, particularly those in the food industry, are sometimes paid at an hourly rate lower than the minimum wage. The reason is that the workers are often given tips from customers. If the combination of the hourly rate and tips does not equal minimum wage, the worker is entitled to unpaid wages.
Breaching the Terms of a Contract
Depending on the terms of the contract, an employee may also be entitled to receive extra compensation upon leaving the company for things like unused vacation pay and severance. Failing to meet those obligations could result in unpaid wages.
Misclassifying an Employee
A growing number of workers are being classified as independent contractors. This classification of workers is exempt from many benefits, including overtime pay. If an employee has been intentionally or unintentionally misclassified as an independent contractor, they should be owed unpaid wages.
How to File an Unpaid Wages Claim
There are two ways to file an unpaid wages complaint under the Fair Labor Standards Act: either contacting the Wage-Hour Division of the U.S. Department of Labor or filing a lawsuit in court.
Strict time limits for making a claim means charges of unpaid wages must be filed as soon as possible. The Wage-Hour Division may investigate the claim and supervise the payment of back wages to the employee. An injunction to restrain a person who violates the Fair Labor Standards Act could also be obtained by the Secretary of Labor.
State law violations should be sent to the agency in the state that handles hour/labor standard violations.
Why Hire an Unpaid Wages Lawyer
An employee can also hire an attorney to file a workplace lawsuit in court against an employer who is withholding wages. Filing a lawsuit can be an important avenue to pursue but will also require knowledge and expertise.
A workplace lawyer can not only help an employee navigate the legal landscape but also understand what is needed to ensure all back wages, plus attorney’s fees and court costs, are paid.
If you think you are owed unpaid wages, contact KBA Attorneys immediately to find out more about next steps.