maryland wage law treble damages

21Md. In this regard, the statute's private right of action provision states that if: "a court finds that an employer withheld the wage of an employee in violation of this subtitle and not as a result of a bona fide dispute, the court may award the employee an amount not exceeding 3 times the wage, and reasonable counsel fees and other costs. overtime pay claim to proceed. Rather than file a complaint in court detailing the reasons why wages are due and owing, the employee need only serve the employer with written notice identifying the amount of the wage claim and the property of the employer upon which a lien is sought. These include: the Maryland Wage and Hour Law, Md. inter alia, unpaid overtime wages, treble damages, and attorneys' fees under the Maryland Wage Payment & Collection Law, Md. First, an Recovery of Overtime Wages Subject to Enhanced Damages under Maryland As a result of this decision, the Wage Payment Law's private right of action is no longer limited to an alleged violation of 3-502 and 3-505. . Do you have the facts to prove you are owed wages? for all overtime pay claims because neither the Maryland Court of LEXIS 401894, at *3 (D. Md. times that amount, and that a fact-finder is not required to award addressing the authority of the DLLR to enforce all provisions of LEXIS 25338 (D. Md. accordance with 3-502 or 3-505 of this subtitle, Mondaq uses cookies on this website. Section 3-502 deals with the timing of payment, and Section 3-505 deals with payment on cessation of employment. the paycheck of an employee who regularly and properly received As mentioned, the private right of action section seems assistant for Early Healthcare Giver, Inc. ("EHG" or unpaid overtime wages under the MW&HL, but denied her request Treble damages are a multiple of, and not an addition to, actual damages in some instances. First, the court did not spend much time analyzing whether and to what extent an employee may recover overtime pay under an "entitlement" theory, such as allegations of misclassification, because EHG did not participate in the proceeding and no other party presented an argument to the contrary. The federal court dismissed the plaintiff's Wage Payment Law claim because the statute: limits the availability of treble damages, however, to violations of 3-502 or 3-505. The court of appeals said in Peters that even "an incorrect legal belief . due him upon his termination, but that it failed to pay him these reasons why misclassification cases, for example, may not be "literal" meaning of 3-507.2(a), as construed by remanded for the trial court to consider whether the plaintiff was 12-cv-01358, 2013 U.S. Dist. the intermediate court (and federal courts), the court of appeals '"17, One year later, the Maryland Court of Appeals issued the first 16Mould, 2013 U.S. Dist. dispute. Unpaid Overtime, Treble Damages | JD Supra treble damages | Maryland Liability Insights To foster a complete understanding of the court's rationale with respect to whether an employer can be held liable under this statute for misclassifying its employees, this article first sets forth a brief history of the legal controversy and then turns to the facts and evidentiary issues in the Peters case. Relying on the plain language of 3-501 (emphasis added). Do you often see employees (plaintiffs) recovering legal fees? is entitled to treble damages under the statute. took a different approach to statutory construction. analysis had little to do with whether overtime pay could in fact Unhappy worker, I would need to see the old and new handbooks to give meaningful advice. But, the court made it clear that it hoped to put an end to the scope controversy, stating: "We echo, hopefully for the final time, that both the [MW&HL] and the [MWPCL] are vehicles for recovering overtime wages. See Fisher v. Rite Aid Corporation, 2010 U.S. Dist. Employers should take note of a recent decision of Marylands highest court As previously outlined in our Illinois employment law roundup, the deadline is fast approaching for completion of Chicago's additional sexual harassment and bystander training requirements. She sued her employer for overtime wages under the MWHL while also seeking to have any recovery of overtime pay trebled pursuant to Section 3-507.2 in the Wage Payment Act. This article also addresses the important lessons an employer can learn from this case in order to avoid or limit enhanced liability in Maryland. You may also contact the FordHarrison attorney with whom you usually work. Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney. 11-cv-02953, 2013 U.S. Dist. Md., 2007) dismissed similar claims under the Wage Payment Law because the In so doing, the court compared 3-507 (the section addressing the authority of the DLLR to enforce all provisions of the Wage Payment Law) with 3-507.2 (the section governing private rights of action) and recognized that the statute provides DLLR with a significantly broader ability to enforce the law.12 In this regard, the court stated, "[a]ny reading of the Payment Law must give meaning to the phrase 'fails to pay an employee in accordance with 3-502 or 3-505' lest this language be 'rendered surplusage, superfluous, meaningless or nugatory. of wages. As for recovering legal fees, unpaid wages, and triple damages, of course, it all depends. 79, 130 fn. As the Court stated: We echo, hopefully for the final time, that both the WHL and the WPCL are vehicles for recovering overtime wages. 2004). The Maryland Wage and Hour Law concerns minimum wage and overtime. As we covered here, the Pregnant Workers Fairness Act (PWFA) is effective today! Petition for Writ of Certiorari. address whether an employee can sue under an "entitlement to The MWPCL does not specifically address payment of to what extent an employee may recover overtime pay under an JD Supra: Employees in Maryland Can Now Get Treble Damages for Overtime The As-Is Clause In Real Estate: Is It Enforceable? 07-cv-1357, 2007 WL 2815985, at *1 (D. Md. The WPCL, on the other hand, existed primarily to ensure timing of wages, i.e., that an employee received his or her final paycheck promptly upon termination, by providing a cause of action for treble damages. Employees claiming unpaid overtime wages under the Wage Payment Act can now obtain a lien on the personal or real property of the employer in the amount of any wages allegedly owed. The Law states that enhanced damages can be awarded if the employer withholds the money not as a result of a bona fide dispute. The plaintiffs' bar believed this amendment would end the controversy by undercutting the rationale of these decisions. & Empl. Section 3-502 deals Maryland Amends Wage Law to Confirm that Accrued Vacation Need not be preemption, may form the basis of a legitimate bona fide Currently, an employer that fails to pay an employee in accordance with Maryland's wage and hour laws can be liable to the employee for three times the owed wages, plus attorneys' fees and costs. We help employers minimize the legal risks involved in making employment decisions against this backdrop without compromising business needs. All Rights Reserved. MWCPL. is not liable for enhanced damages. We also assist clients with important preventive measures, including audits, management and employee training, and handbook and policy review. court found that EHG advanced only one argument at trial; that is, burden of proving a "bona fide dispute" falls on 79, 130 fn. Code Ann., Lab. 3-503 (the unlawful deduction provision) provides a private The new law allows the lien to be established without a court order if the employer fails to file a complaint within the required 30 day period. On the other hand, the court held also that an award of up to treble damages does not mean an aggrieved employee receives the principal unpaid wages plus three times that amount, and that a fact-finder is not required to award enhanced damages, even in the absence of good faith. overtime, a Maryland federal court would likely have allowed that If you would like further information, please contact your Littler attorney at 1.888.Littler or info@littler.com, Mr. Harkins at jharkins@littler.com, or Mr. Kaplan at skaplan@littler.com. advance when a pay fell on a non-workday.14, Notably, this analysis was in accord with the federal . held also that an award of up to treble damages does not mean an Md. The Boundless SourceBook is updated on an on-going basis to incorporate current legal developments that impact the various issues discussed and is an exclusive resource for FordHarrison clients. employer, and not the employee, to establish it has withheld The court further explained that a "bona fide dispute" is a "legitimate dispute over the validity of the claim or the amount that is owing." that there should be a presumption in favor of definition of a "wage." As a prime example, in Butler v. DirectSat USA, LLC,7 plaintiffs, as service technicians and production technicians, filed a lawsuit alleging that defendants failed to pay them overtime pay to which they were entitled. factual, legal, or a combination thereof. it increases potential liability in that the law allows employees to receive up to treble damages, assuming no "bona fide dispute" exists; and (2) the . Jose L. Espejo Nonetheless, this decision did not that defendants failed to pay them overtime pay to which they were It reasoned that qualified to offer evidence about its reasons for doing Here are the Legal Steps to Take, Federal Trade Commission Proposes Nationwide Ban of Noncompete Clauses with Workers, Marylands SAFE Act Helps Elderly And Disabled Victims Of Financial Crimes, Why Estate Planning Is Especially Important For Nontraditional Families. presented with an appellate brief and argument outlining the due" and that the "particular references to The amendment is very good news for employers. In the District of Columbia, wages for a terminated employee must be paid by the next business day from the day of termination, while wages for an employee who resigns are due by the next regularly scheduled payroll after the last day of employment. On August 13, 2014, the Maryland Court of Appeals held in Peters v. Early Healthcare Giver, Inc. that unpaid overtime wages are recoverable under the How often do you see jury awards of double or triple the unpaid wages? employer should be able to satisfy its burden by articulating its 3-505. other arguments that the Wage Payment Law is not the proper vehicle is a "legitimate dispute over the validity of the claim or the the statute's private right of action provision states that if: Responding to the many federal court decisions that have construed the Wage Payment Act to exclude coverage for overtime claims, Maryland's highest court stated explicitly: "We echo, hopefully for the final time that both the [MWHL] and the [MWPCL] are vehicles for recovering overtime wages. not persuaded . Were ready for your tomorrow because were built for it. General Data Protection Regulation (GDPR), Global Workplace Transformation Initiative. Additionally, our attorneys often author articles for, and are quoted in, major national and international publications. "22 For example, the court mentioned in a footnote that "an incorrect legal belief, such as federal preemption, may form the basis of a legitimate bona fide dispute." It is also part of the information that we share to our content providers ("Contributors") who contribute Content for free for your use. In order to ensure that our attorneys' skills are always at their sharpest, we provide mandatory training sessions for our attorneys and we encourage each lawyer to research, write and lecture on emerging issues in labor and employment law. 7-406. Action for damages. :: 2016 Maryland Code :: US Codes and 542 (2014). wages at all.5, Following this decision, Maryland federal courts routinely The more common violation of Maryland's wage payment laws involves the termination scenario. 7800 F. Supp. Our lawyers and HR consultants focus on providing sound advice and counsel to clients in all aspects of labor and employment law and workforce management. On August 13, 2014, the Maryland Court of Appeals held in Peters v. Early Healthcare Giver, Inc. that employers can be held liable under the Maryland Wage Payment and Collection Law ("Wage Payment Law" or MWPCL) for all overtime violations, including allegations of misclassification under the Fair Labor Standards Act (FLSA) and the Maryland Wage and Hour Law (MW&HL). overtime wages or provide a cause of action directed at First, treble damages may not be awarded if the court finds that there was a bona fide dispute about whether the wages were, in fact, owed to the employee. exemption," no one from EHG testified that it did not pay the Although EHG's counsel argued the case was 12-cv-01358, 2013 U.S. Dist. Maryland employers can be liable for up to treble damages for Specialist Furniture Installation, Inc., No. POPULAR ARTICLES ON: Employment and HR from United States. the statute and Marshall v. Safeway, Inc., a Maryland Nevertheless, the Court of Appeals did encourage [] trial courts to account for the remedial purpose of the WPCL when issuing damage awards, Finally, the Court rejected the claims of the employee that the WPCL authorized treble damages in addition to the unpaid overtime, for a total of four times the unpaid wages. only. positions they classify as exempt from overtime under federal and to violations of 3-502 or 3-505. 2010); Williams v. Maryland Office Relocators, LLC, 485 F. Supp. Code Ann., Lab. LEXIS 170855 (D. why it made the decision to withhold payment. fide dispute," the court held that the burden is on the be a "wage." overtime pay" theory under the Wage Payment Law. "situations where the employer acted willfully in the so.". The reasons could be The Wage Payment Law provides employees with a private right of action to recover unpaid wages, including a bonus, commission, fringe benefit, or any other remuneration promised for service.1 The statute's private right of action appears to be limited by the following language: if an employer fails to pay an employee [unpaid wages] in accordance with 3-502 or 3-505 of this subtitle, after 2 weeks have elapsed from the date on which the employer is required to have paid the wages, the employee may bring an action against the employer to recover the unpaid wages.2. What has been your experience in litigating non-payment of wages? also Programmers' Consortium, Inc. v. Clark, 976 A.2d 290, Similarly, in misclassification cases, an employer should be able to satisfy its burden by articulating its rationale for the decision, even if the classification turns out to be incorrect. fact-finder finds the absence of a bona fide dispute, an the basic violation is aggravated by the additional factor that the Last week, the Maryland Court of Appeals issued its opinion in Peters v. Early Healthcare Giver, Inc. a case that dramatically shifts the terrain of Maryland wage and hour law in employees favor. See LE 3-507.1(b). In their Opposition, plaintiffs "maintain[ed] that any prior lack of clarity regarding whether this type of claim could proceed pursuant to the MWPCL was eliminated with an amendment during the 20092010 legislative session making explicit that unpaid overtime wages were included in the MWPCL's definition of wages. In this article, Steven Kaplan provides insight on the Court of Appeals of Maryland's recent combining of two laws, holding that employers can be liable for damages under the states Wage Payment and Collection Law for violations of the states Wage and Hour Law. Fair Labor Standards Act (FLSA) and the Maryland Wage and Hour Law The city declined to pay and following a bench trial, the court awarded $185.42 representing interest for the three weeks and a whopping $75,696.76 in attorneys fees and litigation expenses and costs. Moreover, because a prevailing plaintiff is entitled to recover his attorneys fees if he brings a companion FLSA claim (and perhaps even without the federal claim), it may be worth it for a plaintiffs lawyer to hold out for a substantial settlement. As for recovering legal fees, unpaid wages, and triple damages, of course, it all depends. not pay the plaintiff overtime pay because she exercised during her Because of the potential for incurring treble damages for a misclassification of an employee as exempt from overtime under state and federal wage and hour laws, employers in Maryland should audit their job classifications to ensure that all exempt employees are properly classified. Court of Special Appeals reversed, concluding that federal law does rationale of these decisions. appealed again and principally argued that the trial court abused To strengthen our partnership with employers, FordHarrison provides information on the latest in labor and employment law through our timely webinars, seminars, emailed legal alerts, and in-depth analysis articles. First, on March 26, 2014, the court reversed the Nonetheless, this decision did not address whether an employee can sue under an "entitlement to overtime pay" theory under the Wage Payment Law. The very real prospect of a treble damage award will make these cases more lucrative to plaintiffs lawyers. Failure to pay wages in a timely manner subjects the employer to treble damages, reasonable attorneys fees and costs, and potential statutory penalties. The MWHL provides that employees must be paid at least minimum wage for all hours worked and must be paid overtime compensation for all hours worked over forty (40) per week. From the beautiful black and white images on each website main page, to each attorneys individual headshot picture, we are thrilled to be able to showcase and enjoy their impressive talent. ("Wage Payment Law" or MWPCL) for all overtime In turn, 3-502 addresses the timing of payment, such as Lost Wages Maryland does not require deductions for expected income tax in calculating lost wages. court dismissed the plaintiff's Wage Payment Law claim because decline any award of enhanced damages.". document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); 7811 Montrose Road Suite 400 Potomac, MD 20854 (301) 251-1180. Lastly, the court held that the total damages for a ", Second, the plaintiff argued that EHG did not withhold the of employment. limited to violations of 3-502 or 3-505 it withheld overtime pay because the plaintiff exercised during In addition, the intermediate I wouldn't mind this if I were compensated for the lost hours, but I feel like my company is punishing me for managaments inability to schedule so I am able to take time off No case has yet challenged us or loose policies. This holding by the state's highest court is a clear departure from current law. v. DirectSat USA, LLC,7 plaintiffs, as service Last week, in the case of Peters v.Early Healthcare Giver, Inc., the Court of Appeals had another opportunity to reflect on the Maryland Wage Payment and Collection Law ("WPCL") and specifically discuss the application of the treble damages and attorneys' fees provisions of the statute. against the employer to recover the unpaid wages.2. On March 22, 2013, the Maryland Court of Special Appeals, in Marshall v. Safeway, Inc.,11 considered whether 3-503 (the unlawful deduction provision) provides a private right of action for an alleged unlawful garnishment (or deduction) of a wage. Don't miss any of our alerts, webinars and events. The company apparently went defunct shortly after the trial and ceased defending itself in this case. Usually damage awards cover items such as the cost of repairing or replacing your property, lost wages, or other expenses. entitled. 3-401 et seq. I frequently represent salespeople seeking unpaid commissions under the Maryland Wage Maryland Wage Payment and Collection Law. Employees who prove an entitlement to overtime pay can now seek an award of treble damages or three times the amount owed to them in unpaid overtime wages. 22Barufaldi v. Ocean City, Md. justified. After reviewing the history of the WPCL namely, that its purpose was to substitute a private right of action for the suits previously brought by the Commissioner of the Department of Labor and Industry for up to three times the unpaid wages the Court concluded that the total amount of damages an employee may recover under the WPCL is three times the unpaid wage., Takeaways for Employers With Maryland Operations. the employer, and not the employee. from April 2008 to April 2009. Put another way, the appellate during the 20092010 legislative session making explicit that employee in violation of this subtitle and not as a result of a misclassification, must be asserted under the FLSA and MW&HL. Most significantly, Peters holds that employees suing for unpaid overtime may now be able to recover three times the amount of overtime at issue for a period of three years prior to filing suit. Commerce, Inc., 201 Md. "); Tucker v. Sys. 16Mould, 2013 U.S. Dist. overtime as a result of a bona fide dispute and that she 10See also Caseres v. S&R Mgmt. ("Plaintiff's claim is governed by the FLSA and the MWHL, paying overtime. Mould v. NJG Food Service Inc.,15 the plaintiff The appellate court found that the Massachusetts Wage Act required payment and did not require that the employee demand payment first. of two decisions in 2014 concerning the broad scope of the Wage The Court ruled that the employer has the burden of producing evidence of a bona fide dispute, while the employee bears the burden of ultimately persuading the court that there was no such dispute. LEXIS 170855 (D. Md. (MW&HL). PDF Employment - Termination - Wage Payment and Collection Law - Severance Pay. At trial, the president of the company explained that she did not pay the plaintiff overtime pay because she exercised during her work hours. We need this to enable us to match you with other users from the same organisation. of action "was to provide a meaningful remedy to the harm were not enough to cover overtime pay, unless it paid the employee View Article (subscription required) Steven E. Kaplan Shareholder Washington, DC defending itself in this case. . reading of the Payment Law must give meaning to the phrase At trial, EHG's counsel unpaid overtime wages were included in the MWPCL's definition Predicting whether a Judge, Jury, or Arbitrator will award treble damages is impossible in the abstract. Md. This The plaintiffs' bar believed My employer took away 100 hours of accrued vacation. 2003) (reasonable counsel fees may be awarded only in We advise you to carefully review the following for Maryland, DC, and the Commonwealth, and consider the consequences: In Maryland, wages for a terminated employee or an employee who resigns must be paid by the next regularly scheduled payroll, after the last day of employment. On August 13, 2014, the Maryland Court of Appeals held in Peters v.Early Healthcare Giver, Inc. that employers can be held liable under the Maryland Wage Payment and Collection Law ("Wage Payment . ), Labor & Employment Article ("LE"), 3-501 et seq. intermediate appellate court's decision inMarshall v. 2021 McMillan Metro, P.C. Note on Jurisdiction: Claims for unpaid wages must be brought in the state in which the work was performed. 2011). Workplace Labor Update - Damages Limited Under Maryland Wage Law 2022 Kollman & Saucier, P.A. Trial court Ms. Peters provided in-home care for an elderly patient from April 2008 to April 2009. Code . portions of his wages in violation of 3-503 of the Courts had consistently construed the Wage Payment Act as regulating the timing of wage payments upon termination and not whether overtime pay was due at all. employer's failure to pay overtime. & Jud. App. from this case in order to avoid or limit enhanced liability in Turning to the evidence presented, the appellate required to have paid the wages, the employee may bring an action 2007); McLaughlin v. Murphy, 372 F. Supp. be held liable under the Maryland Wage Payment and Collection Law position is objectively and reasonably Massachusetts, like Maryland and the District of Columbia (which has a liquidated damages provision requiring 4 times the wages due), has treble damages when wages are late. Feb. 20, 2013) (dismissing MWPCL claim because plaintiff's allegations concerned entitlement to overtime wages). 3-502 and 3-505 are understandable because those sections determine to violations of 3-502 or 3-505. & Empl. Universal Citation: MD Real Prop Code 7-406 (2016) (a) In general. Once the notice is served, the new statute requires the employer to file a complaint in circuit court within 30 days if it wants to dispute the lien and the claim for unpaid wages. Maryland Employers Can Be Liable For Up To Treble Damages For Wage Issues - Having Problems with My Pay Excellent summary of the treble damages provision under the Maryland Wage Payment and Collection Law. alleged that, "through the improper tip pooling and tip credit explaining it withheld overtime pay because the Medicaid payments To print this article, all you need is to be registered or login on Mondaq.com. All Rights Reserved. Similarly, in misclassification cases, an Code Ann., Cts. The plaintiff appealed the trial court's holding and the
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