3 Issues To Consider In Resolving Unpaid Wage Claims

by | Aug 17, 2011 | News, Wage and Overtime Law

Unpaid Wage Claims Raise Numerous Issues, But At Least Consider These Three

1.  Wages are taxed.

When you are an employee, you routinely have money withheld from your paychecks for taxes and FICA. When you resolve an unpaid wage claim (involving minimum wages or overtime pay), whether by settlement or judgment, the portion of the settlement which is intended to pay you unpaid wages likely will have taxes and FICA deducted from the amount actually paid (by check) in the settlement. So, you will actually receive a check for less than the amount of unpaid wages you are owed because taxes and FICA are being paid.

2.  Many employers insist on confidential settlements.

Employers who have violated the wage and overtime laws for one employee probably have done so to other employees. If you have brought a claim, then the employer may want to settle only your claim and not have the other employees start claiming their unpaid wages. What many employers will do is demand that a settlement be confidential and have the former employee sign a settlement agreement which contains a confidentiality provision. This means that you cannot go and talk (or “brag”) about your settlement. You get your money and move on.

3.  Employers are penalized by statute – only.

Employers who commit wage theft – by failing to pay minimum wages or overtime pay – are penalized by having to pay not just the unpaid wages plus interest, but also an amount equal to the minimum wages or overtime pay which was not paid before, as well as attorneys’ fees, costs, and interest on the unpaid wages. Workers who bring claims may want to penalize the employer more for such reasons as not being paid the right wages for months or years or because they incurred costs or fees for not paying bills; however, the employer is penalized – by statute (whether the Fair Labor Standards Act or Chapter 448, Florida Statutes) – and claims like emotional distress and punitive damages are normally not available.

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