When record amounts of unpaid back wages are recovered for employees, that’s a good thing – right?
Or, is it proof that wage theft by employers has not only continued to occur, but now happens at an increasing rate…despite the administration’s efforts towards “compliance assistance” and the PAID program that allows employers to resolve back pay claims at a significant discount?
For more information about the PAID program, see our prior post: Getting PAID – What Employees Need to Know if Employers Who Cheat on Overtime Pay Take Advantage of “PAID.”
Where DOL’s Concerns Really Lie
While DOL says that it “…is committed to ensuring that workers receive the wages they have earned,” it seems less concerned with ensuring that employers who violate the labor laws fully compensate workers who have been denied full and proper payment of hard-earned wages. When an employee is not paid the overtime they are owed, the law provides for “liquidated damages” to compensate the worker for the loss of use of those funds – the time value of money, which can be very high when the family budget is tight.
Liquidated damages double the employer’s liability (they have to pay workers $2 for every $1 in unpaid overtime) and act as a deterrent for violating the overtime pay laws. If, as under the PAID program, an employer who cheats workers on overtime pay is only required to pay back the original amount it should have paid (months or years later), there is very little disincentive – they get to “borrow” money from workers for free. Unfortunately for workers, the DOL has taken a very business-friendly approach towards overtime pay violators – allowing them to settle claims without any extra compensation to workers for their loss of use of the money they should have received. Fortunately, the DOL is not the only resource workers have. Employment law attorneys who focus on wage and hour / overtime cases, typically handle these on a contingent fee basis (no fees if there is no recovery) and have a much greater incentive to pursue all damages legally available, including liquidated (double) damages and attorney’s fees.
For more information on overtime pay laws or to learn if you have a case, visit us at The Lore Law Firm.
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