What You Need to Know About Suing An Employer for Incorrect Wages
An employee could receive a paycheck with a dollar amount lower than expected, resulting in their desire to sue their employer. Here’s everything you need to know about suing an employer for not paying you correctly.
An employer can incorrectly pay an employee, whether mistakenly or intentionally. Federal and state law protects workers who do not receive their deserved pay.
First Steps for Suing an Employer for Incorrect Payments
Parties who feel they have received incorrect wages can sue their employers with the help of the Wage-Hour Division of the U.S. Department of Labor or on their own.
Employer Withheld Wages
Unpaid wages are when employers fail to pay wages owed to an employee. Unpaid wages are also called withheld salaries or wages.
Unpaid wages may occur when:
- An employer fails to pay overtime wages,
- An employer fails to meet minimum wage requirements,
- An employer intentionally miscategorizes an employee and pays them less,
- Administrative errors occur,
- An employee completes services but receives no pay,
- Disputes regarding paid leave or benefits, and
- The employer does not properly reimburse business expenses.
Parties should notify their employer when an employer withholds wages, as it might be a mistake. After this step, if it is clear an employee is a victim of wage theft, unlawful deductions, shorter hours, or any other form of withheld wages, they have rights.
Related: Can I Sue My Employer for Firing Me Under False Accusations?
Missing Wages for Days Worked
Parties need to record the hours they work for each relevant pay period. If employers do not receive a paycheck reflecting their hours worked, they may claim their correct wages and any additional damages incurred from receiving the incorrect paycheck.
If the employer’s actions are a mistake, the employer and/or the bank may voluntarily agree to cover a party’s additional incurred expenses. Parties can communicate directly with their employer or contact their Human Resources department if they believe a mistake has occurred.
Federal Laws on Wages
Federal law requires employers to pay at least minimum wage for hours worked, as enforced by the Wage-Hour Division of the U.S. Department of Labor.
The federal agency cannot help parties who receive federal minimum wage, $7.25, for their work hours.
States Laws on Wages
Some states require employers to pay employees for all hours worked at regular intervals, i.e., biweekly or semimonthly. State laws may have consequences for employers, such as prosecution, for not complying with the law.
Parties should contact the state agency handling wage and hour/labor standard violations in states with their wage and hour laws.
If a party’s state does not have a specific law covering their situation, they should consult with the Department of Labor and/or a local attorney to determine how to proceed.
Related: Can I Sue a Former Employer for Slander?
Suing an Employer for Incorrect Wages
Parties can file a complaint of unpaid wages under the Fair Labor Standards Act (FLSA) through the Wage-Hour Division (WHD) or alone. The Wage-Hour Division may pursue the complaint on a party’s behalf, but parties can file their lawsuit in court if they do not.
The statute of limitations for recovery of back pay is generally two years. For intentional violations, a three-year statute of limitations may apply. Parties should not wait to file their claim, as they might have other legal claims with shorter deadlines.
A court may criminally prosecute willful labor laws violations, and violators may face up to $10,000 fines. Employers who repeatedly violate the minimum wage requirements are subject to a penalty of up to $1,000 for each violation.
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