Ideally, employers that are faced with valid overtime or minimum wage claims should focus on working with their attorney to accurately evaluate their exposure and identify the most efficient way to resolve the claim. While this advice seems self-evident, too often employers do not heed it. Instead, frustrated by the cost of defending the claim and potentially settling it, and stung by the fact that the employees are ungrateful for all of the money they have been paid, employers often focus on the shortcomings of the claiming employee(s) and on the many reasons why those employees do not deserve to be paid anything more than what they have already received. That is an ill-advised approach and should be avoided.
Deflecting is Short-Sighted
First, it distracts the employer from focusing on gathering and communicating the facts, data, and documents that their attorney actually needs to evaluate the claim and provide advice as to how to proceed.
Second, it clouds the employer’s judgment when it is time to make the decision as to whether to settle the claim, turning what is usually a business decision into a personal one.
Third, it does not help the employer’s case. Rarely does an employee’s consent to how they are paid, or the employee’s legal status, performance, attitude, or personal conduct have any effect on their right to pursue a wage and hour claim or the potential success of such claims.
One example that arises—often in cases against employers in the service industries such as restaurant owners, cleaning companies, and construction contractors—is the employer’s focus on employees’ immigration status or their unwillingness to fill out an I-9 or W-4. Not only will these facts not prevent the employee from recovering, but they actually expose the employer to liability for violations of federal and state law. Any attempt to use the employee’s status against them, and any implication that the employer will report the employee to state or federal authorities, will be viewed as retaliation against the employee and will likely increase the employers’ potential lability.
Most Excuses are Not Legally Justified
Similarly, “My employee requested that I pay him by the day,” “My employee agreed to accept more money per hour and not receive overtime pay,” or, “My worker asked me to classify him as a 1099 independent contractor instead of an employee,” will not absolve an employer from the consequences of failing to maintain records and pay employees as required by law. Ultimately, the governing state and local statutes and regulations place the responsibility for verifying the legal status of employees and compliance with applicable deduction, withholding, and record-keeping squarely on employers and their claims that they violated those laws as a favor to their employees will not protect them.
Citing employees’ substandard performance as a basis for an offset against unpaid wages owed in a wage and hour case is likewise a non-starter. Even if employees showed up to work drunk, did not meet productivity expectations or workmanship standards, or were guilty of other misconduct while on the job, they must be paid for the time they worked. The time to discipline or terminate an underperforming employee is when the conduct is occurring. It is too late to attempt to “clawback” wages for non-productive time on the job after a wage and hour claim is filed and wage laws strictly limit the circumstances under which an employer may make a deduction from wages.
In a perfect world, employers would carefully comply with all statutes and regulations as they pertain to employee documentation, record-keeping, and compensation. However, in the real world, when an employer faces a legitimate wage and hour claim, they should avoid the urge to finger point or blame-shift. Instead, they should focus on the legitimate defenses available, the efficient resolution of the claim, and implementing the fixes needed to avoid future claims.
If you have received a wage and hour demand letter or lawsuit, or if you want to have your employment practices reviewed to limit the possibility, please contact us at (410) 522-1020 to schedule a consultation.