Friday, January 23, 2009

Triple Damages Standard Under the Maryland Wage Payment and Collection Law

I recently won a verdict at a bench trial (no jury) that included enhanced damages under the Maryland Wage Payment and Collection Law. The Law allows an employee to recover up to three times the amount of earned unpaid wages. I am frequently asked what the standard is for awarding enhanced damages. 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 Maryland Courts have interpreted this to mean that enhanced damages can be awarded if the employer withholds wages in bad faith. With any evidence of bad faith the issue should go to the jury.

How does this translate to a jury trial? Below is version of an instruction I suggested the Court give to the jury on this issue:


The Maryland Wage Payment and Collection Law authorizes employees and former employees to recover up to three times the amount of unpaid wages if the withholding of payment was not the result of a bona fide or good faith dispute.
If you rule in favor of the Plaintiff on his claims under the Maryland Wage Payment and Collection Law, you must determine whether the Defendant's refusal to pay the Plaintiff all or part of his earned commission, bonus, or severance was not the result of a good faith dispute.
An employer may be liable for treble damages for all or any portion of the amount claimed.
If you find that the withholding of all or part of the commission, bonus or severance was not the result of a good faith dispute, you may award up to three times the amount of the commission, bonus or severance that was not the result of a good faith dispute.

Sadly, Not Much To Contest About an Across-The-Board Pay Cut.

A reader recently asked:


I've read over your blog and must thank you for posting all of the information. Your blog is very helpful. I have a question that I would like to ask you that I am having trouble finding an answer to. All salary and hourly employees at the company I work for have been told that a mandatory pay cut would be put into effect on our next pay cycle. What laws exist in the state of Maryland in regards to this?


I wrote back:

Not much. Employers cannot take back money that already been earned (i.e., commissions and bonuses), and must give one paycheck notice of a pay cut.

I add: of course the decision to make the cut must be non-discriminatory and cannot reduce an employee's wages below the minimum wage.

Monday, January 12, 2009

Maryland Flexible Leave Act Likely to Be Amended

Last session the General Assembly passed the Maryland Flexible Leave Act. The Act requires employers with 15 or more employees that provide paid leave to allow the employee to use earned paid leave to care for the illness of an immediate family member (child, spouse, or parent). The Maryland Department of Labor has provided a synopsis here. Employers are prohibited from retaliating against individuals who take protected leave.

The Maryland Chamber of Commerce reports significant support to amend and clarify the Act by adding definitions. I hope to add a link to the proposed amendments when the bill is introduced.

Maryland Department of Labor to Push Bill Increasing Penalties for Mislcassifying Employees as Independent Contractors

It will be a difficult General Assembly session with our State facing nearly a $2 billion deficit. Our State Department of Labor (the DLLR) will be pushing a bill to stiffen the penalties for misclassifying employees as independent contractors for unemployment and workers compensation. Since such a bill should produce revenue it might have a better chance of passing this year.


An article in the Daily Record has this to say about the bill's likely features:

Though [DLLR Secretary] Perez said his department had not completed the legislation it will propose this year, he said the law could be a better deterrent than the “slap on the wrist” that employers now get for underpaying for unemployment or workers’ compensation. That usually involves an order that employers make back payments and may include fines.

The bill proposed last year by DLLR would have created new civil penalties including $3,000 fines for misclassification, but Perez said the violation should be referred to as “workplace fraud.”