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On June 23, 2015, Conn. Gov. Dannel P. Malloy signed into law a new statute that imposes double damages on employers who fail to pay an employee minimum wage or overtime. With one exception, the new law requires a court to award double damages plus court costs and attorney’s fees if it finds that an employer has (1) failed to pay an employee’s wages, accrued fringe benefits, or arbitration award or (2) failed to meet the law’s requirements for an employee’s minimum wage or overtime rates.
“An Act Concerning an Employer’s Failure to Pay Wages” (Public Act 15-86) will take effect on Oct. 1, 2015. It applies to private and public employers of any size, including the state and municipalities. Notably, the legislation overrules well-established Connecticut Supreme Court precedent that awards for double damages and attorney’s fees are inappropriate without a trial court’s finding of bad faith, arbitrariness or unreasonableness.
Public Act 15-86 provides that if an employee is paid less than the minimum wage or overtime wages to which he or she is entitled, the employee may recover in a successful civil action twice the full amount of the minimum wage or overtime wages less any sum paid by the employer, plus costs and reasonable attorney’s fees. The court will determine costs and attorney’s fees. If the employer can establish it had a good faith belief that the wages paid were in compliance with the law, the employee may recover the full amount of the correct wages less any amount paid by the employer, with costs and reasonable attorney's fees. Note that the act does not define what will satisfy the “good faith” standard, although it is reasonable to expect that courts will likely follow the “good faith” exception that applies to Fair Labor Standards Act claims.
An agreement between an employee and an employer to work for less than the minimum wage or overtime wages is no defense to an action under the new legislation.
Public Act 15-86 also provides that the Commissioner of the Connecticut Department of Labor may collect the full amount of unpaid minimum wages or overtime wages to which an employee is entitled along with interest calculated from the date the wages should have been received. The commissioner also may bring legal action to recover double damages, and the employer will be required to pay costs and reasonable attorney’s fees. Wages collected by the commissioner for an employee whose whereabouts are unknown will be held for three months, after which time the commissioner may release the funds to the employee’s spouse or next of kin, provided that the claimant has proof of the relationship, executes a bond of indemnity, and gives a receipt for payment. Wages held for two years without being claimed will go to the state.
Public Act 15-86 provides that an employee or a labor organization representing an employee shall recover double damages in a successful action to enforce an arbitration award that requires an employer to make an employee whole or to make payments to an employee welfare fund. The employee or labor organization may recover twice the full amount of such wages or payment, in addition to costs and reasonable attorney’s fees. If the employer can establish it had a good faith belief that the wages paid were in compliance with the law, the employee or labor organization may recover the full amount of such wages or compensation, plus costs and reasonable attorney’s fees.
Finally, Public Act 15-86 authorizes the commissioner to collect the full amount of any unpaid wages, payments due to an employee welfare fund, or arbitration award, and interest calculated from the date the wages or payment should have been received. The commissioner also may bring legal action to recover twice the full amount of unpaid wages, payments due to an employee welfare fund, or arbitration award, and the employer will be required to pay costs and reasonable attorney’s fees. The commissioner will then distribute the amount recovered to the appropriate person.
Recommendations for Employers
Employers should have experienced employment counsel review their pay practices. As noted above, there may be a safe harbor defense if the employer can establish it had a good faith belief that the wages were paid in compliance with the law. Consultation with and reliance on counsel is advisable under the new state law.
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