Employees Win Many Pay Disputes

Employees who take complaints about unpaid wages to their state labor departments have an excellent chance of winning, a spot check of five populous states indicates.

Last year employees won 69% of their pay disputes in New York, 64% in California, 50% to 55% in Illinois, 49% in Pennsylvania and 48% in Texas.

“Most employers are fundamentally honest, and fewer than 2% of complaints brought by employees are false,” said Chief Counsel H. Thomas Cadell of California’s Division of Labor Standards Enforcement in San Francisco. But both employers and employees make mistakes, he said.

“An awful lot of employees after their discharge will come in and want that first week’s [pay] that was held back from their wages,” he said. “You have to convince them that, yes, they have been paid all their wages.”

“I’ve seen instances where employees swear they’re owed money, but after an investigation and after payroll practices are explained, they are not,” he added.

As for employers, “They can make a mistake when they are unfamiliar with the law, and California law is very protective of employees,” Cadell said.

“They may pay a week late and they can see nothing wrong with that, but it’s against the law. And if you fire someone you have to pay them right then,” he said.

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In some states, people still employed when they file a pay claim may put themselves at risk.

An employee who brings a pay action before the Texas Employment Commission is not protected from retaliatory firing. Workers are protected from such discharges in Illinois, California and Pennsylvania.

Pennsylvania employers are subject to fines and imprisonment of up to 90 days for a retaliatory discharge, Bureau of Labor Standards Director Helen Friedman said.

Last year, about 75,000 Californians filed claims against their employers, mostly over the failure to pay wages, Cadell said, but one case in 10 was over vacation pay.

Each complaint is investigated through a quasi-judicial system. In cases in which the state elects to hold a hearing, a ruling favorable to the employee becomes a judgment if not appealed within 10 days. A California employer who fires an employee for bringing a complaint can be ordered to reinstate the worker with back pay.

In Illinois, wages and vacation pay must be paid within a week of an employee’s discharge, said Syvia Katskee of Chicago, associate director of the state Department of Labor.

Last year, the department received 8,000 claims for wages, commissions, and vacation pay from employees, about 50% to 55% of which were resolved in favor of the employees, Katskee said.

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Pennsylvania received 2,371 complaints for unpaid wages last year, 49% of which were resolved in favor of employees, Friedman said. The state does not require employers to pay wages owed at the time of discharge.

Texas requires terminated employees to be paid back wages within six days, spokesman David Beshear of the Texas Work Force Commission said. Vacation pay is paid at termination “only in accordance with individual company policy,” he said, and “if the policy says vacation will not be paid no money is owed.”

In New York, the most recent data available (for the first five months of 1995) show the State Department of Labor investigated 2,666 establishments over wage disputes and found 1,839--or 69%--in violation, Fred Padula, communications officer, said.

“It’s not a huge problem by any stretch of the imagination,” Padula said. “Businesses are very reputable and very conscious of meeting what the law requires.”

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A number of states do not adjudicate employee pay claims but refer them to the offices of the U.S. Department of Labor, which can investigate them under the Fair Labor Standards Act.

Terry Burger, district director of the Department of Labor’s Kansas City office, estimated the U.S. government receives about 1,000 pay complaints a year in Missouri.

Most of these are filed by employees but some are lodged by unions or an employer’s competitors.

“If we run into an employer who has repeatedly violated the law, there are civil money penalties that could run up to $1,000 per violation,” Burger said.