Hunton Employment & Labor Law Perspectives : Employment Lawyers & Attorneys : Hunton & Williams Law Firm : Labor Law Legislative Updates

The WTPA also requires notice beyond the hiring and annual notice periods discussed above.  Along with every wage payment, employers must provide the following information: dates of work covered; employer’s address and telephone number; the rate of pay and the manner in which it is paid (hourly, salary, commission, etc.); gross wages; net wages; deductions; allowances against minimum wage; and for non-exempt employees, the regular rate, overtime rate, and the number of regular and overtime hours worked.  Such records must be maintained for six years.  And, if the employer plans to make any changes relating to an employee’s wage payment, employers are also required to provide the employee with seven days written notice of the changes prior to the changes taking effect.

Penalties for Violation of the Notice Requirements:

Along with the new notice requirements came more exposure to employers for violation of such notice provisions.  Failure to provide the required notice within ten business days of an employee’s hire date subjects the employer to an action for damages of $50 per workweek (up to a maximum of $2,500) plus costs, attorney’s fees and injunctive relief.  Similarly, employers who fail to provide employees with the wage information in each payroll statement are facing an action for damages of $100 for each week  (up to $2,500) plus costs, attorney’s fees and injunctive relief.  In either case, if the Commissioner brings the action, there is no cap on damages.

Penalties for Violation of Wage Payment Provisions:

The WTPA has also made wage payment violations that much more costly for employers.  Under the current law, the Commissioner can seek attorney’s fees and liquidated damages of 25 percent of the total unpaid wages due.  The WTPA increases that number to 100 percent of the unpaid wages due.  Moreover, whereas the Commissioner currently has discretion to seek liquidated damages, pursuant to the WTPA, he/she now must seek liquidated damages and must seek recovery of the full amount of underpayment.  Failure to pay minimum wages or overtime compensation may also result in a misdemeanor conviction, with a minimum fine of $500 and a maximum of $20,000, or imprisonment up to one year.  A second violation within six years may be prosecuted as a felony.

Penalties for Retaliation Against Employees:

The act also stiffens penalties against employers for retaliation against employees who make complaints regarding conduct the employee reasonably and in good faith believes is a violation of the wage payment laws.  In addition to reinstatement, back pay and front pay, retaliation victims can also collect liquidated damages of up to $10,000.  Repeat offenders and employers whose violations are found to be “willful or egregious” are now subject to treble damages (double the wages due, plus liquidated damages of 100 percent).

What Employers Should Keep In Mind:

It is important for employers to keep the above notice and payment requirements in mind, and to ensure that all employees are properly and timely notified and paid for their services.  And, employers should not wait for complaints from their employees regarding notice violations.  While an employer may be able to avoid the penalties discussed above if it made complete and timely payment of all wages to the employee(s) in question or the employer reasonably believed in good faith it was not required to provide the notice, employees aware of violations are incentivized to not report notice violations until months after the fact, in order to allow for the weekly damage amounts to accrue.  An organized human resources department and timely reminders from legal counsel can make all the difference in the world in ensuring compliance with such a strict wage theft prevention act.

Prior to issuing  its February 9 order, the district court dismissed the EEOC's Complaint, which asserted that 270 women had been sexually harassed by CRST.  By the time the EEOC's Complaint was dismissed, the court had disposed of the claims of all but 67 of the claimants on whose behalf the EEOC had brought suit.  In dismissing the EEOC's Complaint on behalf of the remaining 67 claimants, the court found that the EEOC "did not conduct any investigation of the specific allegations [of the 67 remaining claimants]...let alone issue a reasonable cause determination as to th[eir] allegations or conciliate them."  Specifically, the court found that with respect to the remaining claimants the EEOC failed to:  interview any of them or subpoena any documents to determine the veracity of their claims; make a reasonable cause determination as to their specific allegations; or attempt to conciliate any of their claims prior to filing the Complaint.  According to the court, the EEOC's failure to investigate the claims of the remaining claimants "deprived CRST of a meaningful opportunity to engage in conciliation and foreclosed any possibility that the parties might settle all or some of the dispute without the expense of a federal suit."

In awarding nearly $5 million in attorneys' fees and expenses to CRST, the court held that the substantial award to CRST was necessary to guarantee the observance by the EEOC of Title VII's procedures, particularly in the face of the EEOC's unreasonable conduct, which the court found imposed unnecessary burdens on CRST and the court.

This matter underscores the importance of formulating a sound litigation strategy, particularly as it relates to conciliation, during the EEOC's investigation of Title VII-related claims.  In the absence of such a strategy, an employer may miss a rare opportunity to recoup defense costs that are needlessly increased due to the agency’s failure to fulfill its statutory duties, and investigate the matter responsibly and fairly.  Conciliation should never be used or offered for any purpose other than to reach fair resolution of a case.  But an additional benefit of the conciliation position is that, if the EEOC declines to participate reciprocally, and in good faith, its position may expose the wholesale deficiencies of its litigation approach.  The result, as illustrated above, can be very satisfying to the employer.