A Wage and Hour Law Update

It Pays To Be Up-to-Date
New State Wage and Hour Laws Will Cost Uninformed or Negligent Employers
By Gregory K. McGillivary, Woodley & McGillivary, Washington, D.C.

Editor-in-Chief of: Wage and Hour Laws: A State-by-State Survey, Second Edition

Are you up to date on the new wage and hour laws? If not, and if you are an employer, it could cost you. Conversely, if you are a union leader or other employee justice advocate, knowledge of these laws could help you ensure a fairer workplace. In just the past year, several different states across the nation have passed new laws that significantly expand employee rights. Employers that fail to stay informed of these new laws could face significant penalties for non-compliance.

State wage and hour laws are not pre-empted by the Federal Fair Labor Standards Act (FLSA).1 For example, many states have minimum wage laws that exceed the federal minimum wage.2 Most states also have wage payment laws that require employers to provide employees with timely payment of wages, including specific time frames for payment of the employee's last paycheck when they retire or otherwise leave employment.3 These laws are frequently changing.

For instance, if an out-of-state employee works in California for just one day, the employee is entitled to overtime pay under California law for that workweek. In a recent case, Sullivan v. Oracle, the Supreme Court of California decided that the state’s Labor Code applies to non-residents and residents alike if the employment decisions regarding the employees were made in California.4 In the case, a company based in California denied overtime wages to non-resident instructors who taught periodically in California.5  The California Supreme Court decided that whenever a person works in California, the employee is protected by Californian labor laws, regardless of his or her state of residence.6  Any in-state employer must stay current on California’s extensive wage and hour laws or run the risk of incurring monetary penalties.

In New York, a new law requires employers to notify employees about wage and hour laws or pay significant penalties. The Wage Theft Prevention Act (WPTA) includes a detailed list of information that employers must provide to employees.7 Additionally, the wage information must be provided to employees once a year.  If an employer fails to notify employees of their rights, the employees can sue for damages.8 The cost of noncompliance with the WPTA is $50.00 per week per employee until the employer comes into compliance with notice requirements.9 The WPTA caps damages at $2,500 for each employee.10 The bigger the company is, the bigger the losses the company could face for failing to stay informed about the latest New York Labor Laws.

In Maryland, a landmark labor law, the Maryland Flexible Leave Act (MFLA), expands when and how employees can use their sick, vacation, and personal leave.11 Now, if a spouse, a child, or even a parent gets sick an employee can use leave to take care of family.12 Also, the employee gets to choose the type of leave the employee will use to care for a family member.13 Furthermore, in Maryland if an employer underpays its employees, the court may grant treble damages.14 Thus, if a Maryland employer wrongfully withholds pay because an employee is out caring for family, the employer could have to pay up to triple damages for its mistake.

Although Congress has been inactive the past 12 years in terms of advancing new approaches to avoid wage theft and avoidance of overtime laws, the states increasingly have attempted to fill the gap. This trend is expected to continue as the states pick-up from federal inactivity in establishing basic labor rights.  A  report released on June 6, 2012, by the Progressive States Network, Where Theft is Legal: Mapping Wage Theft Laws in the 50 States, found that wage theft is a growing problem and that state wage and hour laws, in general, are increasingly inadequate ( as well as the federal law) in addressing the problem.  The report noted that lax enforcement of existing laws has been a problem, which some states combat by allowing private enforcement and increasing penalties, as New York state did with its Wage Theft law.

State wage and hour laws are constantly changing. Legislatures are enacting new laws to protect employees, and courts are deciding new rulings interpreting the laws on the books. Employers bear the burden of keeping current on its responsibilities to pay employees in compliance with both state and federal law.  As states increase penalties and private enforcement becomes more pervasive, it pays for businesses as well as unions and other employee advocates to keep up to date with these changes.

1 29 U.S.C. §218(a).
2 See www.dol.gov/whd/minwage/america.htm for a list of each state's current minimum wage.  Currently, 14 states have higher minimum wages than the federal minimum wage.  Nevada's is higher only if the employer fails to provide health insurance.
3 For a comprehensive listing and discussion of these laws see the ABA/Bloomberg BNA treatise McGillivary, ed., Wage and Hour Laws, A State-by-State Survey, (2d ed. 2011).
4 Sullivan v. Oracle Corp., 51 Cal. 4th 1191, 1197, 254 P.3d 237 (2011).
5 Id. at 1195.
6 Id. at 1206.
7 N.Y. Lab Law § 195.
8 Id. at (1)(a).
9 See N.Y. Lab Law § 198; see also Wage Theft Prevention Act Frequently Asked Questions (FAQ), http://www.labor.ny.gov/workerprotection/laborstandards/PDFs/wage-theft-prevention-act-faq.pdf.
10Id.
11 Md. Code Ann., Lab. & Empl. § 3-802(A)(4), (a)(5), (c), (d) (Supp. 2009).
12 Id. at § 3-802(a)(4).
13 Id. at § 3-802(d).
14 Md. Code Ann., Lab. & Empl. § 3-507.2(b).

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