A lawsuit for failure to pay wages in Indiana can be costly for an employer. Under the Indiana wage payment statute, employers who do not pay employees their full wages within ten business days of a request for the wages may ultimately be made to pay the employee twice the amount that was unpaid plus the costs of forcing the payment. The law allows employees to bring lawsuits to force the payment of unpaid wages.
The reasons for failure to pay can be many, but among the most important things for employers to do is properly count work hours and classify their employees correctly for overtime purposes. Errors in either of these actions can result in an employer paying the wages it believes are due but failing to pay wages that are actually due for overtime work, waiting or on call time, or other employee compensation arrangements. Under Indiana law, wages can even include fringe benefits for the purposes of an Indiana action for unpaid wages.
Employees Can File a Lawsuit for Failure to Pay Wages in Indiana
Although the law in Indiana was changed in 2015 to reduce the liability for employers when wages go unpaid, employees still have the right to file a lawsuit to recover the wages. Lawsuits like these usually involve a dispute about whether the wages were required rather than just a mistake on the part of the employer that can be easily rectified. Whether an employee was eligible for overtime pay is a good example of such disputes. Pay for time spent “donning and doffing” protective gear or uniforms is another example of disagreements between employers and employees.
Damages for Failure to Pay Wages in Indiana
Before July 1, 2015, employers that failed to pay wages in violation of law were automatically liable for as much as three times the amount of the unpaid wages. The law was changed in 2015 to require only the payment of the wages in question unless the employer is found to have acted in bad faith. Now, under Indiana Code § 22-2-5-2, in the case of bad faith, an employer is required to pay twice the disputed amount. Refusing to pay wages that are clearly owed would be the classic example of bad faith.
The Costs for Employers in a Lawsuit for Failure to Pay Wages in Indiana
It may seem that simply being made to pay what was due in the first place would not have much impact on an employer. The truth is, however, there is more than just the amount dispute at stake.
The Indiana wage payment statute requires that a court award reasonable attorney’s fees in lawsuits for wages when an employee must go to court to recover wages due. This is in addition to the cost of the employer’s own legal representation. These costs are often not inconsequential. In R.L. Turner Corp. v. Wressell, 44 N.E.3d 26 (Ind. Ct. App. 2015), the Indiana Court of Appeals affirmed an award of $99,870.00 in attorney’s fees for an employer’s failure to pay the wages due.
And unlike typical civil lawsuit fee arrangements, the award of attorney’s fees has no bearing on the amount of the unpaid wages. The award is separate from the payment of wages due, so the employee gets all the money to which she is entitled, and it does not cost her any more money to collect. In Turner, noted above, the amount of unpaid wages was $3,852.82.
Some may see a large award of attorney fees as unseemly in a case involving only a few thousand dollars, but the trial court in Turner addressed this issue. The court noted: “[i]f an attorney cannot earn a fee commensurate with the significant work it takes to vindicate what might be a modest right or a modest injustice––$3,800.00 of underpaid wages over two years––than [sic] modest injustices will continue.”
Do You Need Help With a Lawsuit for Failure to Pay Wages?
If you’re involved in a lawsuit for failure to pay wages in Indiana, contact Corey Meridew of the Indiana civil litigation firm of Camden & Meridew, P.C. Regardless of the amount in dispute, the stakes are high. With experience in the areas of tax law, family law, litigation, consumer law, criminal law, and bankruptcy, the lawyers at Camden & Meridew, P.C. are fully equipped to handle your wage payment dispute and more. For more information, or to speak with an attorney, call 317-770-0000 or complete our online contact form.
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