State and federal laws pertaining to wage and hour law are complicated. As a result, these are areas where mistakes are often made by employers. Employers, however, cannot afford these errors because the consequence of not complying with these laws can be very costly.
In Connecticut, this cost just increased. Effective today, October 1, 2015, “An Act Concerning an Employer’s Failure to Pay Wages” subjects employers to mandatory double damages for failure to pay wages, accrued fringe benefits, or an arbitration award, or failure to pay state minimum wage or overtime. In addition, a prevailing employee will be awarded attorney’s fees and costs of the litigation. Notably, this legislation overrules well-established Connecticut law, which entitled an employee to double damages and attorney’s fees only if the employee proved that the employer’s failure to pay wages was the result of “bad faith, arbitrariness, or unreasonableness.”
The good news is that, similar to federal law, employers may offer a “good faith” defense to avoid double damages. The new law does not define “good faith”; however, the Fair Labor Standards Act good faith defense will likely provide guidance as future litigation establishes the standard. This is unlike Massachusetts law, which imposes mandatory treble damages on an employer regardless of whether it made an honest mistake or took reasonable steps to comply with wage and hour laws.
Considering the consequences of violations, employers should regularly consult with their employment counsel to review their practices and policies to ensure compliance with state and federal wage and hour law.