Laws Against Employers Not Paying on Time

by Grace Ferguson; Updated September 26, 2017

The U.S. Department of Labor, Wage and Hour Division, oversees the Fair Labor Standards Act, which requires employers to pay employees accurately and promptly. Each state has a labor department; most establish minimum paydays, which require employers to pay employees by a certain time. The employer can face penalties for failing to pay wages or salaries on time.

Federal Law

The Fair Labor Standards Act, or FLSA, does not establish minimum paydays, but it requires employers to implement a regular payday, such as weekly, biweekly or semimonthly. The FLSA requires employers to pay employees within a reasonable time frame after the employee renders service, like by the established payday. Federal law also mandates employers to pay nonexempt employees at least the federal minimum hourly wage and overtime wages for work hours that exceed 40 for the week. If an employer fails to pay such wages promptly, the employee can file a wage claim with the U.S. Department of Labor, Wage and Hour Division, to recover unpaid wages. Federal penalties for purposely violating federal minimum wage and overtime pay requirements include a fine of up to $10,000 and criminal prosecution.

State Regulations

Most states require employers to pay employees weekly, biweekly, semimonthly or monthly; the time frame sometimes depends on the employee’s occupation or whether the employee is exempt or nonexempt. Many states have laws for when overtime wages are applicable as well. Employees who do not receive payment by the minimum payday required by state law can file a wage claim with their state labor department. The department can order the employer to pay the employee back wages and damages, if applicable. Some states require the employer to pay the employee a waiting time penalty for the number of days the employee was not paid, up to a certain time frame. The state can also fine and imprison the employer for violating the law.

Court Proceedings

If the employee chooses, she can file a private lawsuit to recover unpaid wages. She can file the suit herself in small claims court herself or hire an employment attorney. If the judge agrees with the employee’s claim, the judge can order her employer to pay her back wages, and applicable damages and attorney or court fees.

Pay Cycle Change

The employer is not in violation of the prompt payment law if he changes the employee’s pay schedule and the switch does not cause an unreasonable delay in payment; if the change is for valid business reasons such as a switch in accounting procedures; or if the change is meant to be permanent.

Considerations

The employee should file her wage claim within the time frame allowed under federal or state law. Statute of limitations vary by state, but many follow federal law, which gives an employee two years to file her claim and three years if the employer intentionally broke the law.

About the Author

Grace Ferguson has been writing professionally since 2009. With 10 years of experience in employee benefits and payroll administration, Ferguson has written extensively on topics relating to employment and finance. A research writer as well, she has been published in The Sage Encyclopedia and Mission Bell Media.