The Federal Court of Claims recently held in U.S. v. Martin that federal employees have a right to be paid on time. The court ruling is widely applicable because it reaffirms what many courts have said: Pay employees on time, employers, or be subject to extra damages under the Fair Labor Standards Act (FLSA), even if the shortfall is paid later.
The Court held that the U.S. Government, during the 2013 government shutdown that lasted 14 days, violated the FLSA when it required some employees to work but paid them late, during the next pay period. The ruling reaffirms doctrine established by the Supreme Court decades ago that the FLSA requires employers to pay employees during the applicable pay period, on time (see Brooklyn Savings Bank v. O’Neil, 324 U.S. 697, 707; 1945).
The FLSA includes a “liquidated damages” rule that makes employers pay double wages to short-changed employees, if the employer acts without good faith. In U.S. v. Martin, the Court of claims held the government violated the FLSA by paying its employees late, even though in-full, during the next pay period. Therefore, the government might have to pay these federal workers “liquidated damages” equal to the minimum wage and overtime rates for the hours worked that were paid late.
The case continues because the government now has a chance to not pay the extra damages, if the government as “an employer can show that it acted in good faith and that it had a reasonable belief that it was complying with the FLSA.” (U.S. v. Martin, Slip Op. at 13; citing FLSA, 29 U.S.C. § 260). The Court held that salaried employees can seek minimum wage liquidated damages and those regularly paid overtime could seek overtime damages too (see id. at 3-4, 23).
For private-sector employers and governments, shorting employee wages because of money problems is rarely a good reason to escape FLSA liquidated damages. In West Virginia, a federal court required the same “on-time” payment requirement of a local sheriff and held that budgetary restraints forcing the sheriff to shift overtime pay was no excuse (Taylor v. County of Fluvanna, 70 F. Supp. 2d 655, 661-662; W.D. Va. 1999). In Maryland, federal courts also have enforced "on time" pay rights under the FLSA (Rogers v. Sav. First Mortg., LLC, 362 F. Supp. 2d 624, 631-632; D. Md. 2005).
The Fourth Circuit Court of Appeals, which oversees federal courts in Maryland, Virginia and the Carolinas, adopted the same rule decades ago (Roland Electrical Co. v. Black, 163 F.2d 417, 420-421; 4th Cir. Md. 1947). Regardless of the outcome of U.S. v. Martin, the case is significant because an employer shortchanging workers during a pay period — even briefly — violates the FLSA.
We at Lebau & Neuworth, LLC, bring unpaid wages claims to court regularly. If your employer has not paid you, or paid late with excuses, give us a call. You may be entitled to liquidated damages and attorney’s fees under the FLSA.
