Our Wage and Hour attorneys read the recent News & Observer series of articles by Mandy Locke with great interest. The investigation only confirmed what our lawyers have seen in our own cases: that the North Carolina Department of Labor and Cherie Berry are rarely successful in recovering wages, bonuses, and commissions owed to employees by their employers. Most disconcerting about Ms. Locke’s article is that it appears that in many cases, the DOL doesn’t even try to recover those funds owed to workers.
An important thing to note, however, is that Cherie Berry and the DOL’s failure – which certainly needs to be addressed – does not leave employees without remedies. The North Carolina Wage and Hour Act is actually extremely favorable to workers who are not paid the monies they are owed.
For example, the Wage and Hour Act assesses a penalty equal to double the amount of wages owed unless employers can show that the failure to pay was both reasonable and in good faith. For example, an employee owed $3,000 in unpaid commissions can recover up to $6,000 – comprised of the commissions plus an additional amount equal to the owed commissions in liquidated damages. Employees can also recover interest for the time period that the wages remained unpaid.
The Wage and Hour Act defines “employer” broadly such that individual owners, managers, and supervisors are all generally legally responsible for making sure their workers are paid (this becomes critical when, as Ms. Doyle noted, a responsible business claims to be insolvent but the owners of the business live in a million dollar house).
The Wage and Hour Act also allows law firms to recover their attorney’s fees. The ability to recover attorney fees by statute allows firms like ours to take these cases on a contingency basis, where we are only paid if we can track down assets and funds. While we generally cannot take a case where a single employee is only owed a few hundred dollars (we may be able to take groups of employees who are all owed a few hundred dollars), the ability to recover attorney fees decreases dramatically the amount of money that needs to be owed before we can help.
In most of our wage and hour cases over the past few years, the employee has netted, even after paying us our costs and attorney’s fees, the full amount of their wages owed and in many cases an even greater amount.
Federal laws are also pro-worker. The Fair Labor Standards Act ensures that minimum wage and overtime are paid appropriately. The Bankruptcy Code also protects workers from hollow threats of insolvency. Employees with wage claims have one of the highest levels of priority if a bankruptcy is filed. Under certain circumstances, an employee’s wage claim may even be removed from the bankruptcy process entirely such that all of the employer’s debts are eliminated but the ability for the employee to recover remains. This can, of course, lead to a much better chance of recovery from the employer.
Perhaps the recent increase in media coverage over the failures by the DOL and Cherie Berry can also be an education opportunity for workers. While Cherie Berry and her office may not be working to help employees, at least the legislature has not changed the laws which provide significant protection. North Carolina’s wage and hour laws have not been disrupted by the insurance industry’s quest for tort “reform.” There are lawyers who can take these cases and will not charge fees unless they are able to recover funds. Those same lawyers can often represent groups of individuals if one claim might be too small to pursue. While we hope the DOL improves their efforts in light of the N&O’s recent investigation, we also hope that employees in North Carolina learn their rights. After all, we can’t help if you don’t know that you have a case!