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Labor Groups Demand Easier Collection of Wage and Hour Awards

Every worker has a right to expect their employer will pay them fair wages for work in accordance not only with the employment contract or agreement, but, at bare minimum, in accordance with local, state and federal laws.

Unfortunately, this all too often does not happen. In these instances, when employers refuse to acknowledge the discrepancy, provide back-pay, correct error, or when they engage in retaliatory action as a result of reporting the violation, workers can and should seek remedy in the form of a wage-and-hour lawsuit.

However, when a judgment is secured, sometimes workers may have a tough time collecting. Now, a coalition of labor advocates and public interest legal groups are calling on state and federal lawmakers to make changes in state law that would pave the way for easier collection of stolen wages and other damages.

According to the New York Times, advocates report there are an estimated $125 million in outstanding orders and judgments that have yet to be paid to workers who won their wage-and-hour lawsuits.

So why has it historically been so tough? In some cases, employers are in deep financial trouble. The failure to pay workers was rooted in those struggles to begin with. (It doesn’t excuse the action, but it helps us to understand why it occurred.)

However, there are undoubtedly some cases in which the company owner has mastered the ability to shift property and hide funds.

One of those cited by the Times is a Long Island nail salon chain that was sued by six employees for years’ worth of wage theft violations. According to court records, workers were picked up by a van every morning at 8 a.m. and then carted to various salons throughout the area. Their work days usually stretched between 10 and 11 hours, but workers were typically paid a flat daily rate of between $20 and $60. Not only was this far below the state’s legal minimum wage, workers were not paid overtime, as required by law.

When the lawsuit was filed back in 2009, the owners of the chain reportedly had assets valued in the millions and at least $400,000 in cash in their bank accounts. Owners sold two multi-million dollar properties just weeks before trial.

Jurors ultimately found in favor of the workers, who were awarded nearly $475,000 for wage theft, retaliation (including termination) and other damages. However, only $11,000 of that has thus far been collected because the trial court judge prior to trial declined to attach properties or assets that could be needed to pay the judgment.

This is an important motion for which wage-and-hour attorneys should press prior to trial because otherwise, clients could end up in a similar situation.

In 2013, state lawmakers introduced a bill that would have addressed such “gamesmanship” on the part of employers to avoid paying these judgments. However, those efforts never made it beyond the committee phase. Soon, lawmakers intend to introduce a new version.

The new bill would allow workers to file something known as a “wage lien.” Essentially, it would alter civil court procedures in order to attach assets prior to the conclusion of a case if it’s determined the worker is more than likely going to win. Additionally, the new law would make the process of holding primary shareholders of corporations responsible for paying judgements of unpaid wages much easier.

Many worker advocates will be closely watching the progression of this latest effort.

The Law Offices of Ira S. Newman provides employment litigation representation in New York City, Long Island, Great Neck and throughout the area. Call 516-487-7375 or send us an e-mail.

Additional Resources:
Awarded Stolen Wages, Workers Struggle to Collect, Feb. 19, 2015, By Jim Dwyer, The New York Times
More Blog Entries:
FMLA in NYC: Workers, Employers Must Know the Law, Sept. 15, 2015, New York Wage and Hour Lawyer Blog