Employee Tip: FAQs of Workers With Unpaid Wages

The article below answers three common questions of workers who have unpaid wages.

Three FAQs of Wisconsin Workers With Unpaid Wages

#1 My employer (or former employer) owes me wages and refuses to pay. What are my options to get paid?

A worker has many options to pursue unpaid wages:

You could try to resolve your concerns informally with the employer.

Sometimes you can resolve wage concerns directly with your employer (or former employer), without the need for legal action. For example, you could send an email to a supervisor about your wage concerns, and that may well resolve your problem. If the employer is generally reasonable, then your concerns may get addressed, and informal resolution may prove your best option.

However, with some employers, informal measures do not prove helpful. For example, an employer may say it is receptive to employee grievances, and have an “investigation” procedure for workers’ concerns about wages and other issues. But workers may find that all such “investigations” are decided in favor of management, and that workers’ informal complaints get them nowhere.

If you feel making informal wage requests to your employer won’t do any good (or may subject you to retaliation, as discussed below), you could look into formal legal options.

You could file a wage complaint to the Wisconsin Equal Rights Division.

Workers seeking unpaid wages may file a labor standards complaint with the State of Wisconsin Equal Rights Division (ERD). More information about filing an ERD complaint can be found at the following website:

http://www.dwd.state.wi.us/er/labor_standards_bureau/how_to_file_a_labor_standards_complaint.htm

There are several advantages to filing an ERD complaint. First, it is fairly simple to complete the complaint and submit it to ERD. You do not need an attorney to deal with the ERD complaint process.

The ERD would investigate your complaint, and determine if wages are payable. If ERD decided wages were owed, it would ask the employer to make payment to you. Often, the employer will pay the wages as requested by ERD.

Filing an ERD complaint can be an effective way to get payment for unpaid wages, without too much time or expense.

Workers with small amounts of wages owed should especially consider filing an ERD complaint as a first course of action. For such workers, pursuing more extensive legal measures than an ERD complaint-namely, pursuing a complaint for unpaid wages in civil court-could wind up costing more than the value of their wages at issue.

However, if you have a significant amount of wages owed, or if you filed an ERD complaint but were unsuccessful in getting the wages paid, a civil complaint may be your best option.

You could file a complaint in civil court.

Filing a civil complaint, while more costly to pursue than an ERD complaint, could provide you with many advantages that the measures above could not. For example, a worker who wins a court decision could be awarded damages (payments) above and beyond the unpaid wages at issue. The worker could be awarded 50% to 100% of the wages amount in addition to the base unpaid wages. Further, the worker could be awarded attorneys fees and costs that were paid to pursue the civil complaint.

A civil complaint has several other advantages as compared to ERD: a civil court has enforcement powers that ERD does not, and in court a worker can raise many legal issues that ERD could not address. For example, a civil complainant could argue that an employer’s owner is personally liable for unpaid wages, and the court would consider that argument and make a determination on the issue. The ERD could not make binding decisions with regard to personal liability, or with regard to several other legal issues. A court can make decisions for all legal issues, and several decisions could considerably serve to a worker’s advantage.

A civil complaint presents the most significant potential advantages for an underpaid worker. However, whether filing a civil complaint is the best option depends on the circumstances, including the amount of wages at issue, and whether other measures have been used without success.

#2: I am worried about making a complaint to my employer or to legal authorities about unpaid wages because I fear my employer may fire me or otherwise retaliate against me. Is there a way I can make my wage concerns known and have these issues examined without retaliation?

State and federal wage laws protect most workers from retaliation, provided steps are taken to set up the protections.

Filing a legal complaint with ERD or in civil court would provide you with the most legal protection from retaliation by your employer. However, many workers choose not to take legal action, and instead contact their employers informally about the unpaid wages.

If you choose to raise the issue of unpaid wages with your employer, you may wish to do the following: (1) state your concerns in writing, via letter or email to all appropriate persons; (2) state your wish to resolve wage concerns amicably with the employer, without legal action; (3) state that if the parties cannot resolve the wage concerns informally, you may file a legal complaint with the ERD or in civil court if necessary; and (4) note that the law protects workers from retaliation for raising wage concerns.

These measures often prevent retaliation, as they ensure the employer is informed it would face legal risk (and financial risk) if it retaliated against the worker. However, the measures are not foolproof. On occasion, a given employer will be informed that the law prohibits retaliation against a worker, but will disregard the law and retaliate anyway.

With that said, if you are going to address your wage issues at all, you should do it right. A worker faces some risk of retaliation by raising any concerns about unpaid wages, even by merely mentioning the concerns to coworkers. Thus, if the concerns are to be raised at all, they should be documented in writing, and communicated in a manner that provides the most legal protection.

If retaliation is a big concern, it could benefit a worker to talk to an attorney to discuss his or her specific circumstances and options before taking action.

#3: My former employer admits that it owes me wages, but states it does not have the money to pay me. Is there anything I can do?

In many cases, yes. First, note that you should carefully examine an employer’s claims of financial hardship, and not accept such claims at face value. There are some employers whose statements about inability to pay are simply false, and who do have sufficient funds to pay their employees’ wages.

Further, even were an employer demonstrated to have severe financial problems – for example, if the employer at issue has filed for bankruptcy- that employer could still have a court judgment rendered against it for unpaid wages and penalties. Further, it is possible a lien could be placed on the employer’s assets, to facilitate payment of the worker’s unpaid wages. Notably, such a lien would take priority over the employer’s debts to many other types of creditors.

There are yet more possible ways to deal with a financially-strapped employer, particularly if the employer became financially-strapped due to intentional misconduct and/or mismanagement.

Under certain circumstances, a judgment of personal liability could be obtained against an employer’s high-level representatives, such as owners or executives. Seeking personal liability is a viable option where the representatives at issue were personally responsible for the failures to pay the wages, and the representatives have financial resources the employer entity may not have.

Employers and representatives who are responsible for unpaid wages should bear the brunt of the harms caused, not the unpaid workers. This is why the legal options above exist: to provide workers with means to pursue unpaid wages, and protect them from retaliation for doing so.