Feds nix double wage penalties for Pennsylvania employers

On Behalf of | Jul 9, 2020 | Employment Law -- Employer |

Under Pres. Barack Obama, the Federal Labor Standards Act (FLSA) doubled the penalties job providers paid when on the losing end of wage disputes. The recent economic chaos caused by Covid-19 has caused officials at the U.S. Dept. of Labor (DOL) to reconsider the additional penalty and do away with it. Federal employment law requires job providers to pay a minimum wage of at least $7.25 per hour with overtime paid when working more than eight hours in one workday or more than 40 hours in one work week.

The DOL implemented the double wage penalty for paying workers less than minimum wage and even more often for not paying overtime wages. If a qualifying worker filed a wage complaint and the DOL determined the complaint was valid, the job provider would pay double the amount owed to that worker. Many workers filed successful individual and class action complaints for underpayment based on federal employment law.

The idea behind the doubled penalty for underpayment of wages is to greatly encourage compliance among job providers across the nation. When wage violations and disputes occur, workers can seek full compensation via state and federal lawsuits for violations of respective state and federal wage laws. The double penalty made it doubly important for job providers to ensure full and fair earned wages were paid on time.

The announced change in federal employment law makes it easier for economically challenged businesses in and other job providers in Pittsburgh and elsewhere to emerge from the economic downturn inflicted by the Covid-19 global pandemic.

The federal bulletin announcing the change says it takes 28 percent longer to settle employment law wage claims with the additional penalty. Eliminating it means workers will get back wages paid sooner while employers can emerge from the economic downturn faster. Whenever faced with federal or state wage claims, an experienced employment law attorney and law firm helps to ensure fair outcomes for job providers as well as workers.