Avoiding Costly Lawsuits: Timely Final Wage Payments in Connecticut

A few weeks ago, I came across a new class action lawsuit filed against a national delivery service. The case involves a simple issue: the company allegedly failed to pay an employee their final wages promptly after termination.

Allegations in the Lawsuit

The complaint states that the employer paid the employee by direct deposit three days after the employee was terminated. It seeks double damages not only for this employee, but also for any other employees in a similar situation.

Connecticut Law on Final Wage Payments

Connecticut law (Conn. Gen. Stat. § 31-71c) sets clear deadlines for when employers must provide final wage payments to employees.

1. Voluntary Termination (Resignation): When an employee chooses to resign, the employer must pay all wages owed by the next regular payday. Payment can be made using the usual method or sent by mail.
2. Involuntary Termination (Discharge): When an employer fires an employee, the employer must pay all of the employee’s wages no later than the next business day after the employee is discharged.
3. Layoffs or Suspensions Due to Labor Disputes: If an employee is laid off or has their work suspended because of a labor dispute, the employer must pay the employee all owed wages by the next regular payday.

Damages and Employee Rights

Conn. Gen. Stat. § 31-72 allows employees to sue their employers to recover unpaid wages. If an employer does not pay wages as required by §§ 31-71a to 31-71i, the employee can file a lawsuit to recover:

1. Double Damages: If an employer fails to pay wages, they must pay twice the amount owed, plus costs and reasonable attorney’s fees, unless they can prove they genuinely believed the underpayment was legal.
2. Single Damages: If the employer can show that they genuinely believed they were following the law when they underpaid the employee, the employee can recover the full amount of unpaid wages, plus costs and reasonable attorney’s fees.

What Should Employers Take Away?

Regardless of the merits of this specific lawsuit, this type of legal action can and should be avoided. Employers should always pay employees what they are owed when their employment ends. If you fire an employee, have their final paycheck ready at the time of termination or by the next business day. If an employee resigns, make sure they receive their final pay on the next regular business day.

Employers should remember that each state has its own laws. For example, in California, there are strict “waiting time” penalties if you do not pay all wages (including some commissions) immediately when an employee is terminated. If employers do not follow the correct procedures, they could face expensive lawsuits.