What should I do if an employee complains that I broke the minimum wage laws?

1. Don’t panic or get angry.

As an employer, you probably try to do right by your employees. It can feel like a slap in the face to receive a complaint about a possible wage and hour violation.

You are not alone. It is common for companies to run into wage and hour issues. Because wage and hour laws are written in such a broad and complicated way, strict compliance with the law is very difficult. It might cost some extra money, but mistakes can be fixed.

2. Don’t react impulsively.

Some employers react impulsively by firing the complaining person and/or their friends. Sometimes employers will try to “fix” the situation on their own by immediately paying additional wages to employees or asking them to sign “settlement” agreements. These kinds of actions can get you in far more trouble than the original complaint.

It is important that you properly assess the situation before you act. Once you analyze the problem and speak to a lawyer, you can properly resolve the issue.

3. Objectively assess the situation.

You need to study the minimum wage or overtime complaint carefully. What exactly is the issue? What brought on the complaint? What laws are in play? How much is your exposure? These are all questions you need to answer (with the help of your counsel).

4. Gather all relevant documents.

Begin assembling all of the documents that might be remotely related to the situation. Payroll records, timesheets, emails to/from the employee, employee handbooks, policies, etc.

5. Preserve all evidence.

Once you receive a complaint filed in a court (and probably the Department of Labor or Department of Commerce), you absolutely need to preserve all evidence and documents. Immediately stop any document destruction schedule that might affect relevant documents. If you destroy documents after you receive a complaint, you could put yourself in a very bad position later.

6. Call an experienced wage and hour lawyer immediately.

If you receive a complaint, time is of the essence. Any type of formal complaint (like a lawsuit or a DOL/DOC investigation notice) has likely triggered deadlines that you must meet. Waiting to call a lawyer may make it very difficult for you to find available counsel with the expertise you need.

Once you contact and retain an attorney, he or she can thoroughly assess your situation, let you know where you stand, and determine what steps you will need to take. As noted above, it is easy to run afoul of wage and hour laws. As a result, damages mitigation rather than damages avoidance may be your best option. In any case, an experienced minimum wage or overtime attorney can provide you with your options, evaluate your worst case and best case, and counsel you on probable outcomes.

7. Do not ignore the complaint.

Finally, whatever you do, do not ignore the complaint or brush it aside. What might seem like a small amount to one disgruntled employee can quickly spiral out of control. It is very common for lawyers representing employees to turn a single-person complaint into a class or collective action. Even if each person in the class is owed very little, the aggregate may be substantial (especially with the liquidated and extra damages available under wage and hour laws). Further, because employers who are found liable for a wage and hour violation must pay the other side’s attorney’s fees, a small claim on behalf of an employee can, if ignored, generate a large fee award (which can far exceed the employee’s claim).

Markovits, Stock & DeMarco

The experienced legal team at Markovits, Stock & DeMarco can assist you with any questions you may have.