|Federal Statute||Fair Labor Standards Act, 29 U.S.C. §§ 201-219|
|Federal Regulations||29 C.F.R. §§ 500-899|
|D.C. Statutes||D.C. Code § 32-1001 et seq. (Minimum Wage and Overtime)|
|D.C. Code § 32-1301 et seq. (Wage Payment and Collection)|
|D.C. Regulations||7 DCMR §§ 900-999 (CDCR 7-900 et seq. in Lexis)|
|Maryland Statutes||Md. Code Ann., Labor & Empl. § 3-501 et seq. (Maryland Wage Payment and Collection Law)|
|Md. Code Ann., Labor & Empl. § 3-401 et seq. (Maryland Wage and Hour Law): Md. Code Ann., Labor & Empl. § 3-901 et seq. (Maryland Workplace Fraud Act)|
|Virginia Statutes||Va. Code Ann. § 40.1-28 et seq. (Virginia Minimum Wage Law)|
|Va. Code Ann. § 40.1-29 et seq. (Virginia Wage Payment Law)|
|Federal Government Employees||Fair Labor Standards Act|
|D.C. Government Employees||D.C. Code §§ 1-611.01 to 1-612.01|
|District Personnel Manual|
* For quick reference. See relevant sections for details on accrual, tolling, exceptions, and means of enforcement other than court actions.
|F.L.S.A.||2 years (3 years if willful) 29 U.S.C. § 255|
|D.C. Wage Payment and Collection||3 years|
|D.C. Minimum Wage Revision Act||3 years (D.C. Code § 32-1013), but tolled as long as employer does not provide Notice of Hire form (D.C. Code § 32-1008(c))|
|Davis Bacon Act||2 years (3 years for willful violations) 29 U.S.C. § 255 (no private cause of action)|
|Service Contract Act||6 years for Dep’t of Labor enforcement 28 U.S.C. § 2415; 29 C.F.R. § 4.187 (no private cause of action)|
|Walsh-Healy Public Contracts Act||2 years (3 for willful violations) 29 U.S.C. § 255|
|False Claims Act complaint alleging failure to pay prevailing wages on federal or D.C. government contracts||6 years after date of violation or 3 years after government knew or should have known of violation (whichever is later), but no action may be brought after 10 years (31 U.S.C. § 3731)|
|Virginia suits by workers against employers for breach of contract||3 years (for oral contracts) and 5 years (for written contracts) (Va. Code Ann. § 8.01-246)|
Enterprise Coverage or Individual Coverage Required
In order to be covered by the FLSA, an employee must work for a business or organization fitting into one of two categories. The employer, which must have at least two employees, must:
(1) have an annual gross volume of sales made, or business done, that is not less than $500,000 (“enterprise coverage”); OR (2) have employees engaged in commerce or in the production of goods for commerce, or employees handling, selling, or otherwise working on goods or materials that have been moved in or produced for commerce by persons (“individual coverage”).
See 29 U.S.C. § 203(s).
Although the limits of individual coverage continue to be refined and tested, courts generally distinguish between employees producing or transporting goods into the flow of interstate commerce and employees merely consuming goods used in interstate commerce. Compare, e.g., Foster v. Gold & Silver Private Club, Inc., No. 7:14CV00698 2015 U.S. Dist. LEXIS 165217, at *16, (W.D. Va. Dec. 9, 2015) (finding individual coverage where Virginia exotic dancers used Internet as a tool of interstate commerce to attract clientele), and Shomo v. Junior Corp., No. 7:11-cv-508, 2012 U.S. Dist. LEXIS 93275, at *11 (W.D. Va. July 6, 2012) (finding individual coverage where employee resold purchased goods, thereby becoming “another intermediary in the chain of commerce”) with Jimenez v. Southern Parking, Inc., No. 07-23156-CIV, 2008 U.S. Dist. LEXIS 70147, at *22-23 (S.D. Fla. Sept. 16, 2008) (finding no individual coverage where car washers only engaged in interstate commerce when using cleaning products made out of state); and Ergashov v. Global Dynamic Transp., LLC, No. JFM-15-1007, 2015 U.S. Dist. LEXIS 154874 at *9 (D. Md. Nov. 13, 2015) (finding no individual coverage where employee delivered donuts made in state exclusively to in-state consumers); see also Thorne v. All Restoration Servs., Inc., 448 F.3d 1264, 1266 (11th Cir. 2006) (“[A] customer who purchases an item from Home Depot is not engaged in [interstate] commerce even if Home Depot previously purchased it from out-of-state wholesalers.”).
Minimum Wage & Overtime
Under the Federal Fair Labor Standards Act (FLSA), the current federal minimum wage is $7.25 an hour, and employers are required to pay non-exempt employees overtime at a rate of time-and-a-half of an employee’s regular rate of pay for hours worked in excess of 40 per week. See 29 U.S.C. §§ 206(a)(1), 207(a)(1). Up-to-date information regarding the Fair Labor Standards Act can be found at http://www.dol.gov, a website of the U.S. Department of Labor (DOL).
Employee performance is irrelevant to the requirement that an employer pay minimum wage and overtime to a non-exempt employee. See, e.g. Skipper v. Superior Dairies, Inc., 512 F.2d 409, 419 (5th Cir. 1975).
Practice Tip: Because the FLSA establishes only minimum standards that must be followed, the worker may be able to benefit from additional protections provided under state laws. Thus, in any court case, the worker should allege violations of the FLSA and more expansive state laws, if such laws apply. See 29 C.F.R. § 541.4.
Exceptions to the Minimum Wage Requirement
Under the FLSA, tipped employees may be paid as little as $2.13 per hour for regular hours worked, though their tips received must make up the difference between the employer’s pay (the “minimum cash wage”) and the applicable minimum wage. If not, the employer must make up the difference itself. More detail on these concepts is below. Local laws also provide for a higher minimum cash wage in D.C. ($5.35), Maryland ($3.63), and Montgomery County ($4.00).
Tipped employees are those who “customarily and regularly” receive more than $30 per month in tips. Tips are the property of the employee. The employer is prohibited from using an employee’s tips for any reason other than as a credit against its minimum-wage obligation to the employee (“tip credit”) or in furtherance of a valid tip pool. Only tips actually received by the employee may be counted in determining whether the employee is a tipped employee and in applying the tip credit.
Tip Credit: Section 3(m) of the FLSA permits an employer to take a tip credit toward its minimum wage obligation for tipped employees equal to the difference between the required cash wage (which must be at least $2.13) and the federal minimum wage. Thus, the maximum tip credit that an employer can currently claim under the FLSA is $5.12 per hour (the minimum wage of $7.25 minus the minimum required cash wage of $2.13). The tip credit does not change for overtime hours. Thus, a tipped employee must be paid a cash wage of $7.25 X 1.5 = $10.88 – $5.12 = $5.76 for overtime hours. See 29 C.F.R. § 531.
|Tip Credit Cheat Sheet|
|Minimum Regular Wage||Minimum OT Wage||Maximum Tip Credit||Minimum Regular Cash Wage||Minimum OT Cash Wage*|
|* To calculate the minimum OT cash wage rate, subtract the Tip Credit amount from the Overtime Rate. Keep in mind that many tipped employees – and the establishments they work for – fall within certain federal and state law exemptions from coverage for overtime pay. For example, though the minimum overtime cash wage in Maryland may be, generally speaking, $9.88, many restaurant workers are exempt from Maryland state laws regarding overtime pay. Thus, the minimum overtime cash wage for a particular restaurant worker in Maryland may be $5.76 – the rate pursuant to the FLSA.|
|**Montgomery County and Prince George’s County have separate minimum wage provisions. In Montgomery County, as of July 1, 2022, the minimum wage is $15.65 for an employer with 51 or more employees, $14.50 for an employer with 11 to 50 employees, and $14.00 for an employer with 10 or less employees. The minimum overtime wage is therefore $23.48, $21.75, and $21.00 respectively. The minimum cash wage for tipped employees in Montgomery County is $4.00, and the minimum overtime cash wage for tipped employees is $11.83, $11.25, and $11.00 respectively. In Prince George’s County, as of October 1, 2017, the minimum wage is $11.50, or the minimum wage pursuant to the Maryland Wage and Hour Law or the FLSA, whichever is greater—making the current minimum wage $12.50 and the minimum overtime wage $18.75. The minimum cash wage for tipped employees in Prince George’s County is $3.63, and the minimum overtime cash wage for tipped employees is $9.88.|
Tip Pool: The requirement that an employee must retain all tips does not preclude a valid tip pooling or sharing arrangement among employees who customarily and regularly receive tips, such as waiters, waitresses, bellhops, counter personnel (who serve customers), bussers, and service bartenders. A valid tip pool may not include employees who do not customarily and regularly received tips, such as dishwashers, cooks, chefs, and janitors. Managers or supervisors may only keep tips that they receive from customers directly for services that the manager or supervisor directly and solely provides. Any employer that collects tips to facilitate a mandatory tip pool generally must fully redistribute the tips within the pay period.
Employer Requirements for Receiving the Tip Credit: The employer must provide the following information to a tipped employee before the employer may use the tip credit:
- the amount of cash wage the employer is paying a tipped employee, which must be at least $2.13 per hour;
- the additional amount claimed by the employer as a tip credit, which cannot exceed $5.12 per hour (the difference between the minimum required cash wage of $2.13 and the current minimum wage of $7.25);
- that the tip credit claimed by the employer cannot exceed the amount of tips actually received by the tipped employee;
- that all tips received by the tipped employee are to be retained by the employee except for a valid tip pooling arrangement limited to employees who customarily and regularly receive tips; and
- that the tip credit will not apply to any tipped employee unless the employee has been informed of these tip credit provisions.
Dual Jobs: It is somewhat common for tipped workers to also perform work that is non-tip-producing, a waiter cleaning or setting tables, for example. The Department of Labor prohibits employers from taking the tip credit for “substantial” time (more than 20 percent per week, or for a continuous period of more than 30 minutes) spent on non-tipped work. If such non-tip-producing work is not substantial, however, an employer may still take the tip credit for that work.
For more information on the tip regulations under the Fair Labor Standards Act, see https://www.dol.gov/agencies/whd/flsa/tips.
Sub-minimum Wage for Persons with Disabilities
FLSA allows employers to pay sub-minimum wages to workers whose disabilities impair their productive capacity for the work they perform, but this is a limited exception. See U.S. DOL WHD, Fact Sheet # 39, “The Employment of Workers with Disabilities at Special Minimum Wages,”
All rates must be approved by the Department of Labor and are subject to review by petitioning the Department of Labor. Petitions disputing the worker’s wage rate should be mailed to: Administrator, Wage and Hour Division, U.S. Department of Labor, Room S-3502, 200 Constitution Ave. NW, Washington, D.C. 20210. No particular form is required, but the petition must be signed by the worker or his/her parent or guardian, and must contain the employer’s address.
Unpaid Interns at For-Profit Employers
There are some narrow circumstances under which individuals who participate in “for-profit” private sector internships or training programs may do so without compensation. The Supreme Court has held that the term “suffer or permit to work” cannot be interpreted so as to make a person whose work serves only his or her own interest an employee of another who provides aid or instruction. See Walling v. Portland Terminal, 330 U.S. 148 (1947). This may apply to interns who receive training for their own educational benefit if the training meets certain criteria. The determination of whether an internship or training program meets this exclusion depends upon all of the facts and circumstances of each such program. The following six criteria must be applied when making this determination:
- The internship, even though it includes actual operation of the facilities of the employer, is similar to training that would be given in an educational environment;
- The internship experience is for the benefit of the intern;
- The intern does not displace regular employees, but works under close supervision of existing staff;
- The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
- The intern is not necessarily entitled to a job at the conclusion of the internship; and
- The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.
For more information, see U.S. DOL WHD, “Fact Sheet #71: Internship Programs Under The Fair Labor Standards Act,” http://www.dol.gov/whd/regs/compliance/whdfs71.pdf See also Glatt v. Fox Searchlight Pictures, Inc., 811 F.3d 528, 537 (2d Cir. 2015).
New Employees Younger than 20 Years Old
The minimum wage for employees younger than 20 years old for the first 90 days of employment is $4.25. See 29 U.S.C. § 206(g). For more information, see U.S. DOL WHD, “Fact Sheet #32: Youth Minimum Wage – Fair Labor Standards Act,” https://www.dol.gov/agencies/whd/fact-sheets/32-minimum-wage-youth.
Issues in Calculating Overtime
Determining the Workweek
The workweek is a fixed period of 168 hours (seven consecutive 24-hour periods) that can begin at any time and that regularly repeats. It need not coincide with the calendar week. See 29 CFR § 778.105. Once established, the starting point of an employee’s workweek can be changed only if the change is meant to be permanent and is not for the purpose of evading overtime wage laws. In the case of large plants, a workweek may be established for the entire plant rather than for individual workers. Workweeks stand alone for determining overtime hours and cannot be combined and averaged with other workweeks. See 29 CFR § 778.104. This means that a week of 30 hours cannot be combined with a week of 50 hours in order to have two weeks of 40 hours (and thus be overtime-free).
Figuring out when an employee’s workweek begins is important because it may determine whether, for example, seven consecutive days of work are part of the same or different workweeks. It is important to remain consistent with whatever starting point is established, so that each workweek is based on the same unit of time.
Flat or Fixed Rates for a Job
Employers and employees are allowed to agree on compensation in a flat or fixed amount for work done on a particular job or for a particular day or week of work. See 29 CFR § 778.112. In these scenarios, an employee’s regular hourly wage equals the total amount she receives divided by the total number of hours worked in the day, the week, or on the job. To the extent that the actual hours worked by the employee exceeded 40 in a given workweek, an employer must pay 1.5 times the regular hourly rate for the excess hours. The employee is considered to have already received his or her regular (non-overtime) wage from the fixed salary.
Note: Although employers and employees can agree upon this type of arrangement, they cannot negotiate a fixed salary that would result in an hourly wage below the legally-mandated minimum wage.
In trying to determine the regular rate for an employee with a flat or fixed salary for a pre-determined number of hours per week, see 29 C.F.R. § 778.113. The key is to determine “the number of hours which the salary is intended to compensate.” 29 C.F.R. § 778.113(a) (emphasis added). This section may apply whether the number of hours is greater or fewer than 40 per week. In either case, where the hours and salary remain fixed, the regular rate is determined by dividing the salary by the number of hours worked per week. All hours are considered to have been compensated for at the regular rate, so that only the overtime premium (i.e., the one half extra for each overtime hour) is due.
Example 1: If an employee receives $500 per week for 55 hours of work, the regular rate is $500/55 hours = $9.09. The overtime premium of $4.55 ($9.09 x 50%) is due for hours worked in excess of 40. Here, in addition to the weekly salary of $500, the employee is owed $68.18 (15 hours x $4.55) as an overtime premium. In this example, the employer intended that the employee would work 55 hours.
Example 2: If the employer and employee had an arrangement whereby the employee received a certain amount for 40 hours of work, and the employee worked more than 40 hours, the employee would be owed the overtime rate for all hours more than 40. The regular hourly rate would be calculated by dividing the salary into 40 hours, not the number of hours actually worked. In this example, the employer intended that the employee would work 40 hours.
Flat or Fixed Salaries for a Fluctuating Workweek
If an employer pays an employee a flat sum for a week, the employer is still liable for overtime for hours in excess of 40, but there may be a question as to how much overtime is owed. Ordinarily, an employee who works more than 40 hours per week will be entitled to overtime at a rate of one-and-a-half times the regular hourly rate for the hours more than 40. This is based on the presumption that the regular weekly pay is for 40 hours per week.
If the parties agree that the weekly rate is for all hours worked, regardless of how many, the employer may be able to pay the employee a flat sum per week, plus an additional amount for weeks in which the employee worked overtime. The additional overtime amount would be a ½ pay differential rather than time and a half. The regular hourly rate will vary from week to week depending on how many hours the employee actually works each week. For this reason, any hours worked over 40 have already been compensated as straight-time hours and the employer need only pay additional half-time pay to satisfy the FLSA.
The requirements that an employer must meet in order to use the fluctuating workweek method are set forth in 29 CFR § 778.114. If the requirements are met, the employer can simply pay the half-time differential on top of the fixed weekly pay. In the regulation, the requirements are as follows: (1) there must be a “clear mutual understanding” between the employer and employee that the fluctuating workweek method of pay is being used; (2) “the employee’s hours must fluctuate from week to week;” (3) the salary must be fixed even if hours change; (4) the salary must be enough such that the employee receives minimum wage; and (5) the employer must pay extra compensation (at a rate of half the hourly rate) for all overtime hours worked.
If the fluctuating workweek method applies, the hourly rate upon which overtime compensation is based will vary from week to week depending on how many hours were worked that week. If these requirements are not met by the employer, the employer may be liable to the employee for payment of overtime as if the employee had never paid any wages to the employee for those overtime hours. See Rainey v. Am. Forest and Paper Assn., Inc., 26 F.Supp.2d 82, 102 (D.D.C.1998) (employer liable at a rate of one-and-a-half times the hourly rate because there was no clear mutual understanding between the parties and because it did not pay overtime at the half-time rate).
Example: Assume (1) the employee is paid $750 per week regardless of the number of hours worked and (2) the fluctuating workweek method applies. In week 1, the employee works 50 hours, and, in week 2, the employee works 75 hours. The week 1 hourly rate is $750/50 hours = $15, and the week 2 hourly rate is $750/75 hours = $10. For week 1, the employee must be paid ½ time for the overtime premium, which is $7.50 X 10 hours, or $75. For week 2, the employee must be paid the overtime rate of $5 X 25 hours, or $125.
The key issue here is whether the employee was “engaged to wait” or “waited to be engaged.” Skidmore v. Swift, 323 U.S. 134, 137 (1944); 29 C.F.R. § 785.14. Whether waiting time is working time is a common-sense inquiry dependent upon the circumstances. See 29 C.F.R. § 785.14. Generally, if it benefits the employer to have the employee in a standby capacity, then the waiting time is compensable. See Armour & Co. v. Wantock, 323 U.S. 126, 133 (1944).
The DOL regulations provide guidance about whether waiting time is compensable, and it gives the following examples and explanation:
A stenographer who reads a book while waiting for dictation, a messenger who works a crossword puzzle while awaiting assignments, a fireman who plays checkers while waiting for alarms and a factory worker who talks to his fellow employees while waiting for machinery to be repaired are all working during their periods of inactivity. . . . [The wait time is work time because] the employee is unable to use the time effectively for his own purposes. It belongs to and is controlled by the employer. In all of these cases waiting is an integral part of the job. The employee is engaged to wait.
29 C.F.R. § 785.15 (emphasis added) (citations omitted). An employee is off-duty, that is, “waiting to be engaged,” only where s/he is “completely relieved from duty” and where the time period is “long enough to enable him to use the time effectively for his own purposes.” 29 C.F.R. § 785.16(a).
Break and Meal Time
Rest periods that are fewer than 20 minutes long constitute time worked under the regulations. See 29 C.F.R. § 785.18. Although meal periods of more than 30 minutes do not constitute work time, such periods might constitute work time if the employee is required to work during the meal period. Id. at § 785.19(a). There are, however, special rules for domestic workers that govern deductions from pay for meals and lodging. Id. at § 552.100.
Under FLSA, workers must be compensated for time spent in training programs, lectures, or meetings unless the following four criteria are met:
1) Attendance is outside the employee’s regular working hours;
2) Attendance is voluntary;
3) The training program, lecture, or meeting is not directly related to the employee’s job; and
4) The employee does not perform any productive work during the training program, lecture, or meeting.
See 29 C.F.R. § 785.27.
If the training program “corresponds to courses offered by independent bona fide institutions of learning,” the time spent participating in the training program is not compensable even if the training is directly related to the employee’s job as long as attendance is voluntary and the training is outside the employee’s regular working hours. See 29 C.F.R. § 785.31.
Training time is not compensable if the employee is working under a “bona fide apprenticeship program” and the training program does not include “performance of the apprentice’s regular duties.” See Wage and Hour Law: Compliance and Practice § 6:23. In Ballou v. General Electric Co., the First Circuit held that employees engaged in an apprenticeship program were not entitled to compensation for time spent attending academic and theoretical classes conducted off the company’s premises by independent educational institutions, even though the employees were required to attend these classes under their employment contracts. The apprenticeship program included direct job training on the employer’s premises, for which the employees were compensated, in addition to the academic and theoretical classes for which the employer paid the employees’ tuition fees but did not compensate the employees for time spent attending and preparing for classes. See 433 F.2d 109 (1st Cir. 1970).
There is a special rule for law enforcement officers and firefighters. Time spent in training programs is compensable unless the following criteria are met:
1) Attendance is outside regular working hours; and
2) The training is specialized or follow-up training; and
3) The training is required by a governmental organization.
See 29 C.F.R. § 553.226.
Exemptions from FLSA Overtime Requirement
One of the main purposes of the FLSA was to guarantee overtime for “blue collar” workers. Thus, the act exempts from its overtime coverage workers who are paid on a salary basis AND who have certain duties. See 29 C.F.R. § 541.3. These exemptions are generally referred to as the white collar exemptions.
White Collar Exemptions
Salary Basis Test: A worker who is paid a salary (not an hourly wage) and earns at least $684 per week or $35,568 per year may be exempt from receiving overtime pay pursuant to a white collar exemption. See 29 C.F.R. §§ 541.100 et seq. Regardless of job duties, any worker earning less than this amount is automatically eligible for overtime.
Duties Test: In addition to being paid on a salary basis, the worker must have duties that qualify as administrative, executive, or professional, or the employee must be a qualifying creative professional, computer professional, outside salesperson, or highly compensated employee. See 29 U.S.C. § 213(a)(1); 29 C.F.R. § 541.
Administrative Duties Test: The worker’s primary duties must be the performance of non-manual work directly related to the management or general business operations of his or her employer, and the worker must exercise discretion and independent judgment on matters of significance.
Executive Duties Test: The worker must have the authority to hire and fire employees, or at least to make regular and generally relied upon recommendations regarding hiring, firing, or employee advancement. The worker’s primary duties must be managing the employer’s business or a department of the employer’s business. Generally, the worker must supervise or direct the work of at least two or more subordinates. Equity owners of 20% or more are also considered executive employees.
Professional Duties Test: The worker must have engaged in a prolonged course of specialized instruction to work in his or her job, and the advanced instruction must be in a field of science or learning. The work must require the consistent exercise of discretion or judgment.
Creative Professionals: The worker’s primary duty must be the performance of work requiring invention, imagination, originality, or talent in a recognized artistic or creative field.
Computer Employees: Computer employees may be paid on an hourly basis and still be exempted from the FLSA, so long as they are paid at least $27.63 an hour. The exemption generally applies to computer systems analysts, computer programmers, software engineers, or other similarly skilled workers.
Outside Salespersons: The outside salesperson must be regularly performing sales work away from the employer’s place of business and must be primarily working making sales for which a customer or client will pay.
Highly Compensated Employees: Workers who perform office or non-manual work and are paid total annual compensation of $100,000 or more (which must include at least $455 per week paid on at least a salary or non-hourly basis) are exempt from the FLSA if they customarily and regularly perform at least one of the duties of an exempt executive, administrative, or professional employee, discussed above.
Note: The white collar exemptions do not apply to police officers, firefighters, paramedics, park rangers, hazardous materials workers and similar employees. In addition, no matter how highly paid these workers may be, they are entitled to overtime under the FLSA. See 29 C.F.R. 541.3(b).
Domestic Worker Exemption
Domestic workers who live in the household of their employers are exempt from the act’s overtime requirements. See 29 U.S.C. § 213(b)(21). However, these workers are protected by the minimum wage and record-keeping requirements. See 29 U.S.C. § 206(F); 29 C.F.R. §§ 516.2, 516.5, 516.27.
Home Care Workers
Under what is commonly known as the “companionship exemption,” home care workers who are employed to assist the elderly or infirm in their homes have been generally exempt from the minimum wage and overtime provisions of the FLSA. See 29 U.S.C. § 213(a)(15). However, in September 2013, the U.S. Department of Labor issued regulations that extend the protections of the FLSA to home care workers, clarifying and narrowing this exemption. After the Supreme Court declined to review an appeals court’s decision upholding the new regulations, the regulations went into effect on October 13, 2015. Home Care Ass’n of Am. v. Weil, 799 F.3d 1084 (D.C. Cir.), cert. denied, 579 U.S. 927 (2016).
Perhaps most significantly, the new regulations provide that third-party employers such as home care agencies and state intermediaries may not claim the exemption for home care workers they employ, regardless of the breakdown of duties. Put simply, all home care workers who are employed by a third party to provide services to elderly or disabled persons are entitled to federal minimum wage and overtime. See 29 C.F.R. § 552.109.
For workers not employed by third-party employers, the final regulations narrow the definition of “companionship services,” defining it as the provision of fellowship and protection. The regulations clarify that home care workers who spend more than 20% of their weekly work hours assisting an individual with “ADL”s (activities of daily living) and “IADL”s (instrumental activities of daily living) – including grooming, dressing, feeding, bathing, toileting, and transferring (ADLs); as well as meal preparation, driving, light housework, managing finances, and arranging medical care (IADLs) – are not exempt from minimum wage or overtime. 29 C.F.R. § 552.6. Workers who are exempt may not provide medically-related services, nor are they allowed to perform domestic services primarily for the benefit of other household members.
Workers Under a Collective Bargaining Agreement
If a collective bargaining agreement negotiated by a certified bargaining representative provides for certain minimum and/or maximum hours and certain rates of pay, employers cannot be found to have violated the FLSA. See 29 U.S.C. § 207(b). Practically speaking, the provisions of most collective bargaining agreements exceed the requirements of the FLSA with respect to wages and hours of work.
Employees of Recreational, Organized Camp, Religious, or Non-Profit Educational Centers
Workers employed in a recreational, organized camp, religious, or non-profit educational center may not be entitled to minimum wage or overtime if the facility operates for no more than seven months per year or if its revenue from one six-month period in the previous year is not more than one-third of its revenue during the other six months of that year. See 29 U.S.C. § 213(a)(3).
Employees of State and Local Governments
State and local government employees are generally covered under the FLSA, with the exception of elected officials, their staffs and advisors, and employees of state and local legislative bodies. See 29 C.F.R. § 553.3(a); see also, 29 C.F.R. § 553.11 & 553.12. For other exemptions for employees of public agencies, see 29 C.F.R. § 553.32.
Motor Carrier Act
The FLSA provides an overtime exemption at 29 U.S.C. § 213(b)(1) for employees “who are within the authority of the Secretary of Transportation to establish qualifications and maximum hours of service pursuant to [Section 204 of the Motor Carrier Act of 1935],” except those employees covered by the “small vehicle exception.”
The rules are somewhat complicated, but generally speaking, an employee who is a: (a) driver, (b) driver’s helper, (c) loader or (d) mechanic affecting the safety of operation of motor vehicles may be within this exemption if his or her duties involved motor vehicles that fit into one the following categories:
1) Vehicles that weigh 10,001 pounds or more; or
2) Vehicles that are designed or used to transport more than eight passengers, including the driver, for compensation; or
3) Vehicles that are designed or used to transport more than 15 passengers, including the driver, and not used to transport passengers for compensation; or
4) Vehicles that are used in transporting hazardous material.
For more information, see “Fact Sheet #19: The Motor Carrier Exemption under the Fair Labor Standards Act (FLSA),” http://www.dol.gov/whd/regs/compliance/whdfs19.pdf.
Other Exemptions from Minimum Wage and Overtime Requirements
The following is a list of other types of employees who are exempted from the FLSA’s minimum wage and overtime requirements:
- Certain workers in the fishing and seafood processing industries (29 U.S.C. § 213(a)(5))
- Certain agricultural workers (29 U.S.C. § 213(a)(6))
- Local delivery drivers paid by “trip rates” (29 C.F.R. § 551)
- Employees of small, local newspapers (29 U.S.C. § 213(a)(8))
- Seamen employed on vessels other than American vessels (29 U.S.C. § 213(12))
- Casual babysitters and domestic workers, caregivers, and companions for the aged and infirm (29 U.S.C. § 213(a)(15))
- State government employees may be paid with compensatory time instead of overtime in certain circumstances (29 U.S.C. § 207(o))
- Commissioned employees: Retail or service industry employees need not be paid the overtime rate if (1) the regular rate of pay of such an employee is in excess of 1.5 times the minimum wage; and (2) more than half the employee’s compensation for a representative period (of at least one month) represents commissions on goods or services (29 U.S.C. § 207(i))
For additional exemptions from overtime requirements only, see 29 U.S.C. § 213(b).
In general, exemptions from the FLSA are narrowly construed. The Act, as remedial social legislation, should be construed in favor of the workers it was designed to protect. See Arnold v. Kanowsky, Inc., 361 U.S. 388, 392 (1960).
It is an employer’s burden to show that a worker is exempt from the overtime provisions in FLSA. See Jones and Assoc., Inc. v. District of Columbia, 642 A.2d 130, 133 (D.C. 1994).
Losing the Exemption – Improper Deductions from Pay
As a general principle, exempt employees should always receive a predetermined amount of pay for each pay period, with no deductions for the quality or quantity of work performed. In addition, the employer should not make any full day or less than full day deductions from an exempt employee’s pay for employer-necessitated absences, jury, witness, or military duty (although taking an offset for any fees paid for service is allowed). Less than full day or full day deductions due to FMLA leave, however, are permissible. Full-day deductions can be made for full-day absences due to personal reasons, sickness, or disability, so long as the deductions are in conformity with other laws, and for days not worked during the first or last week of employment.
Improper deductions from an otherwise exempt employee’s pay can result in a loss of the exemption for the entire class of employees, not just that employee. The U.S. Department of Labor, however, issued regulations in 2004 allowing employers a safe harbor. The safe harbor provision is designed to protect employers who make one-time, inadvertent errors. In these cases, the exemption is lost only for employees in the same job class who work for the same manager who made the improper deduction. The safe harbor provision does not apply when there is a pattern and practice of improper deductions. To qualify for safe harbor, an employer must have a written policy against improper deductions, employees must be notified about the policy, and employees must be reimbursed for improper deductions. In addition, the regulations allow an employer to make disciplinary deductions for one day in response to safety violations of major significance.
Miscellaneous Liability Issues
Temporary or Contingent Workers – Joint Liability
When employees are working for an employer through a temporary agency, both the employer and the agency may be liable for violations of FLSA if the retaining employer is not acting independently from the staffing agency. See 29 C.F.R. § 791.2(a). For more on joint employers, see Joint Employer section, infra.
Individual owners, managers, directors, shareholders, or officers can be personally liable for violations of FLSA in certain circumstances. See Lambert v. Ackerley, 180 F.3d 997, 1012 (9th Cir. 1999) (“Where an individual exercises control over the nature and structure of the employment relationship, or economic control over the relationship, that individual is an employer within the meaning of the Act, and is subject to liability”); Zheng v. Liberty Apparel Co., 355 F.3d 61, 66-77 (2d Cir. 2003) (discussing two formulations of the economic reality test to determine whether one is an “employer” and thus liable under FLSA).
Wage Payment under FLSA
Technically, the FLSA does not have a wage payment component. Thus, although an employee may bring a claim under the FLSA for unpaid minimum or overtime wages, there is no cause of action available under the FLSA for workers who have simply not been paid their regular rate for hours worked (apart from a cause of action for the minimum wage portion of their regular rate). Generally, the failure to pay wages must be enforced under D.C. or state law. Some courts, however, have recognized a cause of action under FLSA for late payment of wages, called the prompt payment requirement. This cause of action has not been explicitly accepted or rejected in the District of Columbia or by the 4th Circuit. The leading case is Biggs v. Wilson, 1 F.3d 1537 (9th Cir. 1993). In Biggs, the 9th Circuit found the State of California liable for prejudgment interest and liquidated damages when it failed to pay some employees until two weeks after the regular payday (because no state budget had been passed appropriating the funds).
Penalties and Enforcement of FLSA
Liquidated Damages, Attorneys’ Fees & Criminal Sanctions
An employer who violates the act is liable to the employee for the unpaid wages and an additional equal amount as liquidated damages. See 29 U.S.C. § 216(b). The employer, however, may not be liable for liquidated damages if it demonstrates that its actions were in good faith and that it had reasonable grounds for believing its actions or omissions did not violate the law. Id. at § 260.
A prevailing plaintiff/worker in court must be awarded reasonable attorneys’ fees and costs to be paid by the defendant. See 29 U.S.C. § 216(b). A worker cannot, however, recover prejudgment interest. See Brooklyn Sav. Bank v. O’Neil, 324 U.S. 697, 715 (1945).
The FLSA also provides for both civil and criminal penalties. Civil penalties can amount to $1,000 per violation. See 29 U.S.C. § 216(e). Criminal penalties for willful violations can be up to six months in jail and up to a $10,000 fine. Id. at § 216(a).
Workers can pursue claims through the U.S. Department of Labor, see 29 U.S.C. § 216(c), or by proceeding directly to state or federal court, see 29 U.S.C. § 216(b). In certain cases, however, a worker’s right to sue ends if the Secretary of Labor brings an action in court on the worker’s behalf. See 29 U.S.C. § 216(b).
The Wage & Hour Division of the Department of Labor has offices at the following locations:
U.S. Department of Labor, Wage & Hour Division (District Office)
2 Hopkins Plaza, Room 601
Baltimore, MD 21201
U.S. Department of Labor, Wage & Hour Division (Area Office)
2300 Clarendon Blvd., Suite 503
Arlington, VA 22201
U.S. Department of Labor, Wage & Hour Division (Area Office)
6525 Belcrest Road, Suite 250
Hyattsville, MD 20782
In a suit by the Secretary, the Secretary can seek injunctive relief in addition to damages. See 29 U.S.C. § 217. Such a “hot goods” injunction could prohibit the employer from shipping goods across state lines if the goods were produced by workers who were not paid the appropriate minimum wage and/or overtime. See 29 U.S.C. § 215(a)(1); 29 U.S.C. § 216(b); 29 U.S.C. § 216(c).
Statute of Limitations
The statute of limitations for filing a lawsuit under FLSA is two years (three years for willful violations). See 29 U.S.C. §§ 255(a). Each workweek is treated separately for purposes of the statute of limitations. The standard for determining willfulness is whether “the employer either knew or showed reckless disregard for the matter of whether its conduct was prohibited by the statute.” McLaughlin v. Richland Shoe, 486 U.S. 128, 133 (1988). Courts have found willful violations of FLSA where the employer had notice of the law through earlier violations, but kept perpetrating the illegal scheme, see Dole v. Elliott Travel, 942 F.2d 962, 966-67 (6th Cir. 1991), and where, even after a DOL investigation confirmed the violations, the employer still continued the illegal practices, see Reich v. Monfort, 144 F.3d 1329, 1334-35 (10th Cir. 1998).
Equitable Tolling of the Statute of Limitations
Some plaintiffs have had success arguing that the two/three-year statute of limitations should be equitably tolled for any applicable limitations period because the employer failed to post the statutorily required notice of FLSA rights at the worksite. See Kamens v. Summit Stainless, Inc., 586 F.Supp. 324, 328 (E.D. Pa. 1984) (citing Bonham v. Dresser Indus., 569 F.2d 187, 193 (3d Cir. 1978)). Courts have generally declined to permit tolling per se if no notice was posted, and have instead adopted a context-based analysis that looks at evidence of a larger deception to avoid informing employees of their FLSA rights. See, e.g., Ayala v. Tito Contrs., Inc., 82 F. Supp. 3d 279, 291 (D.D.C. 2015) (“[T]he relevant question for tolling is the effect of the failure to post in the context of the entire exchange between employer and employee”); Patraker v. Council of Env’t of N.Y., No. 02 Civ. 7382 (LAK), 2003 WL 22336829, at *2 (S.D.N.Y. Oct. 14, 2003) (holding that once plaintiff has retained an attorney, failure to post notice becomes immaterial); Antenor v. D&S Farms, 39 F.Supp.2d 1372, 1379-80 (S.D. Fla. 1999).
Under FLSA, an employer may not “discharge or in any other manner discriminate against any worker because that worker has filed a complaint or instituted or caused to be instituted any proceeding…or has testified or is about to testify in any proceeding.” 29 U.S.C. § 215(a)(3). In order to succeed on a retaliation claim under this section, the plaintiff/worker must prove the following:
- The worker engaged in protected activity;
- The employer took an adverse action against him or her; and
- Causation (the employer took the adverse action because the worker engaged in protected activity).
See Conner v. Schnuck Markets, Inc., 121 F.3d 1390, 1394 (10th Cir. 1997); McKenzie v. Renberg’s Inc., 94 F.3d 1478 (10th Cir. 1996); Saffels v. Rice, 40 F.3d 1546 (8th Cir. 1994).
FLSA complaints made to the U.S. Department of Labor and filed as lawsuits in court are clearly protected activity; however, it is unclear whether informal complaints made to the worker’s employer constitute protected activity. State or District wage laws often have stronger anti-retaliation protections.
The U.S. Supreme Court has held that oral complaints constitute protected activity under FLSA. Kasten v. Saint-Gobain Performance Plastics Corp., 131 S. Ct. 1325, 1335 (2011). The Court in Kasten noted, and the Fourth Circuit later stressed, that even in cases of oral complaints, however, employers must still receive “fair notice as to when a complaint ha[s] been filed.” Minor v. Bostwick Labs, Inc., 669 F.3d 428, 432 (4th Cir. 2012); see also Randolph v. ADT Sec. Servs., 2011 U.S. Dist. LEXIS 87464 (D. Md. Aug. 8, 2011).
With regard to the element of causation, the worker must show that the protected activity was a substantial factor in the adverse action, meaning that “but for” the protected activity, the adverse action would not have occurred. See Conner v. Schnuck Mkts., Inc., 121 F.3d 1390, 1394 (10th Cir. 1994); Knickerbocker v. City of Stockton, 81 F.3d 907, 911 (9th Cir. 1996); Reich v. Davis, 50 F.3d 962 (11th Cir. 1995). It is an employer’s burden to negate or disprove the “but for” causation, that is, to show that it would have taken the adverse action regardless of the worker’s protected activity. See Conner, 121 F.3d at 1394; Knickerbocker, 81 F.3d at 911.
If an employer violates FLSA’s anti-retaliation provision, the plaintiff may recover “such legal or equitable relief as may be appropriate.” 29 U.S.C. § 216(a) (3). Courts are divided, however, as to whether this includes punitive damages. See Snapp v. Unlimited Concepts, Inc., 208 F.3d 928 (11th Cir. 2000) and Johnston v. Davis Sec., Inc., 217 F.Supp.2d 1224 (D. Utah 2002) (punitive damages not available under anti-retaliation provision) cf. Travis v. Gary Co. Mental Health Ctr., Inc., 921 F.2d 108, 111 (7th Cir. 1991) and Marrow v. Allstate Sec. & Investigative Services, Inc., 167 F.Supp.2d 838 (E.D. Pa. 2001) (punitive damages available for violation of anti-retaliation provision).
Retaliation Against Two or More Workers
In addition to those protections, when two or more workers complain about wages and are terminated or punished because of the complaint, it may be appropriate for the workers to file a charge under the National Labor Relations Act, which protects “concerted activity.” For more information, see the Manual’s chapter on Labor Unions and Labor Law.
Several federal courts have held that it is illegal under FLSA to report a worker to the Immigration and Naturalization Service (INS) as retaliation for a wage-hour complaint. See Zirintusa v. Whitaker, 2007 U.S. Dist. D.C. (Jan. 3, 2007) (No. 05-1738) at *15; Singh v. Jutla & C.C.&R’s Oil, Inc., 214 F. Supp. 2d 1056 (N.D. Cal. 2002); Contreras v. Corinthian Vigor Insurance Brokerage, Inc., 25 F. Supp. 2d 1053 (N.D. Cal. 1998). Under FLSA, undocumented workers may recover unpaid wages and liquidated damages for “work actually performed.”
Lucas v. Jerusalem Cafe, LLC, 721 F.3d 927, 937 (8th Cir. 2013). However, undocumented workers are ineligible for reinstatement and back pay for “for years of work not performed, for wages that could not lawfully have been earned.” Hoffman Plastic Compounds, Inc. v. NLRB, 535 U.S. 137, 149 (2002).
11th Amendment Immunity Issues
In the case of Alden v. Maine, 527 U.S. 706 (1999), the Supreme Court held that state employees may not sue the state for FLSA violations because states are immune from such suits under the 11th Amendment to the U.S. Constitution. Puerto Rico, a territory, enjoys similar immunity from FLSA suits. See Rodriguez v. Puerto Rico Federal Affairs Admin., 435 F.3d 378 (D.C. Cir. 2006).
This immunity might not apply to D.C. government workers for two reasons. First, D.C. is not a state but is a federal district created and overseen solely by Congress; therefore the language of the 11th Amendment does not apply. See U.S. Const. Art I, Sec 8. (2), which explicitly gave Congress the power to regulate D.C.’s affairs. Second, D.C. is more like a municipality than a state, and municipalities are liable under FLSA. See Monell v. Dept. of Social Servs., 436 U.S. 658 (1978) (holding a municipality can be sued under the Civil Rights Act of 1871 and is not entitled to absolute immunity). There is some case law supporting the assertion that the District of Columbia alone is a municipality. O’Callaghan v. D.C., 741 F. Supp. 273, 276 (D.D.C. 1990) (holding D.C. a municipality, not a state; applying Monell and citing Congress’ intent to subject D.C. to § 1983 liability by amending § 1983 to specifically include it); see also Morgan v. Dist. of Columbia, 824 F.2d 1049, 1056-58 (D.C. Cir. 1987) (allowing a § 1983 claim against D.C. because, as a municipality, it may be liable if “its official policy or custom is responsible for the deprivation of constitutional rights”).
On the other hand, the tri-state agency WMATA (Metro) has been held, by both the D.C. and the Fourth Circuits, to be a state agency and to enjoy sovereign immunity. See Lizzi v. Alexander, 255 F.3d 128, 132-34 (4th Cir. 2001) (holding WMATA did not waive 11th Amendment immunity except for certain tort and contract actions; concluding that hiring, training, and supervision are governmental functions, for which WMATA retains sovereign immunity); Morris v. WMATA, 781 F.2d 218, 220 (D.C. Cir. 1986) overruled on other grounds by Nev. Dep’t of Human Res. v. Hibbs, 538 U.S. 721 (2003) (recognizing WMATA’s sovereign immunity; holding it waived for certain tort and contract actions but not for “any torts occurring in the performance of a governmental function”).
Class Action Issues
Unfortunately, class actions under Federal Rule of Civil Procedure 23 are not allowed under FLSA. Each worker with a claim must opt in to what is called a “collective action.” See 29 U.S.C. § 216(b). However, counsel may wish to file a so-called “Hybrid Action,” with both class action state law claims and FLSA claims.
 DOL considers unpaid internships for public sector and non-profit charitable organizations generally permissible. See U.S. DOL WHD, “Fact Sheet #71: Internship Programs Under The Fair Labor Standards Act,” http://www.dol.gov/whd/regs/compliance/whdfs71.pdf.
 Attendance is not voluntary when attendance is required by the employer, or when the employee “is given to understand or led to believe that his present working conditions or the continuance of his employment would be adversely affected” by his failure to attend the training program, lecture, or meeting. 29 C.F.R. § 785.28.
 The training program is directly related to the employee’s job when “it is designed to make the employee handle his job more effectively.” The training program is not directly related to the employee’s job when the training is designed to train him for another job, or to develop a new or additional skill. The training program is not directly related to the employee’s job when the training program is designed to prepare the employee for “advancement through upgrading the employee to a higher skill, and is not intended to make the employee more efficient in his present job…even though the [training program] incidentally improves his skill in doing his regular work.” 29 C.F.R. § 785.29
 The apprenticeship program must be a “written agreement or program which fundamentally meets the standards of the Bureau of Apprenticeship and Training of the United States Department of Labor.” WHLCP § 6:23.
 The “duties” tests are laid out in 29 C.F.R. §§ 541.100(a), 541.200(a), and 541.300(a).
 In a lawsuit for the violation of the anti-retaliation provisions, a prevailing plaintiff/worker can recover any amount of damages deemed equitable by the court. See 29 U.S.C. § 215(a)(3); Avitia v. Metro. Club of Chi., Inc., 49 F.3d 1219 (7th Cir. 1995); Soto v. Adams Elevator Equip. Co., 941 F.2d 543 (7th Cir. 1991); Bogacki v. Buccaneers Ltd. Partnership, 370 F.Supp.2d 1201 (M.D. Fla. 2002).
 Although the FLSA does not preclude bringing an action in state court, an additional inquiry is whether the state court will have jurisdiction over the claim.
Practice Tip: The Wage Theft Prevention Amendment Act of 2013 dramatically changed how the prevailing wage laws may be enforced in D.C. The act broadened the definition of “wages” in the D.C. Wage Payment and Collection Law to include: “Other remuneration promised or owed…[p]ursuant to a contract between an employer and another person or entity; or [p]ursuant to District or federal law.” D.C. Code § 32-1301(3). The new law also amended the D.C. Wage Payment and Collection Law to state that “[i]n enforcing the provisions of this act, the remuneration promised by an employer to an employee shall be presumed to be at least the amount required by federal law, including federal law requiring the payment of prevailing wages, or by District law.” D.C. Code § 32-1305(b). These changes were intended by proponents of the bill to secure a private right of action – under the D.C. Wage Payment and Collection Law – for employees who have not been paid wages mandated by prevailing wage laws such as the Davis-Bacon Act. However, this application of the Wage Theft Prevention Act of 2013 has not yet been tested against federal preclusion defenses.
These laws set prevailing wage and fringe benefit rates in federal and D.C. government contracts. They apply to both prime contractors and subcontractors working on federal government or D.C. government contracts. These laws cover government contractors and do not apply to private commercial business not engaged in performing government contracts. They provide an important source for higher wages and benefits for workers in the District of Columbia. The prevailing wage is usually an average of all the wages paid for the same type of work in a geographic area. But for some trades or contracts, the prevailing wage and fringe benefits may be derived from union collective bargaining agreements.
As of January 1, 2022, the prevailing minimum wage is $11.25 for federal government contract workers and $7.40 for tipped federal government contract workers.
Davis-Bacon Act: Construction Contracts
The Davis-Bacon Act applies to contracts in excess of $2,000 for the construction, alteration, or repair of federal or D.C. public buildings or other public works. See 40 U.S.C. § 3142. This includes painting, renovation, and other work that involves discrete line items of construction work. The work must be performed on the site of the public work and by laborers or mechanics. The act covers both federal government contracts and federally assisted construction (i.e., state, local, or grantee construction financed in part by the federal government). Under the act, workers must be paid the prevailing wage and given prevailing fringe benefits. The Secretary of Labor is charged with setting prevailing wage levels. Id. at § 3142(b). Pursuant to that authority, the U.S. Department of Labor (DOL) has issued wage determinations covering the District of Columbia. These are schedules that set the prevailing wages and fringe benefits. Copies of those wage determination can be found at https://sam.gov/content/wage-determinations. These wage determinations, along with standard contract clauses, are supposed to be inserted into the prime contract and made applicable to subcontractors as well. Please see How to Find a Wage Rate.
Enforcement of the Davis-Bacon Act
There is no federal private right of action to enforce the Davis-Bacon Act. Historically, this meant that an employee could not sue to enforce the act and instead had to file a complaint with DOL (But see “Practice Tip: The Wage Theft Prevention Amendment Act of 2013,” above.) However, D.C.’s federal district court allows private actions under the DC Wage Payment Collection Law where the employee did not receive any wages at all for hours worked. See Ayala v. Tito Contrs., Inc., 82 F. Supp. 3d 279, 287 (D.D.C. 2015). Following the decision in Amaya et al. v. Power Design, Inc., 833 F.3d 440 (4th Cir. 2016) (permitting employees to pursue wages owed under FLSA when working on federal worksite and holding that the highest rate available is the legal rate owed), the District Court allowed employees to seek relief under the FLSA or D.C. wage payment statutes for wages owed at DBA rates. Garcia et al. v. Skanska USA Bulding, Inc. et al., (No. 17-629)(D.D.C. 2018).
The decisions indicate that this failure to pay is not the exclusive province of the Davis-Bacon Act, and is the sort that the D.C. Wage Payment and Collection Law was designed to protect. Courts in this area have not yet recognized a private right of action where the employer did pay a prevailing wage for hours worked, albeit the incorrect one under the DOL wage determinations. See, e.g., Johnson v. Prospect Waterproofing Co., 813 F. Supp. 2d 4, 7 (D.D.C. 2011). In those “misclassification” cases, workers should be instructed that their exclusive remedy remains a complaint with the DOL.
Complaints are filed at the same DOL offices that take FLSA complaints. The District Office of Wage and Hour usually cannot enforce the Davis-Bacon Act unless it relates to a city government contract. Otherwise, for purely federal contracts, enforcement rests exclusively with DOL. If a prime or subcontractor contractor is found to be paying insufficient wages under the act, the federal government may withhold monies from the prime contractor, sue to recover monies, institute debarment for aggravated or willful violations, or move to cancel (i.e., terminate for default) all or part of the contract and recover from the contractor the cost of completing the job with a different contractor. See 40 U.S.C. §§ 3143, 3144(a)(1). Under the Davis-Bacon Act, the statute of limitations is ostensibly two years for ordinary violations and three years for willful violations. See 29 U.S.C. § 255(a). However, DOL says that it has a contractual right of withholding and offset against any government contract even beyond the limitations period.
While there is generally no private right of action under the Davis-Bacon Act, there may be rights under the surety bonds that construction contractors are required to post as security for performance. Those bonds may also guarantee the payment of all wages due the workers. See the Miller Act discussion below. There are strict notice and time limits for such actions.
In addition, under the Davis-Bacon Act, contractors must pay employees weekly and must provide so-called “certified payrolls” to the government. These report wages, fringe benefits, deductions, rebates, and overtime paid to the workers. If the contractors submit false payroll, they may commit false claims or even criminal acts. Workers may be able to bring (in the name of the United States) qui tam actions to enforce the False Claims Act and collect a percentage of the treble damages and $10,000 per false invoice that constitute the damage remedy for the fraud. For further information, see the False Claims Act discussion below.
Practice Tip: Many times, employers place workers in the wrong prevailing class in order to pay a lower wage. For example, they will classify electrician helpers as laborers rather than electricians. Make sure that the worker is classified in the appropriate class based on the work performed.
Service Contract Act
The McNamara-O’Hara Service Contract Act (SCA), 41 U.S.C. §§ 6702-6707, 29 C.F.R. § 4, requires certain government service contractors to pay their employees the prevailing wage, including fringe benefits such as health and welfare sums, holidays, and vacation time. The act applies to contracts primarily for services “through the use of service employees” with the federal or D.C. government, in excess of $2,500, except for the following:
- contracts for the construction, alteration, and repair, including painting and decorating of public buildings or public works (See Davis-Bacon Act, above);
- contracts for supply of good or manufacturing governed by the Walsh-Healy Public Contract Act, see below;
- contracts for the carriage of freight where published tariff rates are in effect;
- contracts for services by radio, telephone, telegraph, or cable companies (See Communications Act of 1934, 47 U.S.C.S. §§ 151 et seq.);
- public utility contracts, including electric, power, water, steam, and gas;
- employment contracts for direct services to a Federal agency by an individual or individuals;
- contracts with the U.S. Postal Service for operation of postal contract stations (See 41 U.S.C. § 6702);
- prime or subcontractor contracts for certain enumerated commercial services where the work force spends less than 20% of its time performing services for the government;
- contracts for medical services related to Medicare or Medicaid;
- contracts for commercial services involving automatic data processing or other high-tech equipment where the work is done by the original equipment manufacturer or supplier;
- contracts involving disabled workers, apprentices, student learners, under government-approved programs;
- workers who are exempt as executive, administrative, or professional employees or computer employees as defined in Part 541 of the Code of Federal Regulations. [This is the most important exemption];
- certain National Park Service concessionaires who service the public; and
- certain prime contractor employees of government-owned and contractor-operated nuclear energy facilities.
This law applies to the District of Columbia government for “the contracts of all agencies and instrumentalities that procure contract services for or on behalf of the District or under the authority of the District government.” 29 C.F.R. § 4.108. Workers on these contracts must be paid the “prevailing wage” and given prevailing benefits. 41 U.S.C. § 6702. Prevailing wage determinations can be found at https://sam.gov/content/wage-determinations. Please see How to Find a Wage Rate. The SCA wage determination and contract clauses should be inserted into the prime contract and made applicable to all service subcontractors who are working on the contract.
The wage determinations under the Service Contract Act in D.C. range from a low of near the District’s minimum wage to more than $48 an hour for highly skilled registered nurse level IVs. The wage rates and health and welfare fringes change once a year, generally in June. The current health and welfare (H&W) benefits in the D.C. metropolitan area are $3.50; holiday benefits include 10 named holidays. Vacation benefits are based on length of service with the employer or the predecessor contractor and are at least two weeks. Part-time and temporary employees are covered by the act and entitled to pro rata fringe benefits. Wage determinations are updated from time to time, and the prevailing wage a worker is due may depend on whether the services were previously performed in the area under an SCA-covered contract, whether the worker has a collective bargaining agreement, and other factors.
The prevailing wage in the District of Columbia also includes fringe benefits at an amount of $4.48 per hour, as of July 11, 2018. See All Agency Memorandum No. 227, at http://www.dol.gov/whd/govcontracts/sca/sf98/aam227.pdf. Again, this changes annually. The wage determination also includes 10 holidays and vacation benefits according to length of employment (two weeks after one year; three weeks after five years; four weeks after 15 years). See e.g., Wage Determination No.: 2005-2103, Revision 12 (June 13, 2012). However, fringe benefits are not part of the base rate used to calculate overtime pay. There are two types of SCA wage determination. The even-number wage determinations allow for H&W benefits to be paid on average to workers for every hour worked, including overtime hours. Since this is an average calculation, some workers may get more benefits; other workers (like temporary or part-time employees) get little or no benefits. Most wage determinations, however, are based on individual fringe benefits and are odd numbered – they require each worker to be paid their H&W benefit for all hours paid (including holidays and vacations) up to 40 hours per week.
Enforcement of Service Contract Act
Like the Davis-Bacon Act, there is no private right of action under the Service Contract Act. The Secretary of Labor has the exclusive right to enforce the act. See United States v. Double Day Office Servs., 121 F.3d 531, 533 (9th Cir. 1997). Thus, employees must complain to DOL, which has the exclusive enforcement authority. When a violation of the act is established, the DOL may order the government agency to withhold the amount due from further payments from the contractor and pay it directly to the worker. See 41 U.S.C. § 6705; 29 C.F.R. § 4.187. Contractors found to have violated the act absent “unusual circumstances” are placed on a debarment list, which means they cannot get any federal or D.C. contracts for three years. See 41 U.S.C. § 6706; 29 C.F.R. § 4.188. If an employee thinks a violation has occurred, s/he should contact the agency overseeing the contract’s performance or the Wage and Hour Division of the United States Department of Labor at 1-866-487-9243. The statute of limitations for government actions has been interpreted to be six years. See 28 U.S.C. § 2415; 29 C.F.R. § 4.187. However, DOL general enforcement policy is to just go back two years absent willful or repeated violations.
Walsh-Healy Public Contracts Act
Davis-Bacon covers construction contracts; the Service Contract Act covers service contracts; and the Walsh-Healy Public Contracts Act (Walsh-Healy, WHPCA, or PCA), 41 U.S.C. § 6705-6706, covers supply contracts with the U.S. Government. The WHPCA originally established basic labor standards, such as wages, hours, and conditions, for work done on U.S. government and D.C. government contracts, in excess of $10,000 in value, for the manufacture or furnishing of materials, supplies, articles, and equipment. All workers engaged in the manufacturing or furnishing of contracted items are covered, except those in executive, administrative, or professional positions, or those performing office, custodial, or maintenance work. The act also is not applicable to contracts for the purchase of materials, supplies, articles, or equipment that can usually be bought in the open market. See 41 U.S.C. § 6505. Contractors subject to the Public Contracts Act originally had to certify that they satisfy the following conditions:
- pay prevailing wages (as determined by the Secretary of Labor);
- limit workweeks to 40 hours (unless specifically authorized by FLSA);
- do not employ any males under 16 or any females under 18;
- do not use convict labor unless they satisfy federal convict labor restrictions;
- do not maintain conditions that are unsanitary, hazardous, or dangerous to the health and safety of employees.
Enforcement of the Walsh-Healy Public Contracts Act
The WHPCA is now largely a dead letter. In 1962, the DOL stopped issuing new WHPCA wage determinations. All the WHPCA wage determinations were exceeded long ago by the minimum wage. So, all that has to be paid on U.S. government supply contracts is the FLSA and D.C. minimum wages. There is no fringe benefit requirement. The WHPCA does give the DOL some extra tools to assure compliance with the FLSA minimum wage, but not much more. There is no private right of action under the WHPCA. Only the Secretary of Labor is authorized to enforce its provisions. See 41 U.S.C. § 6507. The statute of limitations for enforcement actions under the WHPCA is two years for ordinary violations and three years for willful violations. See 29 U.S.C. § 255(a).
How to Find a Wage Rate and File a Complaint
To find out the prevailing wage for a particular job classification, generally called a wage determination, or to enforce a wage determination, contact the U.S. Department of Labor. The DOL now has a website where the most up-to-date wage determinations for the Davis-Bacon Act and the Service Contract Act can be found. Visit the Wage Determination Online site at https://sam.gov/content/wage-determinations. A library of resources is also available electronically at that website. The DOL website has descriptions of different job classifications, which also are available on the site.
To start an investigation, a D.C. worker may call the Baltimore District Office of the DOL or write a letter of complaint. To reach any DOL district office, call 1-866-4-USWAGE (1-866-487-9243). The Regional Administrator of the Wage and Hour Division can be contacted at the U.S. Department of Labor, Wage and Hour Division, 6525 Belcrest Road, Suite 250, Hyattsville, MD 20782. The Director of Wage Determinations can be reached at (301) 436-6767.
Miller Act: Construction Bonds
The Miller Act of 1935, 40 U.S.C. § 3131 et seq., requires that before any contract is awarded for the construction, alteration, or repair of any public building or public work of the United States (not the District of Columbia), the construction contractor must furnish a payment bond to protect wages of employees. See 40 U.S.C. § 3131(b)(2). The act applies to contracts over $100,000 awarded by the U.S. government only. Id. at § 3131(b); but see id. at § 3132(a) (stating that contractors with contracts greater than $25,000 but less than $100,000 may be allowed an alternative to payment bonds). Employees who are owed wages under the act must send a notice to the surety (an insurance company usually) generally within 90 days of stopping work and must file suit within one year of the violation in federal court. See 40 U.S.C. § 1332. These time limits are strictly construed. D.C. often requires its own performance bonds.
Contract Work Hours and Safety Standards Act
The Contract Work Hours and Safety Standards Act (40 U.S.C. § 3701 et seq.) applies to any laborers, mechanics, and night watchmen (i.e., guards), who work on federal government or D.C. contracts. It applies to both prime and subcontractors. It covers blue collar SCA-covered workers, and it covers federally assisted construction contracts, i.e., those financed in whole or in part by loans or grants from the United States. See 40 U.S.C. § 3701(b)(1). It also applies to contracts financed by federal loan guarantees, as long as the assistance of the federal agency extends beyond merely guaranteeing the loan. Id. Finally, it applies to any worker “performing services in connection with dredging or rock excavation in any river or harbor…of the District of Columbia.” 40 U.S.C. § 3701(b)(2)(A). The act only applies to contracts that are for more than $100,000. Id. at § 3701(b)(3)(iii).
While CWHSSA once had an eight-hour day overtime requirement, that was abolished in 1985 in the DoD Authorization Act of that year. Now, CWHSSA only requires time and one-half premium overtime be paid for all hours worked in excess of 40 hours per week. In this sense it requires no more than the FLSA or existing D.C. wage laws. The regular rate of pay calculation for the FLSA is the same calculation that is done for CWHSSA.
In addition to the health and safety rules in §§ 3704 and 3705, this act enforces the 40-hour week and overtime compensation, and allows liquidated damages of $10 per each workday that an employer violates those rules. The liquidated damages are payable to the U.S. government but not to the employee. See 40 U.S.C. § 3702. In addition, the agency authorizing and paying for the contracted work is authorized to withhold from its payment the full amount for which it believes the employer is liable. Id. at §§ 3702(d); 3703. The U.S. Comptroller General is authorized to pay the aggrieved worker directly. Id. at § 3703. The act provides for criminal penalties: up to $1,000 fine and 6 months’ imprisonment for willful violations of the safety requirement. Id. at § 3708. Willful wage and hour violations can lead to debarment.
Workers aggrieved under this act should file a complaint with the contracting agency or the U.S. DOL. See 40 U.S.C. § 3703(a). Generally there is no private right of action. The DOL and the contracting agencies are the exclusive enforcement mechanism. The statute’s wage and overtime requirements apply regardless of any less generous terms the employee or contractor agreed to or contracted for. Id. at § 3703(c); § 3702; see also National Electro-Coatings, Inc. v. Brock, 28 Wage & Hour Cas. (BNA) 1289 (1988), No. C86-2188, 1988 WL 125784 (N.D. Ohio July 13, 1988) (holding that the contract between the employer and the government need not contain provisions requiring payment for overtime in order to enforce the overtime provisions of CWHSSA). That case also held that the statute of limitations for CWHSSA is six years.
False Claims Act
Except in the limited circumstances noted above, there is generally no private right of enforcement under the various prevailing wage laws. The worker can ask for an investigation, future payments can be withheld from the contractor, and the contractor can be debarred from receiving government contracts in the future. Some courts, however, allow qui tam (i.e., whistleblower) actions under the False Claims Act.
The False Claims Act (FCA) prohibits contractors from making false claims for payment from the government and applies in cases where workers are not being paid the correct wages under the prevailing wage laws, the contractor is accepting payments from the government, and the contractor is falsely claiming that it is complying with these laws. In FCA cases, any person who knows about the fraud can sue the company on behalf of the United States. This person is called a qui tam relator and s/he can recover civil penalties, plus a percentage of what the government recovers from the contractor. See 31 U.S.C. § 3730. If the FCA action is for violation of a statute without a private right of action, however, the qui tam relator may not sue on his or her own behalf or recover damages for his or her own unpaid wages. See e.g. United States v. Double Day Office Servs., Inc., 121 F.3d 531 (9th Cir. 1997) (FCA/Service Contract claim OK); but see United States ex. rel Windsor v. DynCorp, Inc., 895 F. Supp 844 (E.D. Va. 1995) (misclassifying employees under the Davis-Bacon Act is exclusive province of Secretary of Labor, late filing of wage records is not a false claim).
Statute of Limitations
The qui tam complaint must be filed no more than six years after the date of the violation or no more than three years after the government knew or should have known of the violation, whichever is longer. The claim, however, can never be filed more than 10 years after the violation occurred. See 31 U.S.C. § 3731.
Qui tam complaints must be filed under seal with a copy of the complaint served on the Attorney General and the U.S. Attorney who has jurisdiction – not on the defendant. See 31 U.S.C. § 3730(b)(2). This allows the United States to determine whether it wants to prosecute the case. It is preferable to have the U.S. Department of Justice (DOJ) try the case, as it will incur all the expense of researching the case. The complaint must remain under seal for 60 days, but the United States may request extensions. Id. at § 3730(c). It is not uncommon for complaints to be kept under seal for as many as two years.
If the DOJ does not want to try the case, the qui tam relator may prosecute the case privately. If the relator wins the case, she will be given a larger percentage of the money recovered on behalf of the government than s/he would receive had the DOJ successfully prosecuted the case after she initiated it. See 31 U.S.C. § 3730(c) & (d).
Note: It is very important to include every claim in the original complaint, as qui tam claims must be plead with particularity, just like all other fraud claims. See Fed. R. Civ. P. 9(b).
If a worker suffers adverse employment actions because of contemplating or actually filing a qui tam claim, the worker is protected. See 31 U.S.C. § 3730 (h). The worker does not have to actually file a claim to be protected; even triggering an investigation or simply providing information to the government will entitle her to protection from retaliation. See Neal v. Honeywell, 33 F.3d 860 (7th Cir. 1994). If the worker prevails, she can receive double back pay with interest, reinstatement, special damages, and attorney’s fees. See 31 U.S.C. § 3730 (h). If a worker sues her employer for retaliation as authorized in subsection (h), the most closely analogous state statute of limitations applies instead of the six-year statute of limitations for other FCA actions. See Graham County Soil & Water Conservation Dist. v. United States, 545 U.S. 409 (2005).
Note: This is a very complex law and seeking specialized legal assistance is recommended. For more information, contact the National Whistleblower Center (www.whistleblowers.org), 4348 P Street NW, Washington, D.C. 20007, (202) 342-1902; or Taxpayers Against Fraud’s False Claims Act Legal Center. (www.taf.org) (202) 296-4826.
The D.C. wage and hour laws are generally more expansive than the FLSA and should always be consulted when representing a D.C. worker in a wage and hour case. 
The two main D.C. wage and hour laws are the D.C. Wage Payment and Collection Act, D. C. Code § 32-1301, et seq., which requires that wages be paid in a timely manner, and the D.C. Minimum Wage Revision Act, D.C. Code § 32-1001, et seq., which governs the payment of minimum wages and overtime. There are also Wage and Hour Rules within the D.C. Municipal Regulations. See 7 DCMRA § 900.1 et seq. The FLSA and the D.C. Minimum Wage Revision Act are to be interpreted similarly unless there are explicit differences. See Villar v. Flynn Architectural Finishes, Inc., 664 F. Supp. 2d 94, 96 (D.D.C. 2009). Thus, it is appropriate to use federal case law and the FLSA regulations at 29 C.F.R. §§ 510-794 to interpret the D.C. Minimum Wage Revision Act, noting the exceptions spelled out there and in the D.C. Wage and Hour Rules.
Minimum Wage & Overtime
Currently the minimum wage for private employers in D.C., as of July 1, 2022, is $16.10 per hour for all workers, regardless of the size of the employer. The base minimum wage for tipped employees is $5.35 per hour. However, if an employee’s hourly earnings with trips – based on a weekly average – do not equal D.C.’s full minimum wage, the employer must pay the difference. See D.C. Code § 32-1003(a). Pursuant to the Fair Shot Minimum Wage Amendment Act of 2016, the minimum wage in D.C. increases each successive year starting in 2021 in proportion to the average annual increase of the Consumer Price Index for the D.C. metro area, rounded to the nearest multiple of $.05.
|Start Date||End Date||D.C. Minimum Wage||D.C. Min. OT Rate|
|July 1, 2019||June 30, 2020||$14.00/hour||$21.00/hour|
|July 1, 2020||June 30, 2021||$15.00/hour||$22.50/hour|
|July 1, 2021||June 30, 2022||$15.20/hour||$22.80/hour|
|July 1, 2022||June 30, 2023||$16.10/hour||$24.15/hour|
|July 1, 2023||Indefinite||$(15 + CPI Increase)/hour||$(15+CPI) x 1.5/hour|
In 2006, the Living Wage Act became law in the District of Columbia. D.C. Code §§ 2-220.01 – 220.11. The Living Wage Act currently requires employers that receive government contracts or government assistance in excess of $100,000 (including subcontractors receiving $15,000 or more of the funds received by the contractor or $50,000 or more of the funds received by the recipient of government assistance) to pay workers a living wage of $16.10 per hour. On March 1 of each year, the D.C. Department of Employment Services will announce that year’s living wage. D.C. Code § 2-220.03. There are exceptions throughout the act and specifically at D.C. Code § 2-220.05.
As under the FLSA, non-exempt employees in D.C. are entitled to receive overtime at a rate of one and one-half times the employee’s regular rate of pay for hours worked in excess of 40 per week. See D.C. Code § 32-1003(c). The D.C. Municipal Regulations further provide that overtime under the act must be paid in the same manner as under the federal statute and regulations, see 29 C.F.R. 778, with some exceptions (i.e., the exception of Subpart A (General Considerations), Subpart E (Exceptions from the Regular Rate Principles), Subpart G (Miscellaneous), and Section 778.101 (Maximum Non-overtime Hours)). See 7 DCMR § 902.6.
Notice of Hire Form and Statute of Limitations
Under D.C. law, all employers in D.C. must provide employees with a “notice of hire” form detailing the name and contact information of the employer, the employee’s exempt/non-exempt status, rate of pay, the basis of the rate of pay, and any allowances taken from pay (i.e. tip credit). New employees must receive this form upon hire, and existing employees as of February 26, 2015 should have received the form by May 27, 2015.
If employees can show that they did not receive this form, the fact finder is permitted to count it against the employer’s credibility, and the statute of limitations is tolled for the time the employee did not receive the notice. D.C. Code. § 32-1008(c).
Record-keeping Following Hire
Employers must keep for three years wage records that include the full names, Social Security numbers, addresses, occupations, and dates of birth of each worker; regular hourly rates of pay; the total number of hours worked each day and each workweek by each worker; the time of day and day of week each workweek begins for each worker; the basis on which wages are paid; a daily record of hours, total straight time, and overtime earnings; their gross and net wages including deductions or additions to wages; dates of payment; and the pay periods covered by the payments. See D.C. Code § 32-1008 (a)(1); 7 DCMR § 911. These records must be made available to the mayor for inspection upon request. See D.C. Code § 32-1008 (a)(2). The Supreme Court held that evidence that the employer failed to adhere to these requirements may be evidence that defendants’ records are inadequate. Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 687 (1946)). D.C. Courts have similarly applied the Anderson Standard to D.C.’s wage and hour laws, holding that “[i]t is a long-standing principle in wage law that where an employer fails to produce records of the employee’s hours and wages, the employee can meet [their] burden of proof by ‘produc[ing] sufficient evidence to show the amount and extent of that work as a matter of just and reasonable inference.’” Serrano v. Chicken-Out Inc., 209 F. Supp. 3d 179, 187 (D.D.C. 2016) (quoting Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 687 (1946)).
In accordance with the Minimum Wage Amendment Act of 2013, employers of tipped workers are required to submit quarterly wage reports to the Department of Employment Services, certifying that all tipped employees were paid a minimum wage.
Itemized Statements Must be Provided to Employees
An employer must furnish to each worker at the time of payment an itemized statement showing the date of wage payment, gross wages paid (showing separately the earnings for overtime and non-overtime hours worked), an itemization of deductions and additions to wages, net wages paid, and hours worked during each pay period. See D.C. Code § 32-1008(b); 7 DCMR § 911.2.
Employers must also post a summary of wage and hour law in a “conspicuous and accessible place.” D.C. Code § 32-1009(a); 7 DCMR § 912. The Wage Theft Prevention Amendment Act of 2014 added significant new posting requirements, which are are available on the Office of Wage-Hour’s website.
Coverage and Definitions
Employer: The term “employer” is broadly defined in the act. For example, it includes individuals as employers. In some cases, individual owners, managers, officers, or directors may be liable as employers even though there is also a corporate entity that is also liable. It does not include, however, the D.C. or federal governments. See D.C. Code § 32-1002(3).
Under amendments effective February 26, 2015, a general contractor can be held liable for the D.C. wage violations of a subcontractor. Neither “general contractor” nor “subcontractor” are defined by the statute or regulations. Id. The general contractor can escape liability by showing that it promptly paid the subcontractor under the terms of their contract. D.C. Code § 32-1012(c).
Practice Tip: Whenever possible, name individuals as defendants in addition to the corporate entity. Establishing the liability of both the entity and individuals increases the chances of collecting on a judgment and also increases the pressure on the defendants to settle the case.
D.C.-based employee: A person is considered to be employed in the District of Columbia if that worker (a) regularly spends more than 50% of his or her working time in D.C.; or (b) is based in D.C. and regularly spends a substantial amount of his or her working time in D.C. and not more than 50% of his or her working time in another state. See D.C. Code § 32-1003(b).
Working time: The term “working time” is defined to include all of the time the employee: “(A) is required to be on the employer’s premises, on duty, or at a prescribed place: (B) Is permitted to work; (C) Is required to travel in connection with the business of the employer; or (D) Waits on the employer’s premises for work.” D.C. Code § 32-1002(10). Examples of what constitutes working time can be found at 29 C.F.R. § 785.
Regular rate: The term “regular rate” is defined to include all remuneration to the employee except for the items set forth in 29 U.S.C. §§ 207 (e)(1)-(7). Extra compensation described in 29 U.S.C. §§ 207 (e)(5)-(7) is creditable toward overtime compensation. See D.C. Code § 32-1002 (7). Reviewing the FLSA regulations is necessary when calculating the regular rate of pay for a worker who is paid a flat sum per week or other period; for workers who receive commissions; or for other special circumstances. See 29 C.F.R. §§ 778.0-778.603 – Overtime Regulations.
Specific Minimum Wage Issues
Minimum Wage – Exemptions from Coverage
The act exempts the following categories of workers from the minimum wage provisions:
- Federal and D.C. government employees (D.C. Code § 32-1002(3))
- Executive, administrative, and professional employees (as defined by the Fair Labor Standards Act) (D.C. Code § 32-1004 (a)(1)).
- Volunteers at educational, charitable, religious, or non-profit organizations (D.C. Code § 32-1002 (2)(A))
- Lay members “elected or appointed to office within the discipline of any religious organization and engaged in religious functions” (D.C. Code § 32-1002 (2)(B))
- Casual baby-sitters, meaning those who do so on an intermittent basis and whose vocation is not babysitting (D.C. Code § 32-1002 (2)(C))
- Outside salespersons, meaning (1) an employee who works regularly away from the employer’s place of business selling or obtaining contracts; and (2) “hours of work not related to his or her outside sales do not exceed 20 percent of the hours worked in the workweek by nonexempt employees of the employer” (7 DCMR §§ 902.3, 999.2)
- Home newspaper deliverypersons (D.C. Code § 32-1004 (a)(2))
The minimum wage provision does not apply in instances where other laws or regulations establish minimum rates for the following:
- Disabled employees not covered by FLSA because the employer has a valid certificate issued by the U.S. Department of Labor authorizing payment less than the minimum wage (D.C. Code § 32-1003 (d))
- Job Training Partnership Act participants (7 DCMR § 902.4 (b))
- Individuals employed under the Older Americans Act of 1965, 42 U.S.C. § 3001 et seq. (7 DCMR § 902.4 (c))
- Individuals employed under the Youth Employment Services Initiative Amendment Act (7 DCMR § 902.4 (d))
- Adult learners, who are defined as “newly hired persons 18 years of age or older,” and who can be paid the federal minimum wage for a period not to exceed 90 days (7 DCMR § 902.4 (e))
- Students employed at higher education institutions (e.g., college, university, junior college, or professional school) may be paid the federal minimum wage (7 DCMR §§ 902.4, 999.2)
- Minors (younger than 18) may be paid the federal minimum wage (7 DCMR § 902.4)
- Security Officers working in an office building in the District of Columbia (D.C. Code § 32–1003(h))
Minimum Daily Wage
In D.C., there is also a minimum daily wage. A worker must be paid for at least four hours on each day she reports to work, unless the worker is regularly scheduled for fewer than four hours. The payment is the regular rate for hours worked plus the minimum wage for the hours not worked. See 7 DCMR § 907.1.
In addition to the wages required by the wage and hour rules, the employer must pay one additional hour of wages at the minimum wage for each day that a split shift is worked. 7 DCMR § 906.1. A “split shift” is a schedule of daily hours where the hours are not consecutive and the total time out for meals exceeds one hour. 7 DCMR § 999.2. This rule, however, is not applicable to an employee living on the employer’s premises. 7 DCMR § 906.1.
Employer Deductions and/or Charges
Housing & Meals
In limited circumstances, the employer may pay part of a worker’s wages in something other than money. Housing costs may be deducted from a paycheck at no more than 80% of the rental value of the housing provided, as determined by “a comparison with the value of similar accommodations in the vicinity of those furnished.” 7 DCMR § 904.1.
Practice Tip: A good way to check the value of a particular apartment is to check the rent control files at the D.C. Consumer and Regulatory Agency, Rental Accommodations and Conversion Division. You can request the file for an entire apartment building and check the rent ceiling and actual rent charged for all apartments in the building, then take an average to determine the rental value.
Allowances for meals may be deducted at not more than $2.12 per meal. 7 DCMR § 904.2. If an employee works fewer than four hours, only one meal allowance may be deducted; if the employee works more than four hours, only two meal allowances may be deducted. Id. Allowances may not exceed $6.36 per day for an employee who lives at his or her place of employment. Id.
Employers are required to maintain records of these allowances and must furnish workers with an itemized statement showing all deductions or additions. See 7 DCMR § 911.1 (j) & § 911.2.
For Certain Deductions – No Deductions that Reduce Wages Below Minimum Wage
An employer may not deduct or require the employee to pay the employer for “breakages, walkouts, mistakes on customer checks and similar charges, or to pay fines, assessments or charges” if such deductions reduce wages below the minimum wage. See 7 DCMR § 915.
Employers Must Pay Extra if Employees Buy or Care for Uniforms
It is the employer’s responsibility to provide, maintain and clean any required uniforms or protective clothing. However, in lieu of purchasing, maintaining, and cleaning uniforms, the employer may pay the worker an additional 15 cents per hour beyond the prevailing minimum wage, up to $6 a week. 7 DCMR § 908.1. If the employer purchases but the employee maintains and cleans the uniform, the employer must pay an additional 10 cents per hour. 7 DCMR § 908.2. If the employee purchases and the employer cleans and maintains the uniform, the employer must pay an additional 8 cents per hour. 7 DCMR § 908.3. This payment only applies to uniforms that are plain and washable and does not apply to protective clothing.
Employer is Responsible for Travel, Tools, and Other Work-Related Expenses
Employers are responsible for travel expenses and the purchase or maintenance of any tools required “in performance of the business of the employer.” 7 DCMR § 909.1.
Workers Who Receive Tips
The minimum wage required to be paid by any employer in the District of Columbia to any employee who receives gratuities shall be $ 5.35 an hour, provided that the employee actually receives gratuities in an amount at least equal to the difference between the hourly wage paid and the D.C. minimum wage ( $16.10 as of July 1, 2022). D.C. Code § 32-1003(a)(5)(A); D.C. Code § 32-1003(f) . The employee must be informed about these provisions and all tips must have been retained by the employee (although pooling by employees who receive tips is allowed). See D.C. Code § 32-1003(g). The employer has the burden to prove the employee received at least as much tips as the amount of the allowance taken. 7 DCMR § 903.1.
Break and Meal Time
The District of Columbia does not require that employers provide employees with break and meal times. These are scheduled at the discretion of the employer. If an employer provides break and meal times, the FLSA applies for purposes of determining time worked. See supra.
Specific Overtime Issues
Overtime – Exemptions from Coverage
In addition to those employees exempt from the minimum wage provisions listed above, the act also exempts the following categories of workers from the overtime provisions:
- Seamen (D.C. Code § 32-1004 (b)(1))
- Railroad employees (D.C. Code § 32-1004 (b)(2))
- Automobile dealership employees and mechanics – salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles, trailers, trucks, if employed by a non-manufacturing establishment primarily engaged in the business of selling these vehicles to ultimate purchasers (D.C. Code § 32-1004 (b)(3))
- Airline employees who voluntarily exchange workdays to use air travel benefits (D.C. Code § 32-1004 (b)(6))
- Commissioned Employees (D.C. Code § 32-1002(e)
- Domestic workers who live on the premises of their employer (7 DCMR § 902.5 (a))
- Companions for the aged or infirm (7 DCMR § 902.5 (b))
An employer may wrongly assume that paying a worker who does not fit into one or more of the above exemptions a weekly or monthly salary exempts the employer from overtime liability, but this is not the case. Even if a worker is salaried, the employee may still be entitled to overtime pay. To determine the amount of overtime that may be owed, the worker’s regular rate can be calculated by dividing the worker’s weekly salary by the number of hours the salary was intended to compensate per week. 29 C.F.R. § 778.113. To determine the regular rate for workers with fixed salaries who work fluctuating numbers of hours per week, see 29 C.F.R. § 778.114.
Commissioned Workers in Retail or Service Jobs
Overtime is not required for retail or service employees if the regular rate of pay exceeds 1½ times the minimum wage and more than ½ of the employee’s compensation for a representative period (at least one month) represents commissions on goods or services. See D.C. Code § 32-1003(e); 7 DCMR § 905.
All D.C. private employers are prohibited from requiring, as a condition of
employment, that an employee refrain from inquiring about, disclosing, comparing, or otherwise discussing the employee’s wages or the wages of another employee. Employers are barred from discharging, disciplining, interfering with, or otherwise retaliating against an employee who inquires, discloses, compares, or otherwise discusses their wages or the wages of another employee. D.C. Code § 32-1452. Certain employees with regular access to wage information, e.g. human resources employees, can be restricted from sharing wage information, unless disclosure is in relation to an investigation, action, hearing, or other legal obligation. Id. at § 32-1453. Failure to comply can result in civil fines, however affected employees do not have a private right of action. Id. at § 32-1455.
D.C. Wage Payment and Collection Law
The D.C. Wage Payment and Collection Law was passed in 1956, and is codified at D.C. Code §§ 32-1301 through 32-1310. The law requires employers to pay wages within certain time limits and provides remedies for violations.
Definitions & Coverage
The law applies to all employers “employing any person in the District of Columbia.” D.C. Code § 32-1301(1B). It does not specifically address workers who work in more than one jurisdiction, but like all remedial legislation, it should be liberally interpreted to find the broadest possible coverage.
Employer: The term “employer” is broadly defined in the law. See D.C. Code § 32-1301 (1). Of particular importance, the term explicitly includes individuals as employers. In some cases, individual officers or owners may be liable as employers even though there is also a corporate entity that is liable. For a discussion of individual liability, see “Wage and Hour Related Issues” at the end of this chapter.
Employee: The law broadly defines “employee” to include “any person suffered or permitted to work by an employer.” D.C. Code § 32-1301(2).
Wages: The Wage Theft Prevention Amendment Act of 2013 substantially broadened the act’s definition of wages by explicitly including a number of types of compensation. “Wages” means all monetary compensation after lawful deductions, owed by an employer, whether the amount owed is determined on a time, task, piece, commission, or other basis of calculation. D.C. Code §13-1301(3). The definition of “wages” now explicitly includes:
(C) Fringe benefits paid in cash;
(D) Overtime premium; and
(E) Other remuneration promised or owed:
(i) Pursuant to a contract for employment, whether written or oral;
(ii) Pursuant to a contract between an employer and another person or entity; or
(iii) Pursuant to District or federal law.
Working day: The Act states that working days are any days other than Saturdays, Sundays or legal holidays. D.C. Code § 1301 (5). Keep this in mind when determining what day wages are due to the employee.
Employees Exempt from Coverage
The following types of workers are not covered under the Wage Payment and Collection law:
- U.S. government or agency workers (D.C. Code § 32-1301(1B))
- D.C. government or agency workers (D.C. Code § 32-1301(1B))
- Workers subject to the Railway Labor Act (D.C. Code § 32-1301(1B))
Wage Payment and Collection Rules
Wages for Non-Exempt Workers Must Be Paid At Least Twice a Month
Wages for non-exempt workers must be paid at least twice each calendar month on regular paydays designated in advance by the employer. See D.C. Code § 32-1302. Wages must be paid with “lawful money of the United States, or checks on banks payable on demand.” Id.
Wages Must be Paid Within 10 Working Days of the Close of the Pay Period
There cannot be more than 10 “working days” between the close of a pay period and the payment of wages from that pay period. See D.C. Code § 32-1302. There are two exceptions to this requirement: (1) when a different period is specified in a collective bargaining agreement between an employer and a bona fide labor organization; or (2) when the employer, by contract or custom, paid wages at least once each calendar month prior to the law’s 1956 enactment and has continued to do so since that time. Id.
Pay Stub Requirement
Every time wages are paid, employers must provide workers itemized statements of hours worked; gross and net pay, with the portions of wages from overtime hours or commission specified; and any deductions or additions to pay. See D.C. Code § 32-1008(b); 7 DCMR § 911.2. For more on employers’ record-keeping requirements, see the discussion on “Overtime Rules” below.
Wages Must Be Paid Quickly After Termination of Employment
Unless otherwise specified in a collective bargaining agreement between an employer and a bona fide union, employers must meet the following requirements upon the termination of employment:
If a worker is discharged, wages must be paid the next “working day” following the discharge, except that when the worker “is responsible for monies belonging to the employer,” the employer is allowed a period of four days from the date of discharge to determine the amount owed and pay wages. See D.C. Code § 32-1303(1). If a worker quits, wages must be paid on the next regular payday or within seven days (not working days), whichever is earlier. See D.C. Code § 32-1303(2). If an employee is suspended as a result of a labor dispute, the employer must pay wages earned by the next regular payday. D.C. Code §32-1303 (3).
Vacation Time When Workers Leave Employment
Workers are entitled to accumulated vacation pay when they leave employment, unless there is an agreement to the contrary. An employee may establish a right to monetary compensation for accrued but unused leave by showing that (1) prior to performance of the work, there was an agreement entitling the employee to accumulate leave, and (2) as of the termination date he or she had accumulated the claimed number of days. Any qualification on that right is in the nature of an affirmative defense that must be pleaded and proved by the employer. See National Rifle Association v. Ailes, 428 A.2d 816 (D.C. 1981).
Written Notice of a Bona Fide Dispute
If there is a bona fide dispute as to the amount of wages due, the employer must give written notice to the employee of the amount of wages conceded to be due, and must pay such amount without condition within the time limits set forth in Sections 32-1302 and 32-1303. D.C. Code §32-1304. Acceptance of payment by an employee under this provision does not constitute a release as to the balance of the claim for wages. Id.
Employee Misclassification – D.C. Workplace Fraud Amendment Act
Scope and Application
In 2012, the District of Columbia City Council adopted the Workplace Fraud Amendment Act.. The act applies only to the construction industry, with “construction” defined broadly to include “all building or work on buildings, structures, and improvements of all types,” and including “moving construction-related materials on the jobsite.” D.C. Council Bill 19-0169 (2012).
The act creates a presumption of an employment relationship in the construction industry to prevent misclassification of employees as independent contractors. The act states that an employee-employer relationship will be presumed “when work is performed by an individual for remuneration paid by an employer.” Id. Employers can rebut this presumption by demonstrating, to the satisfaction of the D.C. Mayor’s Office, that one of two exemptions applies and the worker is therefore an independent contractor under the act. Id.
The act gives employers two ways to rebut the employee-employer presumption. First, an employer can satisfy the requirements to show that the worker is an “exempt person.” The employer must show that the worker:
- “Performs services in a personal capacity and employs no individuals other than a spouse, child, or immediate family member of the individual”; or
- “Performs services free from direction and control over the means and manner of providing the services, subject only to the right of the person or entity for whom services are provided to specify the desired result”; and
- “Furnishes the tools and equipment necessary to provide the service”; and
- “Operates a business that is considered inseparable from the individual for purposes of taxes, profits, and liabilities, in which the individual exercises complete control over the management and operations of the business.”
Id. Second, if the employer cannot demonstrate that the worker is an “exempt person,” the employer can also rebut the presumption of an employer-employee relationship by proving the following three elements:
- That the individual performing the work is free from control and direction over the performance of services;
- The individual is customarily engaged in an independent trade, occupation, profession, or business; and
- The work is outside the normal course of business of the employer for whom the work is performed.
Remedies and Enforcement
Employers found to have violated the act may be fined between $1,000 and $5,000 per employee misclassification. Employees misclassified can collect “any wages, employment benefits, or other compensation denied or lost as a result of the violation, plus an additional amount in liquidated damages.” Id. All forms of appropriate equitable relief, including reinstatement and seniority rights, are available to those harmed by misclassification. Reasonable attorneys’ fees and costs are also permitted. Id.
The act also allows for the assessment of penalties between $5,000 and $20,000 against any individual who knowingly aids or abets others in violating the act, or who knowingly forms a corporation or other entity for the purpose of evading the act or facilitating a violation of the act. “Knowingly” is defined as having “actual knowledge of, or acting with deliberate ignorance, or reckless disregard for the prohibition involved.” Id.
The Workplace Fraud Amendment Act assigns the D.C. Mayor’s Office as the primary enforcer of the act. The Mayor’s Office is charged with investigating employee classifications that may violate the act, and has the authority to inspect business premises and payroll records and question and take statements from individuals. Id.
Misclassified construction workers may pursue their claims through the D.C. Office of Wage-Hour or bring a private action in court against their employer under the act.The act also permits an interested party to file a private lawsuit. Although an “interested party” is defined broadly as any “person with an interest in compliance with this act,” the party must also be “aggrieved by a violation of this act…by an employer or entity.” Id. The relevant terms – “interest” or “aggrieved,” for example – have yet to be interpreted by courts. The action must be filed with the D.C. Superior Court within three years of the date of the alleged violation. Id.
Remedies in Wage Payment & Collection, Minimum Wage, and Overtime Cases
No Waiver of Rights by Agreement
A worker may not waive his or her rights under these acts, and any agreement by the employee and employer shall not be a defense to a claim for either unpaid wages or liquidated damages. See D.C. Code §§ 32-1012(d), 32-1305.
Types of Damages Available
Wage Payment and Collection – Liquidated and Consequential Damages Available
If an employer fails to pay a worker upon termination in accordance with the requirements of Section 1303(1), (2) or (3), the employer shall be liable to the employee for not only the wages due but also liquidated damages in the amount of 10% of the unpaid wages per working day after the day that wages were due or an amount equal to three times the amount of the unpaid wages, whichever is smaller. See D.C. Code § 32-1303(4). If the employer files a petition in bankruptcy, the liquidated damages will not accrue after the date of that filing if the employer is found to be bankrupt. See D.C. Code § 32-1303(4). The language of the act mandates an award of liquidated damages for violations of the act – i.e., such an award is not at the discretion of the court as it is under the D.C. Minimum Wage Revision Act. See Klingaman v. Holiday Tours, Inc., 309 A.2d 54 (D.C. 1973).
Minimum Wage and Overtime – Liquidated Damages Available
If an employer pays an employee less than she is due under the minimum wage and overtime provisions, that employer is liable for the unpaid wages plus an “additional amount” as liquidated damages up to treble the amount owed. D.C. Code § 32-1012. A court may decline to award liquidated damages if the employer demonstrates that “the act or omission that gave rise to the action was in good faith and that the employer had reasonable grounds for the belief that the act or omission was not a violation.” See D.C. Code § 32-1012(b)(2). If the employee has already accepted payment of unpaid wages pursuant to an investigation of the Office of Wage-Hour, they can still recover liquidated damages in a court action. D.C. Code § 32-1012(e) (specifying that an employee only waives his or her rights if she accepts full payment of wages and liquidated damages).
Where an employer is not found to have acted in good faith, treble damages are mandatory and not discretionary if requested by the employee. See Sivaraman v. Guizzetti & Assocs., 228 A.3d 1066, 1072 (D.C. 2020).
Attorneys’ Fees and Costs
Plaintiffs who prevail in wage payment and collection cases and in minimum wage and overtime cases must be awarded attorneys’ fees and costs. See D.C. Code §§ 32-1012(c), 32-1308(b). However, pro se plaintiffs are unable to recover attorneys’ fees—even those who are attorneys.
Attorneys’ fees are also mandatory for wage claims brought in small claims court, despite D.C. Small Claims Court Rule 19, which prohibits attorneys’ fees absent such a provision within a written agreement, and even in those cases, limits fees to 15% of the judgment absent a showing of “exceptional circumstances.” Small Claims Rule 19. The Wage Payment and Collection Act’s statutory provision requiring attorneys’ fees trumps the court rule. See Curry v. Sutherland, 1983 WL 131192, 26 Wage & Hour Cas. (BNA) 461 (D.C. Super. Ct. 1983).
Practice Tip: Attorneys appearing in Small Claims Court should be prepared to argue the basis upon which a fee award can be granted. It is recommended that the attorney take a copy of D.C. Code § 32-1308(b), Curry v. Sutherland, and the current Laffey Matrix of attorneys’ fees to provide to the judge (found at the U.S. Department of Justice website, www.usdoj.gov).
The D.C. Office of Wage-Hour can refer cases for criminal prosecution to the Criminal Division of the D.C. Office of Corporation Counsel’s Office of Public Protection and Enforcement (OCC), which will evaluate the case. The OCC considers the likelihood of proving the elements of the case: (1) an employer/employee relationship; (2) hours worked; (3) non-payment; and (4) the employer’s ability to pay at the time the wages were due. The more that advocates can develop evidence of these elements, the more likely it is that the OCC will take on the case. Another possibility is to file a criminal complaint against the employer with the D.C. police. The worker can file a criminal complaint with the local police station where she lives or where the employer is located. Note: At this writing, neither the OCC nor the D.C. police have been very vigorous in their efforts to enforce wage and hour laws where the D.C. Office of Wage-Hour has not been effective.
Wage Payment and Collection
An employer that willfully violates the act despite having the ability to pay its employee is guilty of a misdemeanor. For a first offense, the employer can be subject to a fine of up to $5,000, imprisonment of up to 30 days, or both. For subsequent offenses, the employer is subject to a fine of up to $10,000, imprisonment of up to 90 days, or both. See D.C. Code § 32-1307(a).
In addition to criminal penalties, the mayor can assess civil penalties, including $50 for each employee for the first offense, and $100 per employee for any subsequent offense. D.C. Code § 32-1307(b).
Minimum Wage and Overtime
Employers that willfully violate § 32-1010 of the act can be fined up to $10,000 and sentenced to up to six months’ imprisonment (imprisonment only on second conviction). Id. at § 32-1011 (a), (b). Criminal prosecutions are conducted by Corporation Counsel in D.C. Superior Court. Id. at § 32-1011(c).
In addition to criminal penalties, the mayor can assess civil penalties up to a maximum of $300 for the first violation and up to $500 per violation for subsequent violations. Id. at § 32-1011(d).
Practice Tip: A demand letter from the employee may want to reference the existence of criminal penalties; however, lawyers need to be careful not to run afoul of the ethical requirement that the lawyer does not threaten criminal prosecution for the purpose of advancing interests in a civil case.
Enforcement Options in Wage Payment & Collection, Minimum Wage, and Overtime Cases
Typically, when a worker has a wage payment (final paycheck, etc.), minimum wage, or overtime issue at the Workers’ Rights Clinic, the worker is advised of three options. First, the worker can write a demand letter. Second, the worker can file a claim for violations of wage payment, minimum wage, or overtime rights with the D.C. Office of Wage-Hour (within the D.C. Department of Employment Services). Third, the worker can file a complaint in D.C. Superior Court, in the Small Claims or Civil Division. As discussed below, each of these options has advantages and disadvantages.
The D.C. Office of the Attorney General’s Workers’ Rights & Antifraud Section also investigates wage theft violations. In addition to seeking recovery of wage and hour violations, workers can also report violations to the OAG by calling (202) 442-9828 or emailing firstname.lastname@example.org or email@example.com. Additional OAG workers’ rights resources are available at: https://oag.dc.gov/worker-rights.
|Practice Tip: Finding information on an employer
Victims of wage theft, particularly day laborers, often do not know the address, or even the name, of the employer who hired them. With a small amount of information, and some assumptions, the sources below may yield further information on an employer.
1. State business license databases:
2. Court records:
c. VA: www.courts.state.va.us/caseinfo/home.html (Virginia has a complicated case search system. First select either Circuit or District Court, then select a county, then select either the Criminal/Traffic or Civil system. For Northern Virginia employers, try multiple counties, including Arlington, Alexandria, Fairfax, Falls Church, Loudoun, and Prince William)
d. Federal: https://pcl.uscourts.gov/search (the PACER case locator will search all federal court systems, including bankruptcy courts. It requires a username and password to log in. The WLC may be able to provide its login details. Ask the supervising attorney at clinic)
3. Permit and licensing websites (these sites may provide a construction company name or a supervisor’s contact information):
a. D.C. (search by address): http://pivs.dcra.dc.gov/#!/searchHomePage
b. MD Home Improvement License Search: http://www.dllr.state.md.us/license/mhic/ then “License Search” in the menu on the left side of the page.
c. VA – Fairfax County (search by address): http://www.fairfaxcounty.gov/fido/permits/search.aspx?pgmcat=plan&pgmtype=address
D.C. Office of Wage-Hour
Filing a Claim
The Office of Wage-Hour (OWH) is the Mayor’s office that investigates wage and hour violations. There is no fee for the filing of a complaint at OWH. Workers can file claims:
Office of Wage-Hour
4058 Minnesota Ave. NE, Suite 3600
Washington, D.C. 20019
If a claimant has specific questions, they can call the Office of Wage-Hour at: (202) 671-1880. Workers can file claims for wage payment, retaliation, minimum wage, unpaid overtime, accrued sick and safe leave, and living wage violations within three years of the accrual of the cause of action (see later in this chapter for more information on statute of limitations). Filing an administrative complaint tolls the statute of limitations for purposes of a civil claim. D.C. Code § 32-1308(c).
The various claim forms, available in Spanish and English, can be found online:
- Accrued Sick and Safe Leave claim form
- Living Wage claim form
- Minimum Wage/Overtime claim form
- Retaliation claim form
- Wage Payment claim form
Persons with limited English proficiency or literacy problems can receive assistance in filling out the forms at the OWH or at the Washington Lawyers’ Committee. If necessary, be sure to request an interpreter when filing a claim. (See Section on the D.C. Language Access Act, in the Other Employment Rights chapter.)
As a first step, OWH will collect relevant evidence from each claimant. This includes, but is not limited to: pay stubs, bank records, names of witnesses, witness statements, relevant correspondence with employer. After initial evidence collection, OWH may determine it necessary to request additional information from the claimant. D.C. Code § 32-1308.01.
Notice of Claim to Employer
OWH will serve notice of a genuine claim to the employer, informing them of the specific allegations and statutes relevant to the claimed violation. An employer must respond to a claim, by either admitting or denying the claim, within 20 days of receiving it, by mail, from OWH. If an employer fails to respond within 20 days, the allegations shall be deemed admitted and OWH will issue an initial determination requiring the employer to provide relief. D.C. Code § 32-1308.01(c).
Initial Determination & Remedies
OWH has 60 days from the issuance of the notice of claim to issue an Initial Determination. Id. The Initial Determination indicates whether a violation has occurred and, if applicable, requirements for relief. Remedies can include: back wages, liquidated damages equal to the amount of unpaid wages, reasonable attorney fees and costs, reinstatement, injunctive relief, and other appropriate legal or equitable relief. Id.
If the employee has already accepted payment of unpaid wages pursuant to an investigation of the Office of Wage-Hour, they can still recover liquidated damages in a court action. D.C. Code § 32-1012(e) (specifying that an employee only waives his or her rights if she accepts full payment of wages and liquidated damages).
Both parties receive a copy of the initial determination, which also contains the losing party’s appeal rights.
Hearings & Appeals
If OWH fails to make a determination within that 60-day period, or a party disagrees with OWH’s determination, a party can request a formal hearing before an administrative law judge, within 30 days of the date of the determination. OWH may also seek conciliation, and work with the parties to mediate and settle the claims. D.C. Code § 32-1308.01(d).
A hearing should be scheduled for a date within 30 days of the request. The hearing should be a de novo review, similar to an unemployment appeal. Although the burden is on the complainant initially to prove liability, the burden will shift to the employer if (a) the employer failed to keep records or the records are inaccurate or incomplete; and (b) the complainant can show, as a matter of just and reasonable inference, the amount of work and the compensation due. In cases where the employer did not keep time records, this burden will likely not be difficult to meet.
At or before the hearing, the ALJ can issue subpoenas, compel production of evidence, and issue orders for unpaid wages, liquidated damages, and attorneys’ fees. D.C. Code § 32-1308.01(c-f). If a party fails to obey an ALJ’s order, late fees of 10% per month can apply, and the Mayor can deny or suspend business licenses for non-compliant employers. D.C. Code § 32-1308.01(g-h). A party seeking to appeal an ALJ order can do so in “a court of competent jurisdiction,” likely the D.C. Court of Appeals, by filing a Petition for Review within 30 days of the decision. D.C. Code § 32-1308.01(f)(3); D.C. App. R. 15 (a)(2).
Enforcing OWH Findings
OWH and other executive agencies have enforcement powers they can wield against non-compliant employers. These include the ability to deny a business license to an employer found liable within the last 3 years, and the ability to suspend or revoke a business license for a business that has not complied with an ALJ’s order. D.C. Code § 32-1308.01(g). These steps would likely need to be taken in conjunction with other D.C. government agencies, such as the D.C. Consumer and Regulatory Affairs office. On its own, OWH can pressure employers to accept its findings under threat of further civil action or criminal prosecution by the Office of the Attorney General. The Attorney General does not prosecute every case. The Mayor’s authority to take an assignment of the claim and sue in court is found at D.C. Code § 32-1012(e).
Practice Tip: The advantages to using the Office of Wage-Hour to pursue minimum wage or overtime claims are that it is free and usually faster than proceeding in court. The office may investigate the employer’s payroll records at the expense of the employer, which sometimes results in an earlier settlement.
D.C. Superior Court
DO THIS: Where an employer is not found to have acted in good faith, treble damages are mandatory and not discretionary if requested by the employee. See Sivaraman v. Guizzetti & Assocs., 228 A.3d 1066, 1072 (D.C. 2020).
Workers may sue employers under either the Wage Payment and Collection Act or the Minimum Wage Revision Act in any court of competent jurisdiction, including but not limited to the D.C. Superior Court’s Small Claims Court and its Civil Division. See D.C. Code §§ 32-1012 (b), 32-1308 (a).
Where to File – Small Claims Court or Civil Division
If the claim is only for the recovery of money and the amount in controversy is less than $10,000, it must be brought in Small Claims Court. See D.C. Code § 11-1321. In Small Claims Court, there is mandatory mediation that occurs as soon as 60 days after the filing of a complaint. See D.C. Code §§ 11-1322, 16-3906(a). If no agreement is reached in mediation, the proceedings could still be completed in as little as 90-120 days from the date the complaint was filed.
Cases that cannot be brought in Small Claims Court must be brought in the Civil Division. Proceedings in the Civil Division can take one to two years to complete. It is important to note that a judgment from either court may still need to be enforced in a subsequent collection case by the prevailing employee.
Lawsuits seeking minimum wages, overtime wages, or otherwise unpaid wages under the D.C. wage statutes may be brought as “collective” actions consistent with the procedures for collective actions brought under the FLSA. D.C. Code 32-1308(a)(C)(v).
Union members generally need to enforce their wage claims through the mechanism provided in their applicable collective bargaining agreement – the union grievance procedure. In Papadopoulous v. Sheraton Park Hotel, the Court held that the plaintiffs were required to exhaust grievance and arbitration procedures outlined within their collective bargaining agreement before filing claims under the Wage Payment and Collection Act or the Minimum Wage Revision Act. 410 F. Supp. 217, 220 (D.D.C. 1976).
Statutes of Limitations
Actions for unpaid wages or liquidated damages under the Wage Payment and Collection Act, the Minimum Wage Revision Act, the Sick and Safe Leave Act, or the Living Wage Act must be brought within three years of the accrual of the cause of action, or of the last occurrence if the violation is continuous. See D.C. Code § 32-1308(c).
Tolling of Statute of Limitations
The three-year statute of limitations is tolled in two circumstances: 1) from the date an employee files an administrative complaint or during any period an employer fails to provide the employee with actual or constructive notice of the employee’s rights. Id.
Under the D.C. Wage Payment and Collection Act, it is illegal to discharge, threaten, penalize, or in any other manner discriminate or retaliate against any employee or person who has, or is believed to have, exercised their rights under the this act. See D.C. Code § 32-1311. This includes, making a complaint to their employer, District employee, or federal employee; initiated or preparing to initiate a proceeding under the WPCA; provided information in an investigation; or testified or is about to testify in an investigation or proceeding. Id. Affected employees can file a civil or administrative complaint and receive relief in the form of enjoining the conduct; liquidated damages; front pay; reinstatement; or other forms of equitable relief. Id.
Under the D.C. Minimum Wage Revision Act, it is illegal to discharge or in any other manner discriminate against an employee because the employee “has filed a complaint or instituted or caused to be instituted any proceeding under or related to [the minimum wage and overtime provisions] or has testified or is about to testify in any proceeding.” See D.C. Code § 32-1010(a)(3); see also Freas v. Archer Services, Inc., 716 A.2d 998, 1003 (D.C. 1998) (holding that the lower court erred in granting a motion to dismiss because plaintiff claimed retaliatory dismissal after complaining about unlawful deductions from his paycheck).
 The employer must follow whichever law is more beneficial to the worker. See 29 U.S.C. § 218 (a), 29 C.F.R. § 541.4.
 The law defines “government assistance” as “a grant, loan, or tax increment financing that results in a financial benefit from an agency, commission, instrumentality, or other entity of the District government.” D.C. Code §2-220.02(3).
 However, references to the Portal-to-Portal Act have no force and effect. D.C. Code 32-1002 (10).
 But note that 7 DCMR § 902.6 states that subparts A, E, G and § 778.101of the FLSA regulations “shall have no force and effect.”
 7 DCMR § 999.1 defines “administrative,” “executive,” and “professional” capacity but also states that interpretations of these terms shall be made in accordance with 29 C.F.R. § 541. See also Jones & Assocs. v. District of Columbia, 642 A.2d 130 (D.C. 1994) (a worker without authority to hire, fire, or discipline employees, who did not have as his primary duty management of the company was not employed in a “bona fide executive or administrative capacity”).
 Persons who spend more than 20 percent of their time on household work not directly related to caring for the aged or infirm are not deemed a “companion for the aged or infirm.” 7 D.C.M.R. § 999.2.
 This law applies generally to railroad and airline employees and provides a separate mechanism for wage and hour complaints. See 45 U.S.C. § 151 et seq.
 White-collar workers may be paid only once per month in certain circumstances.
 See Laffey v. Northwest Airlines, the employer “must affirmatively establish that he acted both in good faith and on reasonable grounds.” Laffey v. Northwest Airlines, 567 F.2d 429, 465 (D.C. Cir. 1976) (citing to 29 C.F.R. § 790.22 (b), which states “(1) the employers must show to the satisfaction of the court that the act or omission giving rise to such action was in good faith; and (2) he must show also, to the satisfaction of the court, that he had reasonable grounds for believing that his act or omission was not a violation of the Fair Labor Standards Act.”). However, see also, McLaughlin v. Richland Shoe Co. 486 U.S. 128, 134, 108 S.Ct. 1677, 1682 (1988). The McLaughlin Court criticized the Laffey standard and stated that “willful” should be defined as it was in Trans World Airlines, Inc. v. Thurston, which defined the term under the ADEA. Trans World Airlines, Inc. v. Thurston, 469 U.S. 111, 105 S.Ct. 613 (1985).
 However, an individual employee may assert some federal claims, including FLSA claims, in court without first exhausting applicable grievance procedures. “The pervasive statutory schemes of both Title VII and FLSA evidence Congressional intent that these rights may be judicially enforced.” Leone v. Mobil Oil Corp. 523 F.2d 1153, 1157 (D.C. Cir. 1975) (citing Iowa Beef Packers, Inc. v. Thompson, 405 U.S. 228, 229, 92 S.Ct. 859, 860, 31 L.Ed.2d 165 (1972)).
Federal employees in a union bargaining unit covered by the provisions of a collective bargaining agreement (CBA) pursue wage and overtime claims as union grievances, unless the CBA specifically excludes the Fair Labor Standards Act (FLSA) or overtime claims. See 5 C.F.R. § 551.703.
For those employees not in a bargaining unit or whose CBA excludes such claims, workers can file claims with their agencies, with the Office of Personnel Management (OPM), or file a lawsuit in U.S. District Court or the Court of Federal Claims. See 5 C.F.R. §§ 551.703(c); 551.705. However, employees may not simultaneously file claims with both their agencies and OPM.
If the worker decides to file a complaint with his or her agency and receives an unfavorable decision from the agency, she may then go to the OPM. If she chooses to first file a complaint with OPM and receives an unfavorable decision, however, she may not then seek a favorable determination from the agency. See 5 C.F.R. § 551.705. OPM encourages workers to use their agencies’ grievance procedures, if available, but does not require it. OPM claims must be sent, in writing, to the following address:
Classification and Pay Programs Manager
Center for Merit System Accountability
Office of Personnel Management
1900 E St NW, Rm. 6484
Washington, D.C. 20415
For information regarding the contents of the claim, please visit the OPM website, at www.opm.gov. Alternatively, workers may contact OPM at 202-606-7948. Claims may not be filed electronically. If the worker’s total claim, including liquidated damages, is for more than $10,000, the case may only be filed in the Court of Federal Claims.
If a federal employee alleges a violation of the equal pay requirement (not minimum wage, overtime, or child labor laws), the employee should file a complaint with the Equal Employment Opportunity Commission. See 5 C.F.R. § 551.701(b).
D.C. Government Employees
D.C. government employees are exempt from D.C.’s wage payment and collection law and the minimum wage and overtime law. However, D.C. employees are covered by the Fair Labor Standards Act, and most employees are covered by the Comprehensive Merit Personnel Act, which contains some wage and hour provisions.
In particular, the Comprehensive Merit Personnel Act provides that employees who are not covered by a collective bargaining agreement are entitled to overtime to the extent required by the Fair Labor Standards Act. See D.C. Code § 1-611.03(e).
The D.C. Code mandates a 40-hour workweek for D.C. government employees. See D.C. Code § 1-612.01(a). In addition, employees cannot work more than six consecutive days; rather, the workweek should be five days, Monday through Friday when practicable. Id. If the workweek is not Monday through Friday, then the worker should have two days off scheduled consecutively. A worker should have the same working hours each day, and any non-overtime workday should not exceed eight hours. There should be no scheduled breaks in work time more than one hour (except in flexible schedules). See D.C. Code § 1-612.01(b). Work assignments must be scheduled at least one week in advance.
In lieu of overtime, compensatory time is available for D.C. government employees at the discretion of the employer. See D.C. Code § 1-611.03(d); see also 29 C.F.R. §§ 553.20 to 553.28. The worker earns 1.5 hours off for every one hour of overtime worked. A worker can accrue up to 240 hours (30 days), or 480 (60 days) for emergency workers. See 29 C.F.R. § 553.21.
D.C. government employees cannot file claims at the Office of Wage-Hour to collect unpaid wages or to protest minimum wage or hour violations. Instead, workers should write to their personnel and payroll departments and keep copies of all correspondence. At the same time, employees should file union grievances to protect their claims and do so quickly because many grievance procedures have very short deadlines. A worker covered by a collective bargaining agreement should and must follow the procedures in his or her collective bargaining agreement. Non-union employees should follow the worker grievance procedure contained in the District Personnel Manual, except for D.C. Public School non-union employees, who should see 5 DCMR §§ 800 to 906.8.
Practice Tip: D.C. government workers may get better results if they send copies of complaint letters to the head of the agency, the head of the division, the head of Labor Relations, the Mayor’s Office and the city councilperson with jurisdiction over the agency.
 There are exceptions for firefighters and public school and University of the District of Columbia (UDC) employees, who are subject to the wage rules of the Board of Education and the UDC Board.
Like D.C., Maryland has both minimum wage and overtime law, and a wage payment and collection law. The Maryland Wage and Hour Law (MWHL), Md. Code Ann., Labor & Empl. § 3-401 et seq., addresses minimum wage and overtime protections. The Maryland Wage Payment and Collection Law (MWPCL), Md. Code Ann., Labor & Empl. § 3-501 et seq., addresses the time and receipt of pay. Any agreement not to comply with these laws is void. See Md. Code Ann., Labor & Empl. § 3-405. These laws are discussed in detail below.
|Practice Tip: The MWHL draws on numerous definitions and concepts found in the Fair Labor Standards Act. Where there is no case law under the Maryland law, Maryland courts will seek guidance from FLSA case law.|
The following definitions apply to Maryland’s minimum wage and overtime law:
Employer: The term “employer” is broadly defined. Of particular importance, the term explicitly includes individuals as employers. The definition is drawn from the Fair Labor Standards Act, as are many definitions and doctrines applicable to the MWHL.
Practice Tip: Whenever possible, name individuals as defendants in addition to the business entity. Individual liability as an “employer” is fundamentally different and easier to establish under federal and state wage and hour laws than under other statutes or common-law doctrines, which typically require a “piercing of the corporate veil” to attach liability to individuals. Establishing liability of the entity and individuals increases the chances of collecting on a judgment and also increases the pressure on the defendants to settle the case.
Working Time: The term “working time” is defined to include all the time the employee is required to be on the employer’s premises, on duty, or at a prescribed place; is permitted to work; is required to travel in connection with the business of the employer; or waits on the employer’s premises for work. This time does not include commuting time; however, as stated above, after reporting to work the employee must be paid for the time necessary to travel to a worksite.
Work: Work is defined as any service performed by an employee on the employer’s time. It does not involve voluntary service so long as the individual took the job knowing that he or she would not be paid and the activity is performed for a charitable, educational, non-profit, or religious organization.
Work does not necessarily require an employee to do or accomplish anything but involves fulfilling the requirements of the employer – even if that means doing nothing for an extended period of time. It includes time traveling to a worksite if the employee is required to report to, check in, or check out at a home office or shop.
When free to leave without penalty, the worker is on his or her own time, even if instructed to remain “on call” with a beeper. Once called back to work, however, the employer must compensate the employee.
Determining the Wages of Tipped Employees: When determining the wage of an employee who receives tips, the employer may credit the employee with a predetermined amount received from tips, currently $8.87. The employee may challenge the amount credited by proving that she actually received less than the amount set by the employer. See Md. Code Labor & Empl. § 3-419. For this provision to apply, the employee must regularly receive more than $30 in tips per month, have been informed by his or her employer about the provision, and must keep all of the tips received (although pooling arrangements are considered acceptable).
Exemptions from Coverage
The following workers are exempt from the Maryland’s minimum wage and overtime law and its wage payment law:
- administrative, executive, or professional workers;
- non-administrative camp employees;
- children younger than 16 who work no more than 20 hours per week;
- outside salespeople;
- commissioned workers;
- immediate family members of the employer;
- drive-in theater employees;
- workers employed “as part of the training in a special education program for emotionally, mentally, or physically handicapped students under a public school system”;
- workers for a company that cans, freezes, packs, or processes perishable fresh fruits and vegetables, poultry, or seafood;
- volunteers for a charity, educational institution, not-for-profit, or religious organization, if (a) the service is provided gratuitously; and (b) there is, in fact, no employer-employee relationship;
- workers for a café, drive-in, drugstore, restaurant, tavern, or other similar establishment that (i) sells food and drink for consumption on the premises, and (ii) has a gross annual income of less than $400,000;
- agricultural workers if during each quarter of the preceding calendar year, the employer used no more than 500 agricultural-worker days;
- workers engaged in the range production of livestock ; and hand-harvest laborer who is paid piece-rate basis or recognized to have been paid on that basis, if (i)(1) commutes daily from permanent residence of the individual to the employer’s farm; and (2) during the preceding calendar year, was employed in agriculture less than 13 weeks; or (ii) (1) under the age of 17; (2) is employed on the same farm as a parent of the individual or a person standing in the place of the parent; and (3) is paid the same rate that an employee who is at least 17 years old is paid on the same farm
See Md. Code Ann., Labor & Empl. § 3-403.
Maryland Minimum Wage & Overtime Law
The minimum wage as set by the Fair Labor Standards Act is a “floor.” As of the printing date of this manual, the federal minimum wage is $7.25/hour. Up-to-date information on the current federal minimum wage can be found at 29 U.S.C. § 206, or at the U.S. Department of Labor’s web site: https://www.dol.gov/agencies/whd/minimum-wage. As of January 1, 2022, Maryland increased the state minimum wage to $12.20 per hour for employers with 14 or fewer employees. Employers with 15 or more employees must pay a minimum wage of $12.50 per hour. See Md. Code Ann., Labor & Empl. § 3-413. In Montgomery County, the minimum wage is $14.50 per hour for employers with 50 or fewer employees, and $15.65 per hour for employers with more than 50 employees. See Montgomery County Code Ch. 27 Art. XI. (For more information see https://www.dllr.state.md.us/labor/wages/minimumwagelawmont.pdf). Prince George’s County now follows the Maryland state minimum wage. See Prince George’s County Code, Labor Code, Subtitle 13A.
|Maryland Minimum Wage*|
|Start Date||End Date||15 or More Employees||14 or Fewer Employees|
|January 1, 2022||January 1, 2023||$12.50||$12.20|
|January 1, 2023||January 1, 2024||$13.25||$12.80|
|January 1, 2024||January 1, 2025||$14.00||$13.40|
|*See above for Montgomery County and Prince George’s County minimum wage rates.|
Disabled workers must be paid the minimum wage except in cases where the U.S. Department of Labor has issued a certificate to the employer authorizing payment of less than the minimum wage. See Md. Code Ann., Labor & Empl. § 3-414.
Charges for Housing & Meals
An employer may include, as part of the wage of an employee, the cost that the employer incurs in providing board, lodging, or any other in-kind payment to the employee, unless a collective bargaining agreement precludes the items from being considered a part of an employee’s wage. The Commissioner, however, may limit the charge to the actual cost, the reasonable cost, the average cost, or any other appropriate measure of fair value. See Md. Code Ann., Labor & Empl. § 3-418.
Cost of Uniforms
Generally, the cost of providing and maintaining a uniform that bears the name or logo of the employer may be passed on to an employee through a wage deduction – but only with the employee’s signed written authorization. In addition, an employee may be held responsible for the depreciated value of the uniform if it is not returned as required.
Break and Meal Time
There is no law requiring an employer to provide breaks, including lunch breaks, unless the employee is under 18 years old or an employee of certain retail establishments.
An employer who chooses to provide a break, however, does not have to pay wages for lunch periods or other breaks in excess of 20 minutes where the employee is free to leave the worksite (or workstation if leaving the workplace is physically impractical), in fact takes their lunch or break (whether freely choosing to leave or remain at the worksite), and the employee does not actually perform work.
If employees are told their pay will be reduced each day by one-half hour for lunch, and they are not free to take this lunch period without an expectation or reasonable understanding that they must work or be on hand to work, they must be paid for the time. A “reasonable understanding” that they must work or be on hand to work is a condition in which it is generally known, or the employee reasonably believes, that failure to perform work (or be available “on hand” to perform work) during their break, will result in some negative effect on employment. See Maryland Guide to Wage Payment and Employment Standards.
Additional Exemptions from Coverage
In addition to the employee exemptions identified above, Maryland’s overtime law does not apply to the following employers:
- hotels or motels;
- gasoline service stations;
- private country clubs;
- non-profit entities engaged in providing temporary at-home care services for the aged or infirm;
- amusement or recreational establishments if certain conditions are met;
- those for whom the Secretary of Transportation may set qualifications and maximum hours of service under 49 U.S.C. § 31502;
- mechanics, salespeople, or partspersons for automobiles, farm equipment, trailers, or trucks (if employer sells to the consumer);
- taxicab drivers
See Md. Code Ann., Labor & Empl. § 3-415(b) and (c).
|Practice Tip: When litigating minimum wage and overtime claims, it is very important to simultaneously analyze the case under both the FLSA and MWHL. For example, while live-in domestic workers are not covered by the overtime protections of the FLSA, they are covered by the overtime protections of the MWHL. Similarly, while a Maryland motel housekeeper is not covered by the Maryland overtime protections, that same person is not exempt from the FLSA’s overtime protections.|
A regular workweek is 40 hours within a seven-day period. See Md. Code Ann., Labor & Empl. § 3-420. Any additional hours must be credited at an overtime rate of 1.5 times the “regular rate” at which the employee is paid. An employer cannot set a “regular” workweek of more than 40 hours and thereby avoid overtime liability unless subject to the limited exceptions listed below. When an employer pays a weekly salary and the employee works more than 40 hours, the employee is entitled to overtime under the FLSA and Maryland law.
Exceptions to the 40-Hour Workweek
Overtime may be computed based on a 60-hour workweek if the employee is engaged in agriculture and exempt from the provisions of the FLSA.
Overtime may be computed based on a 48-hour workweek for an employee of a bowling establishment and for an employee of an institution that: (1) is not a hospital, but (2) is engaged primarily in the care of individuals who are aged, mentally retarded or sick, or have a mental disorder, and reside at the institution.
Each employer shall keep, for at least three years, in or about the place of employment, a record of:
- The name, address, and occupation of each employee;
- The rate of pay of each employee;
- The amount that is paid each pay period to each employee; and
- The hours that each employee works each day and workweek;
See Md. Code Ann., Labor & Empl. § 3-424.
These record-keeping requirements mirror those of the Fair Labor Standards Act. Responsibility to keep records falls on the employer, and failure to provide the itemized statements can create an adverse inference at trial that the employer did not properly pay its workers. See Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 687 (1946). The Fourth Circuit has similarly applied Anderson to claims under Maryland’s wage and hour laws where employers failed to keep records of employee’s hours. See Castillo v. Urquhart, 855 F. App’x 877, 880 (4th Cir. 2021). When the employer lacks records, an employee’s direct testimony of his or her hours worked will generally be acceptable evidence of hours worked. Employees should be advised to keep their own records of hours worked, as contemporaneous employee records of hours worked are regularly accepted in court as evidence of entitlement to unpaid wages, including unpaid minimum wage and overtime compensation.
|Practice Tip: The record-keeping requirements of the FLSA, the MWHL, and the MWPCL should be read in tandem. Employers will often not conform to these requirements, and such violations may serve to strengthen your client’s claim of unpaid wages. See e.g., Marshall v. Gerwill, Inc., 495 F.Supp. 744 (D.Md. 1980).|
Statement of Wages and Deductions Must be Provided to Employees
An employer must furnish to each worker at the time of payment a statement of the gross earnings of the employee and deductions from those gross earnings. If the employer chooses to change the wage or payday of an employee, the employer must provide notice of the change at least one pay period in advance. See Md. Code Ann., Labor. & Empl. § 3-504.
State and Local Prevailing and Living Wage Laws
A patchwork of other laws gives additional wage protections and benefits to various types of workers in Maryland. Perhaps the most well-known are “Prevailing Wage” protections for workers in the construction industry working under certain public contracts. These are also sometimes referred to as “scale jobs” because detailed wage scales are set by governmental determination for different occupational categories and level of worker experience and training.
Maryland’s Prevailing Wage Law
Maryland’s Prevailing Wage Law, Md. Code Ann. State Fin. & Procurement §17-201, et seq., governs, among other things, an employee’s rate of pay, working hours, and other employer obligations on construction projects for which the state expends more than $500,000, and when state public funds cover 50% or more of the construction expenses. For construction projects covered by this law, all contractors and subcontractors on the job must pay the required prevailing wage rate, as well as overtime pay for hours worked in excess of 10 hours on any given day or for hours worked on Sundays and legal holidays.
Workers have a private right of action for the difference between the wages they were actually paid and the wages to which they were entitled under the established prevailing wage rates. In addition, aggrieved employees may also avail themselves of assistance from the Maryland Division of Labor and Industry, Prevailing Wage Unit, 1100 North Eutaw St., Room 606, Baltimore, MD 21202; (410) 767-2342. Contractors are subject to additional penalties for their failure to pay prevailing wage rates and for their failure to submit required certified payroll information to the state.
Maryland’s Living Wage Law
Maryland’s Living Wage Law is similar in many respects to its prevailing wage law, but it applies to different industries. While the prevailing wage law applies primarily to public works and construction contracts, the Living Wage Law applies to service contracts, with services defined as the “rendering of time, effort, or work rather than the furnishing of a specific physical product.” COMAR 21.11.10.01. The law covers most forms of maintenance and information technology contracts, provided they meet the requirements listed below.
To fall under the Living Wage Law, employers must have state contracts lasting at least 13 weeks, valued for at least $100,000, beginning on or after Oct. 1, 2007. For a subcontractor to be covered, the prime contractor must be covered and certain size and contract value requirements must be met. Visit www.dllr.state.md.us for information on subcontractor requirements.
To be covered under this law, employees must be older than 18 and spend at least half of their work time on a public contract for the required value. If covered, employees on public service contracts in Tier 1 (counties of Montgomery, Baltimore, Prince George’s, Howard, Anne Arundel, and the city of Baltimore) must be paid $14.55 per hour. Employees in Tier 2 (all other counties) must be paid $10.93 per hour. The Commissioner of Labor and Industry normally sets the rates within 90 days of July 1 each year.
The Commissioner of Labor and Industry enforces the Living Wage Law and can assess fines against employers. Employees can sue privately for their wages as well.
Baltimore City’s Prevailing & Living Wage Laws
Baltimore City follows the State of Maryland’s minimum wage law ($12.20-$12.50), but has its own prevailing and living wage ordinances. The Baltimore City Wage Commission is charged with enforcing these standards. See https://civilrights.baltimorecity.gov/wage-commission/commission.
Baltimore was among the first jurisdictions in the country to pass a living wage (City Ordinance No. 442, City Code, Hours and Wages – Service Contracts § 26), which applies to work performed under city service contracts. The current living wage rate is $12.74 per hour beginning July 1, 2022. The prevailing wages for city-funded construction jobs under contracts worth $5,000 or more are established by the Board of Estimates and cover different job classifications and types of projects. Current prevailing wage rates can be found at https://civilrights.baltimorecity.gov/wage-commission/wages#living. The City Wage Commission may be contacted at: 7 E. Redwood St. 9th Floor, Baltimore, MD 21202. Phone: (410) 396-4835. Or through the online portal: https://civilrights.baltimorecity.gov/wage-commission/contact-us.
Montgomery County’s Minimum & Living Wage Law
In Montgomery County, the minimum wage rates are $15.65 per hour for employers with 51 or more employees, and $14.50 per hour for employers with 50 or fewer employees. Tipped employees must be paid at least $4.00 per hour by their employer.
Montgomery County has a living wage law that requires contractors working under a service contract with the county to pay at least $16.00 per hour (a rate that is subject to upward adjustment to continue to reflect a living wage standard). The wage requirements for county service contractors are published on the Montgomery County website at: https://www.montgomerycountymd.gov/PRO/DBRC/wage-requirements-law.html.
Prince George’s County’s Minimum & Living Wage Law
As of January 1, 2021, Prince George’s County applies the Maryland State minimum wage law. See Maryland Minimum Wage and Overtime Law Prince George’s County.
Prince George’s County passed a living wage bill that requires contractors under county service contracts with a value greater than $50,000 and who employ 10 or more workers to pay employees a living wage of $15.60 per hour. The wage rate will be adjusted in relationship to the Consumer Price Index.
Workplace Fraud Act of 2009
The Workplace Fraud Act of 2009 addresses the widespread problem of misclassification of employees as “independent contractors” in the construction and landscaping industries. It became effective Oct. 1, 2009, and creates a presumption that, absent an exception, any work in these industries “performed by an individual for remuneration paid by an employer” is considered an employer-employee relationship. Md. Code Ann., Labor & Empl. § 3.903. The act establishes a system of fines. The law also requires employers in the construction and landscaping industries to provide notice and explanation of an independent contractor classification to any individual classified as an independent contractor or an exempt person with whom they contract. The law gives the Commissioner of Labor and Industry the authority to investigate workplace fraud in the construction and landscaping industries, as workers in these industries are often classified incorrectly.
The employee-employer presumption in the Workplace Fraud Act is subject to three exceptions. An individual will not be considered an employee if: (1) the individual is an exempt person (e.g., s/he performs services in personal capacity, free from outside direction and control, and personally provides the necessary tools/equipment); (2) the employer demonstrates that the individual usually controls his or her own business and usually works as an independent contractor; or (3) the employer provides the Commissioner with a signed contract with terms that clearly indicate that the individual is an independent contractor and a similar notice posted in a conspicuous place at every jobsite and at the place of business of the person or business for which the individual performs services (in both English and Spanish). See Md. Code Ann., Labor & Empl. § 3.903.1 et seq.
The requirements for each of these exceptions are extensive and fact-specific. See the construction and landscaping illustrations at www.dllr.state.md.us for more information.
The Workplace Fraud Act also established an Employee Misclassification Task Force, charged with ensuring agency cooperation and enforcement of the act. Individuals who believe they have been misclassified can submit a form to the Task Force, which, after an investigation and a positive finding, will prompt the Task Force to notify other state agencies (Unemployment, Workers’ Compensation, etc.) that this employee has been misclassified by his employer. Each agency will then take action according to the needs of the case and their own internal procedures and definitions. The form to report a potential misclassification can be found at How to Get Help Resolving Worker Classification Issues – Worker Classification Protection – Division of Labor and Industry (state.md.us). Completed forms can be mailed to:
Division of Labor and Industry
Worker Classification Protection Unit
1100 N. Eutaw St., Room 607
Baltimore, MD 21201
Maryland Wage Payment and Collection Law
The Maryland Wage Payment and Collection Law (MWPCL) passed in 1991 and is codified at Md. Code Ann., Labor & Empl. § 3-501 et seq. It requires employers to pay wages within certain time limits and provides remedies for violations. The text of the law and a relatively comprehensive guide named the “Maryland Wage Payment Guide” (https://www.dllr.state.md.us/labor/wagepay/) can be found on the Maryland Department of Labor & Industry website.
Additional Coverage Issues and Definitions
The law applies to all employers “who employ an individual in the State” of Maryland. The Wage Payment and Collection law does not specifically address workers who work in more than one jurisdiction, but like all remedial legislation, it should be liberally interpreted to find the broadest possible coverage. Md. Code Ann., Labor & Empl. § 3-501(b). The MWPCL does not apply to independent contractors. Thus, under the MWPCL, like the FLSA and MWHL, it is important to be able to identify an “employee” versus an “independent contractor.”
Employee v. Independent Contractor:
For employee/independent contractor issues in the construction and landscaping industries in Maryland, see the discussion of the Workplace Fraud Act of 2009 above.
For the employee/independent contractor analysis in all other industries, the following factors should be considered:
- Who has the right to control and direct the individual who performs the services, not only to the result but to the details and means by which that result is accomplished?
- Who has the right of discharge?
- Who furnishes the tools, materials, and a place to work?
- Is the person performing the services in a position to suffer financial loss if the objective is not achieved?
- A signed agreement declaring that a worker is an independent contractor does not, by itself, establish that she is such.
This is often a complex determination that has huge implications for both the employer and employee (e.g., tax implications).
Wages: The act defines “wages” to mean “all compensation due to an employee for employment,” including overtime, a bonus, commission, fringe benefit, or any other remuneration promised for service. See Md. Code Ann., Labor & Empl. § 3-501(c).
Fundamental Rules about Wage Payments
Wages for Non-Exempt Workers Must be Paid at Least Twice a Month
Wages for non-exempt workers must be paid at least twice each calendar month, and paydays must be regular and designated in advance by the employer. If the regular payday of an employee is a non-workday, an employer shall pay the employee on the preceding workday. See Md. Code Ann., Labor & Empl. § 3-502(a)(1). Administrative, executive, or professional employees are exempt workers under this provision and may be paid less frequently than twice a month. Id. at § 3-502(a)(2).
Wages Must be Paid Quickly after Termination of Employment
Each employer must pay a terminated employee all wages due for previous work done on or before the first pay day after the termination on which the employee was regularly scheduled to be paid. See Md. Code Ann., Labor & Empl. § 3-505. This section does not permit employers to avoid the prompt payment after termination to administrative, executive, and professional employees. This is a “by the next payday” requirement.
Vacation Time when Workers Leave Employment
Workers are not automatically entitled to accumulated vacation pay when they leave employment; it depends on the employer’s regular and stated policy. If the employer informs employees in writing at the time of hiring that unused vacation time will be lost or forfeited when their employment is terminated, then an employee will not be able to claim and recover compensation for unutilized vacation time. On the other hand, where the employer does not have a written policy that limits the compensation for accrued leave to a terminated employee, that employee is entitled to the cash value of whatever unused earned vacation leave was left – provided it was otherwise usable.
Sick Leave when Workers Leave Employment
Sick leave is a safeguard against illness, and as such, unlike vacation pay, sick leave generally cannot be claimed at termination unless expressly written into the employee’s contract or stated by the employer’s policy.
There is no requirement that any employer pay a departing employee severance pay.
Under certain conditions, what is termed “severance pay” is actually deferred compensation for work already performed (consideration for past services) or given as a gift, bonus, or incentive for the outgoing employee to do or refrain from certain actions. For a detailed discussion, see Stevenson v. Branch Banking and Trust Corp., 159 Md. App. 620, 638 (2004).
Deductions from Wages
An employer may not take any deductions from an employee’s paycheck unless the deduction is pursuant to existing law (such as the deductions for income tax withholding and social security) or those otherwise legally permitted. Md. Code Ann., Labor & Empl. § 3-503. The Maryland Division of Labor and Industry explains the basic standards for wage deductions as follows:
“Work, whether satisfactory or not, must be awarded compensation. Wage deductions are extraordinary, and are prohibited unless:
- A court has ordered or allowed the employer to make the deduction. Examples include court ordered wage garnishments and orders to pay child support.
- The Commissioner of the Maryland Division of Labor and Industry has allowed the deduction to offset or “pay for” something of value the employee has received. Examples include long-distance telephone calls on the employer’s business phone, personal loans, wage advances, etc.
- Allowed by some law or regulation of the government. Examples include state and federal taxes.
- The employee has given express written authorization to the employer to make the deduction. This should take the form of a separate and distinct statement, signed by the employee, concerning only the deduction and nothing more. Even with a proper authorization, however, employers must still pay at least the federal minimum wage in the case of a deduction made to offset a loss to the employer due to the admitted or court determined fault or negligence of an employee (for example, careless damage to the employer’s truck). If the deduction is made to offset something the employee received or retained from the employer which had monetary value (for example, personal loan, use of long-distance telephone line, materials, etc.), the deduction may reduce the employee’s wages below the minimum wage. Finally, an authorized deduction may be invalid if it violates or is inconsistent with other federal or state laws or regulations.”
|Practice Tip: Some employers regularly violate this section of the law by illegally deducting from employees’ pay. Illegal deductions include those for uniforms when not authorized; deductions for “breakage, spoilage,” and other undocumented costs; and workers’ compensation insurance payments.|
Maryland employers are prohibited from taking any adverse employment action against an employee who inquiries about the employee’s own wages or another employee’s wages. Under the law an employer may not prohibit an employee from: inquiring about, discussing, or disclosing the wages of the employee or another employee; or requesting that the employer provide a reason for why the employee’s wages are a condition of employment. Nor can employers require an employee to sign a waiver or any other document that purports to deny the employee the right to disclose or discuss the employee’s wages. Md. Labor and Employment Code Ann. § 3-304.1
Employers are prohibited from taking any adverse employment action against an employee for inquiring about the employee’s wages or another employee’s wages; disclosing the employee’s own wages; discussing another employee’s wages if those wages have been disclosed voluntarily; asking the employer to provide a reason for the employee’s wages; or aiding or encouraging another employee’s exercise of rights under this section. If an employer violates these provisions, affected employees can seek injunctive relief, recovery of actual damages and an additional equal amount as liquidated damages, and attorney’s fees. Id. at § 3-307.
Remedies & Enforcement
Maryland Minimum Wage & Overtime Violations
If the employer pays the worker less than the minimum wage, the worker may bring an action against the employer for the amount due and reasonable attorneys’ fees and costs. Attorneys’ fees and costs, however, are not mandatory. See Md. Code Ann., Labor & Empl. § 3-427(a). An agreement to pay the worker less than the minimum wage is not a valid defense to the action. Id. at 3-427(c). The act also provides for a criminal penalty of a fine up to $1,000. Id. at 3-428(c).
Maryland Wage Payment Violations
If the employer has not paid the worker, the worker can bring an action two weeks after he or she should have been paid. The worker may recover the amount owed, and if the wages were not withheld “as a result of a bona fide dispute,” up to three times the amount of the wages owed, plus attorney’s fees and costs. See Md. Code Ann., Labor & Empl. § 3-507.
In addition, an employer who willfully violates the Maryland Wage Payment Act is guilty of a misdemeanor and may be fined as much as $1,000. A worker who knowingly makes a false statement to a government official in connection with an investigation under this subtitle is guilty of a misdemeanor and may be fined as much as $500. See Md. Code Ann., Labor & Empl. § 3-508.
Finally, notwithstanding an employee’s claim, the Commissioner of Labor and Industry may enforce the provisions of the Maryland Wage Payment Act by (a) trying to informally mediate any dispute; or (b) with the written consent of the employee, asking the Attorney General to bring an action on behalf of the employee. See Md. Code Ann., Labor & Empl. § 3-507. As in an employee suit, the court may award up to three times the deserved wage, and reasonable counsel fees and other costs. Under current practice, the Commissioner is underfunded and not enforcing the Wage Payment Act through this government power.
It is now settled that the MWPCL may be used to recover wages owed under the MWHL and FLSA, and that it is within the discretion of the court to award damages for those unpaid wages pursuant to the remedies available under the MWPCL. Peters v. Early Healthcare Giver, Inc. 97 A.3d 621, 439 Md. 646 (2014). This decision rejects U.S. district court decisions which held to the contrary. See e.g., McLaughlin v. Murphy, 372 F. Supp. 2d 465 (D.Md. 2004).
Attorneys’ Fees and Costs
A worker who wins his or her lawsuit under either the MWHL or MWPCL may seek reasonable attorneys’ fees and other costs, though the award of costs and fees is not mandatory. As stated in Friolo v. Frankel, 373 Md. 501 (2003), the lodestar approach (multiplying the reasonable number of hours worked times a reasonable hourly rate of the attorney, then considering case-specific adjustments) applies under both the MWHL and MWPCL. The court specified that in all instances, a case-by-case analysis will be done to reach a final award of attorneys’ fees. See also Md. Code Ann., Labor & Empl. § 3-507.1.
|Practice Tip: Under the FLSA, an award of attorneys’ fees to a prevailing plaintiff is mandatory. Thus, if bringing a claim under MWHL and/or MWPCL, the attorney should analyze whether there is a claim under the FLSA (which is likely if there is a MWHL claim) and also plead the FLSA if it is important to be able to recover attorneys’ fees.|
|Practice Tip: Sometimes workers will not know the name or address of their employer, information necessary to write a demand letter or file a complaint. See “Practice Tip: Finding information on an employer” on page 5 to learn more about how to locate a Maryland employer using online public records.|
Both the MWHL and MWPCL allow for private parties to bring suit. Lawsuits can be brought in state District Court for claims less than $30,000. The District Courts conduct bench trials only. Claims valued at $5,000 or less are considered “small claims”; in small claims court there is no discovery and the rules of evidence generally do not apply. The state Circuit Court has jurisdiction for claims more than $5,000. Either plaintiff or defendant can request a jury. If a plaintiff files a claim in district court that is valued over $15,000, a defendant can request the case be transferred to Circuit Court by requesting a jury.
Pursuant to its supplemental jurisdiction, a federal court may hear a case in which claims are brought pursuant to the FLSA and state law.
|Practice Tip: Both the MWHL and the MWPCL allow for, but do not require, the prevailing plaintiff to be awarded attorneys’ fees. State court judges do not generally have the same familiarity with trying cases under fee-shifting statutes as do federal judges. This should be taken into account when determining in which forum to file suit.|
Effective October 1, 2013, Maryland’s Unpaid Wage Lien Law permits victims of wage theft to file pre-judgment liens against the personal or business property of employers in Maryland. Md. Code Ann. Labor & Empl. § 3-1101 et. seq. Ideally, this method is faster than a court case and less complicated than a mechanics’ lien, and will put pressure on the employer to promptly pay owed wages or negotiate a settlement.
Unpaid workers seeking to file a lien must first send notice to the employer of the pending lien, listing the worker’s name, the employer’s name, the property on which the lien will apply, the dates worked when wages are due, and the amount of unpaid wages and damages (including attorneys’ fees) due. This notice must be delivered in person, to a person of suitable age at the person’s home, or via certified mail, restricted delivery. COMAR 09.12.39.02.
Once the employer receives the notice, it has 30 days to file a complaint in the Circuit Court in the county where the property is located. The complaint must list when the employer received the notice, and explain why the wages claimed are not due or are otherwise controverted. The employee must receive a copy of the complaint. COMAR 09.12.39.03. Once the employer files a complaint, a formal court case can commence concerning the work performed and the wages owed.
Wage Lien Statement
If, following receipt of the notice, the employer does not file a complaint (or loses following adjudication on the merits), the unpaid worker must then record the lien to enforce it. For real property, the worker must file a Wage Lien Statement with the Circuit Court where the to-be-liened property is based. The Wage Lien Statement must, at minimum, include a description of the property, the name of the property owner, and the monetary amount of the lien. COMAR 09.12.39.04. For personal property (vehicles, equipment, etc.), the worker should record a filing statement with the Maryland State Department of Assessments and Taxation (SDAT), containing the same information as that required for real property.
Ideally, the employer will seek to settle the case when it receives notice of the pending lien. If no settlement can be reached to clear the lien from the property, the employer must clear the lien before the property can be sold or transferred. In practice, such a limitation may only be enforceable on real property or vehicles owned by the employer. It may be nearly impossible to prevent or revoke the sale of other personal property lacking an enforceable title system.
The statute does, however, permit execution on an established lien “in the same manner as any other judgment under State law.” Md. Code Ann. Labor & Empl. § 3-1106(a). State law does permit sale of property under post-judgment levy and other remedies. Md. Code Ann. Cts. & Jud. Proc. § 2-644. Such a forced sale has not yet been tested, and attempting it may require significant up-front expense.
In addition to the private cause of action afforded employees under both of Maryland’s wage statutes, complaints for violations of the state minimum wage and wage payment laws may be submitted to the Maryland Division of Labor and Industry, Employment Standards Division at 410-767-2357; Monday-Friday, 8 a.m.-5 p.m. The division suggests, but does not require, that the employee send a demand letter to the employer prior to filing of a complaint with the agency. The Maryland Wage Complaint Form, to be sent to the agency, may be found in Spanish and English at http://www.dllr.state.md.us/labor/wages/essclaimform.shtml. Generally, the Division of Labor & Industry will not investigate claims of less than $200, and focuses much of its efforts on contractors working under state construction and service contracts.
Correspondence may be sent to 1100 North Eutaw St., Room 607, Baltimore, MD 21201. The division will send the employee a claim form to be completed and returned. Upon receipt of a claim form, the Employment Standards Division will assign an investigator to the case and seek to resolve the claim for unpaid wages with the employer. If these efforts fail, the case may be referred to the Attorney General’s office for filing of a lawsuit on behalf of the employee.
This office is understaffed. The office strongly prefers that complainants attempt a demand letter before filing a claim. If a complainant can secure private counsel, the agency will generally stop its investigation.
Complaints of overtime violations and federal wage and hour law violations should be submitted to the U.S. Department of Labor Baltimore District Office Wage and Hour Division at 1-866-487-9243 or (410) 962-4984. Because the federal standards are more comprehensive and protective than the state’s standards, DLLR refers persons complaining of overtime violations to the federal agency.
Criminal Complaint for Theft of Services
Another possible avenue of relief for an employee who has not received earned compensation within the legally mandated time frame is the filing of a criminal charge under the Maryland Theft of Services statute. See Md. Crim. Law, § 7-104(d). This statute makes it a crime to obtain compensable services of another “by deception.” This crime is a felony when value of the services involved are worth $500 or more. It carries a potential penalty of up to 15 years imprisonment, a fine not exceeding $25,000, or both, and orders of restitution.
Bad Check Relief
In some instances employees with unpaid wage claims will have been issued checks with insufficient funds by their employer. In such instances, in addition to remedies available through the wage payment (and wage and hour laws), the employee may have a remedy under Maryland’s “Bad Check” law. See Md. Code, Comm. Law Art., §§ 15-801–4. Under this statute, when the maker of a bad check does not remedy the bounced check within 10 days after the bad check has been “dishonored,” the holder of the bad check may send a written notice of dishonor to the maker and demand payment for the face amount of the check and a collection fee of up to $35. After 30 days from the date the written notice of dishonor was sent, if the maker of the bad check continues to fail to make good on the failed check, the holder may be entitled to additional damages for an amount up to two times the amount of the check, but not in excess of $1,000. The written notice of dishonor shall be sent by mail to the last known address of the maker, and must substantially comply with the form prescribed by § 15-803(a) of the Commercial Law Article.
Under Maryland’s mechanics’ lien statute, Maryland Code Ann. Real Property § 9-101 et seq., all new private construction projects and projects in which existing structures are renovated to the extent of 15% or more of their value are usually subject to attachment of a mechanics lien to cover debts incurred by subcontractors, including individual laborers working for subcontractors, for work performed (and materials provided) to the construction project. This is a relatively underutilized tool for recovering unpaid wages and is likely to be particularly effective on prominent construction projects.
For a laborer to obtain a mechanics’ lien, he or she must give written notice of an intention to claim a lien to the owner of the property on which the work was performed. This notice must be provided within 120 days after performance of the work. (Each paycheck is a separate occurrence of debt. The 120 days runs against each pay period, including the first workweek, and does not run from the end of the project.) The written notice must be in the form set out in the Mechanics Lien statute (§ 9-104) and needs either to be hand-delivered to the owner of the property or sent by registered or certified mail, return receipt requested.
Section 9-104 provides the following approved language:
Notice to Owner or Owner’s Agent of
Intention to Claim a Lien
____________________ (Subcontractor) did work or furnished material for or about the building generally designated or briefly described as
The total amount earned under the subcontractor’s undertaking to the date hereof is $ ……… of which $ ……… is due and unpaid as of the date hereof. The work done or materials provided under the subcontract were as follows: (insert brief description of the work done and materials furnished, the time when the work was done or the materials furnished, and the name of the person for whom the work was done or to whom the materials were furnished).
I do solemnly declare and affirm under the penalties of perjury that the contents of the foregoing notice are true to the best of the affiant’s knowledge, information, and belief.
on behalf of
(Insert if subcontractor is not an individual)
After notice has been properly given and if payment has not been made, the contractor or employee must file a petition in the Circuit Court in that county where the real property at issue is located. The petition must be filed within 180 days after completion of the performance of work (or the furnishing the materials). The court will then order the property owner to show cause why the mechanics lien should not attach. The court is authorized to enter a final order granting the lien to the petitioner if the owner fails to respond to the show cause order, or fails to show cause why the lien should not attach. An evidentiary hearing will be scheduled if the property owner presents evidence of a legitimate dispute concerning petitioner’s claim to a lien.
Little Miller Act Claims
The Miller Act is a federal statute that requires general contractors to purchase a payment bond on federally funded construction contracts (of $100,000 or greater value) for construction or renovation of public property in lieu of a mechanics lien remedy since such is not available against government property. Many states have passed what are called “Little Miller” acts providing similar requirements and remedies for construction projects on state property. Maryland’s “Little Miller Act” is codified at Md. Code Ann., State Fin. & Procurement § 17-101 et seq. and covers construction projects on state property where the contract is valued at $100,000 or greater. (Sub-state jurisdictions may impose similar requirements for contracts valued between $25,000 and $100,000.)
The contractor is required to provide “payment security” typically in the form of a bond for 50% of the value of the contract. Persons who have supplied labor (“suppliers”) under the project but who have not received their earned wages are entitled to sue for their unpaid wages against the payment security. A supplier who does not have a direct contractual relationship with the contractor (that is, someone who worked for a subcontractor) must give written notice to the contractor by certified mail of his or her intent to sue, within 90 days after furnishing labor or materials to the project. The notice must include detail as to the amount of the debt, the cause of the underlying debt (e.g., unpaid wages for labor performed and on what dates), and the identity of the subcontractor who has failed to compensate the claimant for his or her labor. A supplier who does have a direct relationship with the contractor may file directly without giving notice of the intent to sue. Suit must be filed within one year of when the state accepts the construction project as complete.
The MWHL states that an employer may not discharge an employee because the employee has (1) complained to the employer or the state agency that the employee has not been paid in accordance with the act’s minimum wage and overtime provisions; (2) brought an action under the act; or (3) testified in an action brought under the Act. See Md. Code Ann., Labor & Empl. § 3-428(a)(3). The Maryland Wage Payment and Collection Law does not contain an explicit retaliation provision. Claims under that statute, however, are generally allowed.
 The Maryland Court of Appeals has interpreted this language to mean whether the employer had “acted in good faith” in withholding the wages owed. See Admiral Mortgage v. Cooper, 357 Md. 533, 543 (2000).
Virginia’s workers’ rights law are in constant flux. 2021 advancements in workers’ rights under Gov. Northam’s administration were rolled back in early 2022 under Gov. Youngkin. Manual information is current through December 2022. Practitioners should be aware of the possibility of future changes to Virginia’s workers’ rights protections.
Minimum & Overtime Wage
Prior to May 1, 2021, employers were required to pay each of their employees’ wages at a rate not less than the federal minimum wage of $7.25. 2020 legislative changes to the Virginia Minimum Wage Act put Virginia on the path to gradually increasing the state minimum wage to $15.00 per hour by 2027. Beginning January 1, 2022, employers are required to pay employees wages at a rate not less than the greater of $11.00 per hour or the federal minimum wage. The minimum wage in Virginia will rise to $12.00 per hour from January 1, 2023 until January 1, 2025. The table below shows the rising minimum rates over the next several years. See Va. Code Ann. §40.1-28.10. Virginia adopts the overtime standards of the Fair Labor Standards Act. See Va. Code Ann. §40.1-29.2-3. For overtime claims, workers can pursue claims in state court, under state law, federal law, or both. Id.
|Start Date||End Date||VA Minimum Wage||VA Min. OT Rate|
|Prior to May 1, 2021||$7.50/hour||$11.25/hour|
|May 1, 2021||Jan. 1, 2022||$9.50/hour||$14.25/hour|
|Jan. 1, 2022||Jan. 1, 2023||$11.00/hour||$16.50/hour|
|Jan. 1, 2023||Jan. 1, 2025||$12.00/hour||$18.00/hour|
|Jan. 1, 2025||Jan. 1, 2026||$13.50/hour||$20.25/hour|
|Jan. 1, 2026||Jan. 1, 2027||$15.00/hour||$22.50/hour|
On each regular pay date, employers must provide employees written statements,
such as a paystub, that includes the employer’s name and address; the number of hours worked during the pay period if the employee is paid based on hours worked or paid a salary below the federal overtime exemption threshold; the rate of pay, gross wages earned in the pay period; and the amount and purpose of any deductions. Wage statements must include enough information to enable the employee to determine how their gross and net pay were calculated. See Va. Code Ann. § 40.1-29(c).
There are numerous exceptions to the Virginia Minimum Wage Act, including but not limited to the following:
- Farm laborers and workers;
- Persons acting for an educational, non-profit, religious, or charitable organization where the employee-employer relationship does not exist or where the services are done on a volunteer basis;
- Golf course caddies
- Baby-sitters (for fewer than 10 hours per week)
- Persons working for a summer camp for boys, girls, or both boys and girls;
- Traveling salesmen or outside salesmen working on a commission basis;
- Taxi drivers and operators
- All persons younger than 16, and all persons younger than 18 who are employed by a parent or legal guardian;
- Persons paid pursuant to 29 U.S.C. § 214(c) of the Fair Labor Standards Act as amended;
- Persons confined in any penal, corrective, or admitted to a state hospital or training center operated by the Department of Behavioral Health and Developmental Services.
- Persons who normally work and are paid based on the amount of work done
- Students and apprentices in a bona fide educational or apprenticeship program
- Persons younger than 18 currently enrolled in any secondary school, higher education institution, or trade school and employed 20 hours or less a week
- Persons enrolled full-time in any secondary school, higher education institution or trade school and in a work-study program or its equivalent at the institution where they are enrolled
- Persons participating as an au pair in the U.S. Department of State’s Exchange Visitor Program governed by 22 C.F.R. 62.31
- Persons employed as a temporary foreign worker as governed by 20 C.F.R. Part 655
See Va. Code Ann. §40.1-28.9(B).
Remedies and Penalties
|Practice Tip: Sometimes workers will not know the name or address of their employer, information necessary to write a demand letter or file a complaint. To learn more about how to locate a Virginia employer using online public records, see “Practice Tip: Finding information on an employer” on page 5.|
Employers who “knowingly and intentionally” pay workers less than the required minimum wage are punishable by a fine of at least $10 and not more than $200. See Va. Code Ann. § 40.1-28.11. Additionally, the employer must pay the worker the balance of the unpaid minimum wages, plus interest at eight percent per annum accruing from the date the wages were due to the worker. The court also may require the employer to pay the worker’s reasonable attorneys’ fees. Id. at § 40.1-28.12.
Virginia’s Prevailing Wage Law
Virginia’s prevailing wage laws govern an employee’s rate of pay, benefits, and other remuneration on public contracts for public works for which the state expends more than $250,000. For projects covered by this law, all contractors and subcontractors on the job must pay the prevailing wage rate as determined by the DOLI Commissioner, based on the U.S. Department of Labor’s Davis-Bacon Act Rates, Va. Code Ann. § 40.1-6(6), to all mechanics, laborers, or workers employed, retained, or otherwise hired to perform services in connection with the project. Contractors or subcontractors who pay below the prevailing wage rate will be liable for wages owed plus eight percent interest, and will also be disqualified from bidding on public contracts until full restitution is paid. See Va. Code Ann. § 2.2-4321.3. Current Virginia prevailing wage rates can be found here: WEBSITE-Virginia-Prevailing-Wage-Rates-8.23.2.xlsx (live.com).
Alexandria City’s Living Wage Policy
Alexandria City has a “living wage” ordinance, which requires companies holding service contracts performed for city-owned or city-controlled property to pay workers $15.00/hour. Construction contracts for more than $50,000 that are formally solicited are exempt under the ordinance. All contractors awarded a contract requiring the Living Wage are required to provide quarterly and annual reports of wages paid to the city. If an employee believes he is entitled to the Living Wage and he is not receiving it, the worker should contact the city’s Purchasing Agent. The Purchasing Agent has the authority to terminate the contract and debar the contractor from doing business with the city. For more information, contact the Purchasing Division at (703) 746-4946, at Suite 301, 100 North Pitt St., Alexandria, VA 22314.
Misclassification of Workers
An individual who has not been properly classified as an employee may bring a civil action for damages against his employer for failing to properly classify the employee if the employer had knowledge of the individual’s misclassification. An individual’s representative may bring the action on behalf of the individual. If the court finds that the employer has not properly classified the individual as an employee, the court may award the individual damages in the amount of any wages, salary, employment benefits, including expenses incurred by the employee that would otherwise have been covered by insurance, or other compensation lost to the individual, a reasonable attorney fee, and the costs incurred by the individual in bringing the action. See Va. Code Ann. § 40.1-28.7:7. The statute of limitations for misclassifications is three years. Va. Code Ann. § 8.01-243.
The law also prohibits retaliation against an individual who has reported or “plans to report” a misclassification or is requested or subpoenaed by an appropriate authority regarding a misclassification investigation, hearing, inquiry, or court action. Retaliation claims are enforced by the Commissioner, who may seek reinstatement, lost wages, and a civil penalty equal to lost wages. Va. Code Ann. § 40.1-33.1. There is currently no private right of action for misclassification-related retaliation claims.
Virginia employers are prohibited from discharging or retaliating against employees for inquiring about or discussing the employee’s wages or the wages of another employee. Employers who violate these prohibitions can be subject to a civil penalty not to exceed $100 for each violation. Va. Code Ann. § 40.1-28.7:9.
Wage Payment and Collection Rules
Wages Must Be Paid At Least Twice a Month
Employers must establish regular pay periods for workers, with salaried workers paid at least once a month and workers who are paid on an hourly rate paid at least once every two weeks or twice a month. Students enrolled in a work-study program at a secondary school, trade school, or institution of higher education may be paid once a month at the option of the hiring institution, as may workers with weekly wages of more than 150 percent of Virginia’s average weekly wage, upon agreement by the worker. See Va. Code Ann. § 40.1-29(A). Only executives are exempted from these requirements. Id.
Wages Must Be Paid Quickly After Termination or Quitting
If a worker is terminated or quits, the employer must pay all wages or salary due for work performed up to the termination, on or before the next regular payday, or the day on which the worker would have been paid had employment not been terminated. See Va. Code Ann. § 40.1-29(A).
Vacation Time When Workers Leave Employment
Virginia does not require that employers pay out departing employees for accrued, unused vacation time. However, employers may be required to pay accrued leave where it is part of a contract, or the employer has a policy or practices of doing so. Method of Payment
Wages may be paid in U.S. dollars, by check payable at face value in U.S. dollars, by prepaid debit card, or by direct deposit into an account designated by the worker. See Va. Code Ann. §40.1-29(B).
With the exception of payroll, wage, and withholding taxes, employers may not withhold any part of a worker’s wages without the written and signed consent of the worker. Employers are required to provide workers with a written statement of gross wages earned for any given pay period and the amount and purpose of any deductions from these wages upon the request of the worker. See Va. Code Ann. § 40.1-29(C). Additionally, employers may not require workers to forfeit wages as a condition of employment or the continuance of employment, nor may the employer require a worker to sign an agreement providing for such forfeiture. Id. § 40.1-29(D). (Workers who are considered executive personnel are an exception to this rule). However, wages may include the employer’s reasonable costs of furnishing lodging and/or meals to the worker if such are both customarily provided by the employer and used by the worker. Id. § 40.1-28.9(A).
Employers who violate the Virginia Wage Payment Act are liable for the full amount of wages due to the worker plus interest at eight percent per annum from the date the wages were due, and an additional equal amount as liquidated damages. See Va. Code Ann. § 40.1-29(G). Employers who knowingly withhold wage payments or fail to make timely payments also may be subject to a civil penalty of up to $1,000 for each violation. Id. § 40.1-29(H). For a knowing violation, an employee can recover an amount equal to triple the amount of wages due plus reasonable attorney’s fees and costs. Id. § 40.1-29(J). Employers who willfully violate this law with intent to defraud a worker also are guilty of a misdemeanor for claims less than $10,000, and, for claims of at least $10,000, employers are guilty of a class 6 felony. Id. at 40.1-29(E).
Statute of Limitations
The statute of limitations for a wage payment action is three (3) years. Id. at 40.1-29(L). The filing period for a lawsuit is tolled upon the filing of an administrative complaint until the action is resolved or the complaint is withdrawn, whichever happens first. Id.
It is unlawful for Virginia employers to discharge, discipline, threaten, discriminate
against, or penalize an employee or independent contractor who has reported, or plans to report, an employer for failure to properly classify an individual as an employee or pay required benefits or other contributions, or participated in an investigation, hearing, or inquiry. Employees can file a complaint with the Commissioner of the Department of Labor and Industry, however the anti-retaliation provision does not provide for a private right of action. Potential remedies include: reinstatement, recovery of lost wages, and civil penalties. See Va. Code. Ann. § 40.1-33.1.
Filing a Wage & Hour Claim
Wage and hour claims arising in Virginia may be filed with the Virginia Department of Labor and Industry (DOLI). The DOLI assists in the collection of unpaid wages, but can only collect wages for time worked; they do not collect fringe benefits. For more information, please see the agency website: www.doli.virginia.gov.
Federal wage and hour complaints (such as complaints about overtime violations) in Virginia must be filed with the U.S. Department of Labor, Wage-Hour Division, in the District Office location nearest the worker’s business or job location. Workers in Northern Virginia should file in the Baltimore District Office: 2 Hopkins Plaza, Room 601, Baltimore, MD 21201. Those in Southwestern Virginia should file in the Charleston Area Office: 500 Quarrier St., Ste. 120, Charleston, WV 25301. Complaints in the remainder of the Commonwealth should be filed in the Richmond District Office: 400 N. 8th St., Room 416, Richmond, VA 23219. The Wage and Hour Division also may be reached by phone at 1-866-4-USWAGE.
Wage & Hour Actions in Court
As of July 1, 2020, Virginia employees now have a private right of action to sue their employers directly for nonpayment of wages—as opposed to pursuing wage claims through an administrative claim. See Va. Code Ann. § 40.1-29(J). Employees can file suit individually, jointly, with other aggrieved employees, or on behalf of similarly situated employees as a collective action consistent with the collective action procedures of the Fair Labor Standards Act. There is no requirement to exhaust administrative remedies prior to filing a lawsuit. Remedies include: wages owed, plus liquidated damages, prejudgment interest accruing at an eight percent annual rate from the time the wages were due, reasonable attorneys’ fees, and costs. Id. If the court finds that the employer knowingly failed to pay wages, it will award the employee treble damages. Id.
 The Virginia Employment Commission most recently listed the Average Weekly Wage at $994. See Virginia Employment Commission, Quarterly Census of Employment and Wages, 4th Quarter 2009.
Documentation status is irrelevant to the right to be paid for work performed. In re Reyes, 814 F.2d 168, 170 (5th Cir. 1987) cert denied 487 U.S. 1235, 108 S.Ct. 2901 (1988); Montoya et al. v. S.C.C.P. Painting Contractors, Inc., et al. 530 S.Supp. 2d 746 (D.Md. 2008). Although it is possible that the employer will try to report the worker to the Department of Homeland Security and have the worker deported, immigration laws also provide for fines against employers who hire undocumented workers. This risk on both sides means that many employers who threaten to report workers will not actually follow through on their threats.
Practice Tip: There is no duty to report undocumented persons to the Department of Homeland Security. If a client tells her attorney that she is undocumented, the attorney-client privilege protects the information and the attorney has an ethical obligation to not disclose it to a third party.
Immigration Status is Irrelevant to a Claim for Wages or Damages
Undocumented workers are not barred from recovering unpaid wages under federal or state law, despite the Supreme Court’s holding in Hoffman Plastic Compounds, Inc. v. NLRB, 535 U.S. 137 (2002) (the court held that, in an action under the NLRA, undocumented workers could not recover back pay from employers who fired workers in retaliation for attempting to organize a union). The Hoffman decision did not apply, however, to back pay for work actually performed, and is strictly limited to remedies under the NLRA.
Many lower courts have since explained that Hoffman did not undermine the rights and remedies that undocumented workers have under the FLSA. See Zavala v. Wal-Mart Stores, 393 F. Supp. 2d 295, 321-25 (D.N.J. 2005) (noting that even after Hoffman, the Department of Labor interprets the FLSA to include undocumented workers; distinguishing back pay for work actually performed from the type of back pay at issue in Hoffman; citing the broad definition of “employee” in the FLSA; and noting that enforcing wage and hour laws with regard to undocumented workers is not inconsistent with immigration policy); Singh v. Jutla & C.D. & R’s Oil, Inc., 214 F. Supp. 2d 1056, 1060-62 (N.D. Cal. 2002).
Employers continue to try to argue that undocumented immigrants do not qualify for FLSA protection by virtue of their undocumented status. Once a plaintiff has proven the amount of unpaid wages, the FLSA provides for an award of that sum plus an equal amount in liquidated damages. In Ulin v. Lovell’s Antique Gallery, 2010 WL 3768012 (N.D. Cal. 2010), the defendant employer argued that Hoffman precluded an award of liquidated damages because liquidated damages were “akin to back pay for work not performed.” The court rejected this argument, stating that “liquidated damages are a form of compensation for time worked that cannot otherwise be calculated.”
The bottom line: Employers have to pay employees for work performed and immigration status is irrelevant to that protection.
Advising on and Reducing Risk of Immigration Action
At least one federal court has held that it is illegal under the FLSA to report a worker to the immigration authorities as retaliation for his wage-hour complaint. See e.g., Contreras v. Corinthian Vigor Insurance Brokerage, Inc., 25 F. Supp. 2d 1053, 1056-60 (N.D. Cal. 1998). Attorneys representing undocumented workers also might be able to obtain a protective order to protect information related to the worker’s immigration status. See Rivera v. NIBCO, Inc., 364 F.3d 1057, 1063-64 (9th Cir. 2004) (upholding a protective order as “justified because the substantial and particularized harm of the discovery – the chilling effect that the disclosure of plaintiffs’ immigration status could have upon their ability to effectuate their rights – outweighed NIBCO’s interests in obtaining the information at this early stage in the litigation”).
The D.C. Office of Wage-Hour does not share information with the Department of Homeland Security. The Office of Wage-Hour does not require social security numbers to process a claim or recover wages. The U.S. Department of Labor (DOL) entered into a Memorandum of Understanding with the DHS (formerly INS) to encourage undocumented workers to report workplace abuses. DOL investigators are not supposed to inquire into a worker’s immigration status or to inspect the employer’s immigration status verification procedures when investigating labor standard violations. See BCIS Memorandum of Understanding to Enhance Worksite Enforcement Sanctions and Labor Standards (Nov. 23, 1998) at www.dol.gov.
For more information about the rights and remedies available to undocumented workers under federal and local employment laws, see the Immigration & Employment chapter.
Practice Tip: On court filings and demand letters, it may be advisable for the attorney to use his or her office address as the address for undocumented workers who are their clients, to protect their confidentiality.
Home Health Care Aides
Treatment under Federal Law
In September 2013, the DOL issued new regulations regarding the treatment of home health aides under the FLSA, significantly narrowing the application of the “companionship” exemption. These regulations went into effect on October 13, 2015. Please see previous section regarding Home Care Workers.
This companionship exemption applies to care in private homes, but it does not apply to aides in assisted-living or nursing home facilities. 29 C.F.R. § 552.3.
Treatment under D.C./State Law
D.C.’s living wage law, which requires hourly pay of $16.10 as of July 1, 2022, applies to home health aides employed by a managed-care organization or by a private home. However, the living wage law exempts Medicaid contracts if direct care services are not provided by a home care agency, a community residence facility, or a group home for mentally disabled persons. These provisions have not been fully litigated, however, and so their full application is unclear. 7 DCMR § 1007.
Under Maryland law, home health aides must be paid minimum wage, and most must receive overtime. Md. Code Ann., Labor & Empl. § 3-415. Home health aides working for non-profit organizations are exempt from Maryland’s overtime pay requirement, and those providing on-premises care for the disabled may be paid an overtime premium at 48 – not 40 – hours per week. Id. Under Maryland’s Living Wage Law, although home health aides and other caregivers are not expressly exempted, it is possible that the law may not apply to the employer’s contract with the state, due to the contract’s value or purpose.
Under Virginia law, home health aides are generally exempt from the state’s minimum wage and overtime requirements. Many, if not most, home health aides working in Virginia would be protected by the new federal minimum wage and overtime regulations, however.
For more information on the application of state and federal wage and overtime law to home health aides, visit www.dol.gov.
Employee vs. Independent Contractor
Unscrupulous employers sometimes try to classify their employees as “independent contractors” in order to take advantage of the exemption of independent contractors from minimum wage, overtime pay, and other benefits required for employees. The definition of employee under the FLSA is very broad: an employee is anyone whom an employer “suffers or permits” to work. 29 U.S.C. § 203(g). The law does not define “independent contractor.”
D.C., Maryland, and Virginia have statutes designed to prevent the knowing misclassification of employees as independent contractors. For state-specific information, see the D.C., Maryland, and Virginia sections of this chapter.
In 2022, DOL issued a notice of proposed rulemaking with revised guidelines for determining independent contractors and employees under the FLSA. A final rule is pending. Attorneys should confirm current status DOL guidance on this issue.
The question of whether a worker is an employee or an independent contractor is very fact-specific. There is no single rule or test for determining independent contractor versus employee classification under the FLSA. Several courts use an “economic realities” approach, looking at the employment relationship as a whole, with emphasis on economic realities. See e.g. Rutherford Food Corp. v. McComb, 331 U.S. 722, 730 (1947). How an employer refers to its workers is not a variable in the determination of whether they are employees or independent contractors.
Factors under the test include:
- whether the “employer” has the power to hire and fire the purported contractor;
- whether the employer supervises and controls employee work schedules or conditions of employment;
- whether the worker performs a task integral to the employer’s business;
- whether the employer determines rate and method of payment;
- whether the employer maintains employment records;
- whether the employer owns equipment necessary for the job; and
- the degree of skill required for a job (the more skilled, the more likely someone is an independent contractor).
A worker can also have “joint employers”; that is, two entities that are each his or her employer under the economic realities test, each of which is jointly and severally liable for unpaid wages. See 29 C.F.R. § 791.2. If a worker has joint employers, all his work during the week is considered one job for purposes of minimum wage and overtime.
A test determining joint employment for purposes of the FLSA, which looks at the relationship between the putative employers, not each individual employee and the putative employer, is articulated in Salinas v. Commercial Interiors, Inc., 848 F.3d 125 (4th Cir. 2017) and Hall v. DirectTV LLC, 846 F.3d 757 (4th Cir. 2017). Those decisions look to whether formally or as a matter of practice, the employment of the employee by one employer is not completely disassociated from employment by another employer.
There is also a test for who is a joint employer, which considers:
- whether employers are not completely disassociated with respect to the employment of a particular worker and may be deemed to share control of the employee (29 C.F.R. § 791.2);
- whether the employee’s work simultaneously benefits two or more employers or he regularly works for two or more employers during the same week (29 C.F.R. § 791.2(b));
- whether there is an arrangement between employers to share the worker’s services, for example, to exchange employees (29 C.F.R. § 791.2(b));
- whether one employer acts in interest of other employer in relation to the employee (29 C.F.R. § 791.2(b));
- who owns the property and facilities where the work occurred;
- what is the degree of skill required to perform the job;
- who has made an investment in equipment and facilities;
- whether the nature of the employment is permanent and exclusive;
- the nature and degree of control of the workers;
- the degree of supervision, direct or indirect, of the work;
- who has the power to determine the pay rates or the methods of payment of the workers;
- who has the right, directly or indirectly, to hire, fire or modify the employment conditions of the workers; and
- who prepares payroll and payment of wages.
Horizontal Joint Employment Scenarios:
An employee is employed at two locations of the same restaurant brand. The two locations are operated by separate legal entities (Employers A and B). The same individual is the majority owner of both Employer A and Employer B. The managers at each restaurant share the employee between the locations and jointly coordinate the scheduling of the employee’s hours. The two employers use the same payroll processor to pay the employee, and they share supervisory authority over the employee. These facts are indicative of joint employment between Employers A and B.
In contrast, an employee works at one restaurant (Employer A) in the mornings and at a different restaurant (Employer B) in the afternoons. The owners and managers of each restaurant know that the employee works at both establishments. The establishments do not have an arrangement to share employees or operations, and do not otherwise have any common management or ownership. These facts are not indicative of joint employment between Employers A and B.
Vertical Joint Employment Scenarios:
A laborer is employed by ABC Drywall Company, which is an independent subcontractor on a construction project. ABC Drywall was engaged by the General Contractor to provide drywall labor for the project. ABC Drywall hired and pays the laborer. The General Contractor provides all of the training for the project. The General Contractor also provides the necessary equipment and materials, provides workers’ compensation insurance, and is responsible for the health and safety of the laborer (and all of the workers on the project). The General Contractor reserves the right to remove the laborer from the project, controls the laborer’s schedule, and provides assignments on site, and both ABC Drywall and the General Contractor supervise the laborer. The laborer has been continuously working on the General Contractor’s construction projects, whether through ABC Drywall or another intermediary. These facts are indicative of joint employment of the laborer by the General Contractor.
In contrast, a mechanic is employed by Airy AC & Heating Company. The Company has a short-term contract to test and, if necessary, replace the HVAC systems at Condor Condos. The Company hired and pays the mechanic and directs the work, including setting the mechanic’s hours and timeline for completion of the project. For the duration of the project, the mechanic works at the Condos and checks in with the property manager there every morning, but the Company supervises his work. The Company provides the mechanic’s benefits, including workers’ compensation insurance. The Company also provides the mechanic with all the tools and materials needed to complete the project. The mechanic brings this equipment to the project site. These facts are not indicative of joint employment of the mechanic by the Condos.
Personal Liability for Individual Employers
The D.C. Acts and the FLSA all define “employer” to include individuals, so employees may maintain actions against not only their companies but also sometimes against their employers as individuals. The D.C. Court of Appeals addressed an employer’s individual liability under D.C.’s wage payment law in Sanchez v. Magafan, 892 A.2d 1130, 1131-32 (D.C. 2006). In this case, an employee sued the owner of the restaurant where he worked for failure to pay wages earned under an oral employment agreement. Rejecting the owner’s argument that the restaurant, not the owner himself, was the only “employer” under the Act, the court of appeals reversed the grant of summary judgment. Id. at 1132-34.
Additionally, federal courts of appeals have interpreted the FLSA to provide for the personal liability of individuals who constitute employers, holding individuals liable when an “economic reality” test shows them to have exercised sufficient control to be considered employers. See e.g., Baystate Alternative Staffing, Inc., v. Herman, 163 F.3d 668, 677-78 (1st Cir. 1998) ; U.S. Dep’t of Labor v. Cole Enters., 62 F.3d 775, 778 (6th Cir. 1995) (“A corporate officer who has operational control of the corporation’s covered enterprise is an ‘employer’ under the FLSA.”); Carter v. Dutchess Community College, 735 F.2d 8, 12 (2d Cir. 1984) (“[To] determine[e] whether an employment relationship exists for purposes of the FLSA, [courts] must evaluate the ‘economic reality’ of the relationship.”).
Under the economic reality test, the relevant factors that tend to demonstrate that an individual is an employer include the power to hire and fire the employees; control over the schedules or conditions of employment, rates of pay and method of payment, and other significant functions of business; a significant ownership interest in the corporation; and maintenance of the employment records. Cole Enters., 62 F.3d at 778; Carter, 735 F.2d at 12; see also Herman v. RSR Sec. Servs. Ltd., 172 F.3d 132 (2d Cir. 1999).
Practice Tip: Whenever possible, name individuals as defendants in addition to the corporate entity. Establishing liability of individuals and the entity increases the chances of collecting on a judgment, and also increases the pressure on the defendants to settle the case.
Collecting a Judgment & the Bankrupt Employer
In D.C. Superior Court (civil division or small claims), there is a special procedure to get information about a defendant’s ability to pay. Under D.C. Code § 16-3908 and Small Claims Rule 18, when a judgment is entered in a wage matter, the worker can file a motion asking the Court to order the defendant to appear for oral examination under oath as to his financial status and ability to pay the judgment. This can be done as often as once a week for four weeks. After the oral examination, the judge can issue supplementary orders “as seems just and proper” to make sure the judgment is paid “upon reasonable terms.” Whether or not the defendant appears for the oral examination, the plaintiff can attempt to collect through wage garnishment, attachment of a bank account (examine the employer’s pay checks for account information), and liens on real property.
If an employer has filed for bankruptcy, all secured debts of that employer are paid first. After all secured claims are paid, priority goes first to unsecured claims for domestic support obligations, then to certain administrative expenses owed to trustees, and then to “wages, salaries, or commissions, including vacation, severance, and sick leave pay earned by an individual” within the 180 days before the filing of the bankruptcy petition (capped at $10,000 for each individual or corporation to whom pay is owed). See 11 U.S.C. § 507(a). Wages are entitled to priority of payment over contributions to employee benefit plans, unsecured creditors, and taxes. Id. While this is a fairly high priority level, it is important to remember that because secured claims get paid first, there might not be anything left to pay for wages. The employee will have to file a “Proof of Claim” (Form B10) in the bankruptcy proceeding to recover unpaid wages earned prior to the filing of the bankruptcy proceeding. For wages earned after the filing of the bankruptcy petition, the employee will have to file a “Request for Administrative Expenses” pursuant to 11 U.S.C. § 503.
Employers sometimes issue bad checks to their workers. Under D.C. Code § 22-1510, it is illegal to write a check “with intent to defraud” knowing that the bank account does not have sufficient funds. If the check amount is $1,000 or more, it is a felony punishable by a $3,000 fine and three years in jail. Writing a bad check for an amount less than $100 is a misdemeanor, punishable by a $1,000 fine and 180 days in jail.
In Virginia, an employer who knowingly writes a bad check of $1,000 or more to an employee is guilty of a felony. See Va. Code Ann. § 18.2-182. The employer is guilty of a Class 1 misdemeanor if the employer knowingly writes a bad check of less than $1,000 to an employee. Id. at § 18.2-182. If the employee is not paid within 30 days of making a written demand, the employer may also be liable for punitive damages up to $250. Id. at §§ 8.01-27.1 to -27.2.
Note: “Intent to defraud” is easily established when the check bounces because of insufficient funds, the employer is notified of the insufficient funds, and the employer does not pay the required amount within five days. Id.
Practice Tip: When a worker receives a bad check, immediately send a letter to the employer certified, return receipt requested, notifying the employer of the bad check and requesting payment in five days. Cite the criminal code and penalties listed above. If payment is not made in five days, consider counseling the worker to file a police report at any police station. For D.C., call 202-727-1010 to find the location of police stations.
There are two types of garnishment situations that commonly arise. In one instance, an employer will garnish wages that it believes the employee owes to the employer (e.g., as a result of breakage). In the second instance, the employer will garnish wages that the employee may owe to a third party (e.g., child support).
In the case of garnishment for the benefit of a third-party creditor, employers are prohibited from deducting from an employee’s wages unless the alleged debt has been properly reduced to a court judgment and wage garnishment as described in D.C. Code § 16-572. See D.C. Code § 16-583 (except as provided in the District of Columbia Child Support Enforcement Amendment Act of 1985 or as provided in the D.C. Code, section 16-916, before entry of a judgment in an action against a debtor, the creditor may not obtain an interest in any property of the debtor by garnishment proceedings). It is not clear whether Section 16-572 requires an employer to seek an order before withholding wages from an employee for breakages or other debts that the employee may owe to her employer.
Both D.C. and federal law limit the amount that can be garnished when garnishment is proper. Under both D.C. and federal law, the maximum garnishment is 25% of disposable wages for the week in question, or the amount “by which [the employee’s] disposable wages for that week exceed 30 times the federal minimum hourly wage,” whichever is less.15 U.S.C. § 1673(a); D.C. Code § 16-572. Only one attachment upon the wages of a judgment debtor can be made at a time. D.C. Code § 16-572. D.C. Code § 1-629.03 and § 1-629.04 cover debt collection from D.C. government employees for debts to the D.C. government.
D.C. law does not contain any exceptions to the limitations set forth in Section 16-572; however, the federal provisions do contain several exceptions. In the case of an order for the support of another person (e.g., child support, alimony), up to 50 or 60% of disposable wages can be garnished. 15 U.S.C. § 1673(b). Although federal law allows for garnishing these amounts, employers in the District of Columbia could still violate D.C. law for excessive garnishment, as the federal law does not displace more generous state laws. 15 U.S.C. § 1677; see also 28 U.S.C. § 3101 et seq. for federal procedures for collecting a debt (i.e., debts owed to the federal government).
Assistance in collecting judgments in Maryland is available from the manual published by the Public Justice Center. http://www.publicjustice.org/uploads/file/pdf/MD_Wage_Collection_Judgment_Enforcement_Guide_PJC_FINAL.pdf
Maryland law ensures that deductions from wages may only be made for certain reasons. See Md. Code Ann., Labor & Empl. § 3-503. Virginia protects against excessive garnishments. See Va. Code Ann. § 34.29. For more information about wage garnishment in Virginia, consult Legal Services of Northern Virginia’s website: www.lsnv.org.
An employer may not terminate a worker because his or her wages are being garnished. See 15 U.S.C § 1674. There is, however, no private cause of action by which an employee may challenge a wrongful termination under this section. See LeVick v. Skaggs Cos,. 701 F.2d 777 (9th Cir. 1983); Smith v. Cotton Bros. Baking Co., 609 F.2d 738 (5th Cir. 1980). Virginia law also protects against termination based on an employee’s wage garnishment. See Va. Code Ann. § 34.29(f).
A combination of federal and D.C. laws limit the amount and types of work that minors can perform. See D.C. Code §§ 32-201 et seq., 29 C.F.R. § 570 et seq. It is unlawful to employ children 13 and younger, except in limited circumstances. See D.C. Code §§ 32-201. Workers aged 14 and 15 have limits on hours of work and conditions under which they can work. They may only be employed outside of school hours; when school is not in session, the maximum workweek is 40 hours, with no more than eight hours per day. See 29 C.F.R. § 570.35. When school is in session, children can work no more than 18 hours per week, with a maximum of three hours per day. Id. Work must occur between 7 a.m. and 7 p.m. except in the summer, where children 14-15 can work until 9 p.m. Id. Children 16 and 17 years old cannot work in certain industries. Children 16 and 17 can work only between 6 a.m. and 10 p.m., no more than 48 hours per week, no more than eight hours a day, and no more than six consecutive days. See D.C. Code § 32-202. For those 18 and older, no restrictions apply.
A combination of federal and Maryland laws limit the amount and types of work that minors can perform. See Md. Code Ann., Labor & Empl. § 3-201 et seq.; 29 C.F.R. § 570 et seq. Generally, the most protective standards, whether state or federal, are those that govern. It is unlawful to employ children 13 and younger, except in limited circumstances. See Md. Code Ann., Labor & Empl. § 3-203. Minors between the ages of 14 and 17 may only work under certain restrictions, and then, only with a work permit. The Maryland Division of Labor and Industry explains Maryland standards:
“Minors 14 and 15 years of age may not be employed or permitted to:
- work more than four hours on any day when school is in session
- work more than eight hours a day on any day when school is not in session
- work more than 23 hours in any week when school is in session
- work more than 40 hours in any week when school is not in session
- work before 7 a.m. or after 8 p.m. Minors may work until 9 p.m. from Memorial Day to Labor Day.
- work more than five consecutive hours without a non-working period of at least 30 minutes.”
“Minors 16 and 17 years of age:
- May spend no more than 12 hours in a combination of school hours and work hours each day.
- Must be allowed at least eight consecutive hours of non-work, non-school time in each 24 hour period.
- May not be permitted to work more than five consecutive hours without a non-working period of at least 30 minutes.
Under federal law, youth must be 14 years of age to work in any non-agricultural employment. Fourteen- to 15-year-olds may work subject to the following restrictions:
- during non-school hours;
- a maximum of three hours on school days;
- a maximum of 18 hours during the school week;
- a maximum of eight hours on non-school days;
- a maximum of 40 hours during non-school weeks; and
- between 7 a.m. and 7 p.m. (except from June 1 through Labor Day, when evening hours are extended to 9 p.m.)
There are exceptions for youth who are 14 and 15 years old if they are enrolled in an approved Work Experience and Career Exploration Program (WECEP). Through this program, youth may work up to 23 hours during school weeks and three hours on school days (including during school hours). The FLSA does not limit the number of hours or times of day for workers 16 years and older. However, youth who are 16 and 17 years old cannot work in certain industries considered unsafe for that age group.
For further information on the employment of minors in Maryland, please see the Maryland Division of Labor and Industry, Employment of Minors Fact Sheet, found online at www.dllr.state.md.us. For additional information about employment of minors by employers regulated by the FLSA, please see www.dol.gov. Enforcement of federal child labor laws is handled through the U.S. Department of Labor’s district offices. Issues arising in Maryland are handled by the Baltimore District Office:
Baltimore District Office
U.S. Dept. of Labor
ESA Wage & Hour Division
Room 207 Appraisers Stores Building
103 S. Gay St.
Baltimore, MD 21202-4061
Phone: 1-866-4-USWAGE (1-866-487-9243)
Of course, slavery is illegal. Yet, slavery comes in many guises: for example, workers may be forced into slavery, involuntary servitude, or peonage in private homes as domestic servants, on farms as agricultural labor, or in sweatshops. Others are undocumented workers, trafficked into or within the country and forced into labor in private homes, factories, fields, or in brothels.
The Thirteenth Amendment provides that slavery and involuntary servitude are illegal. Those provisions are also codified at 18 U.S.C. § 1584, which further provides for criminal penalties. The U.S. Code provisions do not specify what constitutes “involuntary servitude,” but that term has been interpreted by the First Circuit to mean that a worker was required to work against his or her will as a result of (1) physical restraint; (2) legal coercion; or (3) plausible threats of physical harm or legal coercion. See United States v. Alzanki, 54 F.3d 994 (1st Cir. 1995). The worker must have a reasonable subjective belief that there was no alternative but to work for the perpetrator. The Supreme Court has stated that threats of deportation could constitute legal coercion. See United States v. Kozminski, 487 U.S. 931 (1988). Mere psychological coercion has been held insufficient to create involuntary servitude. Id. However, the Victims of Trafficking and Violence Protection Act of 2000 addedthe crime of “forced labor” w to to cover cases where people are kept in “involuntary servitude” situations through the use of psychological coercion. Pub. L. No. 106-386, 114 Stat. 1464, § 102(b)(13) & (14) (codified as amended at 22 U.S.C. § 7101(b)(13) & (14) and 18 U.S.C. § 1589. Thus, an individual who “knowingly provides or obtains the labor or services of a person by any one of, or by any combination of . . . (1) by means of forced, threats of force, physical restraint, or threats of physical restraint to that person or another person; (2) by means of serious harm or threats of serious harm to that person or another person; (3) by means of the abuse or threatened abuse of law or the legal process; or (4) by means of any scheme, plan, or pattern intended to cause the person to believe that, if the person did not perform such labor or services, that person or another person would suffer serious harm or physical restraint” can be fined or imprisoned up to 20 years. See 18 U.S.C. § 1589.
Former President Clinton signed the Victims of Trafficking and Violence Protection Act of 2000 into law in October 2000. This law allows individuals who are (1) victim[s] of severe forms of trafficking; (2) physically present in the United States on account of such trafficking; (3) complying with any reasonable request for assistance in investigation or prosecution of acts of trafficking, or have not attained 15 years of age; and, (4) and would suffer extreme hardship involving unusual and severe harm upon removal to apply for a nonimmigrant visa, known as a ‘T’ visa, to remain in the U.S. Victims of Trafficking and Violence Protection Act of 2000 (TVPA), Pub. L. 106-386, 114 Stat. 1464, Sec 107(e)(1)(T)(i)(I)-(IV) (codified at 8 U.S.C. § 1101 (a)(15)(T)) (hereinafter VTVPA; 8 CFR § 214.11(a)); see also 8 C.F.R. § 212.16.).
The National Human Trafficking Hotline connects survivors of sex and labor trafficking with services and support. Toll-free phone and SMS text lines and live online chat function are available 24 hours a day, 7 days a week, 365 days a year in English, Spanish, and more than 200 additional languages through an on-call interpreter. Call: 1-888-373-7888. Text: 233733. Chat: https://humantraffickinghotline.org/chat. Hearing and speech-impaired individuals can contact the Hotline by dialing 711.
If you have a suspected case of sex or labor trafficking, local legal service providers can be found at: https://humantraffickinghotline.org/training-resources/referral-directory.
 Exceptions include newspaper deliverers; actors and performers; children employed by parents for housework or agricultural purposes. Children 10 years or older may be employed outside of school hours in distributing newspapers on fixed routes, but not stuffing (for which the minimum age is 16). Children 12 years or older may sell newspapers on the street. See D.C. Code §§ 32-215 – 32-221.
 Children 14 to 15 cannot work in manufacturing, in hazardous occupations, or on motor vehicles, railroads, trucks, airplanes, boats, pipelines, warehousing or storage, communications or public utilities, or construction. See 29 C.F.R. § 570.33. Office work in any of these industries is acceptable.
 Including working with or manufacturing small arms, ammunition or explosives, operating a motor vehicle or acting as an outside helper, coal mines, logging, bakery machines, paper products and others. See 29 C.F.R. § 570.51 – 570.68.
 Including newspaper delivery; children employed by parents or a person standing in the place of a parent; domestic work in or around a home, caddying on a golf course; instructing on an instructional sailboat; work performed as a counselor or instructor at a Maryland Youth Camp; or work performed for a non-profit organization (under certain conditions).
 Including working with or manufacturing small arms, ammunition or explosives, operating a motor vehicle or acting as an outside helper, coal mines, logging, bakery machines, paper products, and others. See 29 C.F.R. 570.51 through .68.