Wage and Hour Law Update

Thursday, June 4, 2015

On May 5, 2015, Governor Pence signed into law House bill 1469 which becomes effective Jul 1, 2015 and amends portions of the current Wage and Hour law. This new law decreases an employer’s exposure for violations of the wage law and expands allowable deductions.

Previously, an employer that does not pay an employee within 10 days after the end of the pay period was subject to automatic liquidated damages of 10% each day that he amount remained due up to double the amount of unpaid wages. This was in addition to the actually unpaid wages due to the employee. Thus, the employee could receive triple what was owed, plus attorney’s fees and court costs. Under the new law, an employer is only liable for the amount of unpaid wages due and reasonable attorney’s fees and court costs. If the court determines that the employer acted in bad faith, the court may subject he employer to liquidated damages in an amount double the amount of unpaid wages owed. Bad faith is not defined but is usually interpreted by courts to mean some intentional/willful or grossly negligent act and not an innocent mistake. Thus, the exposure to employers has been greatly reduced.

Additionally, an employer may now deduct additional wages from an employee’s paycheck for the following:

· Purchase price of merchandise, goods, or food offered by the employer and sold to the employee, for the employee’s benefit, use, or consumption, and the written request of the employee.

· The purchase of uniforms and equipment necessary to fulfill the duties of employment as long as the amount does not exceed the lesser of:

o $2,500 per year or

o 5% of the employee’s weekly disposable income as defined by statute

· Reimbursement for education or employee skill straining as long as not offered pursuant to an economic development incentive for any federal, state, or local program.

· An advance for payroll or vacation pay.

The new law also states that any interest charged on amounts loaned or advanced to the employee may not exceed prime plus 4%.

If you have any questions on how this may impact your business or payroll, please contact Lin Shannon at hls@fine-hatfield.com or Andrew Skinner at aes@fine-hatfield.com.