Can You Sue Your Employer For Not Paying You?


The Fair Labor Standards Act (FLSA) is the primary federal law that protects a worker’s right to be fully compensated for the work they perform. Whether you’re paid the federal minimum wage or a higher negotiated wage, your employer cannot refuse to pay you. If they do, you have the right to sue for damages.

What is the Fair Labor Standards Act?

The FLSA is a federal law that was passed in 1938 to put a floor on wages, a ceiling on work hours, and abolish child labor abuses. Since it was passed, it has served as the foundation for the minimum wage, overtime wages, employer recordkeeping requirements, and child labor restrictions. The law outlines civil and criminal penalties for employers who violate the FLSA, allows for civil penalties to be levied against employers who willfully or repeatedly break the FLSA, and provides employees the right to take civil action against their employer.

Minimum wage

The federal government currently enforces three minimum wages: $7.25 an hour for businesses, $10.35/hour for federally contracted employees, and $7.25 an hour for tipped employees. States are allowed to impose higher minimum wages, and of course employees are free to negotiate higher wages, but no business is allowed to pay its employees less than the federal minimum wage.

Arizona is one of the 29 states that impose a higher minimum wage for businesses. As of 2018, the state’s minimum wage is $10.50 an hour. According to the schedule in ARS 23-363, the state’s minimum wage will increase to $11 an hour in 2019, and $12 an hour in 2020. Starting in 2021, the state’s minimum wage will continue to increase by the annual increase in the cost of living.

Overtime wages

The FLSA requires employers to pay hourly-employees 1.5x their wages for overtime. In this case, the Arizona and federal law are the same—overtime pay is required anytime an employee works more than 40 hours in a single week. Employers can’t ask hourly employees to work off the clock, nor can they make any implications that employees who put in extra work off the clock are more likely to be promoted.

There are a handful of states that offer stricter guidelines on overtime pay. For example, employees in California who work more than 8 hours in a single day are due standard overtime pay, and employees who work more than 12 hours in a single day are owed double their standard wage.

Can an employer cut your pay?

Employers have the right to cut employees’ pay under two conditions. First, the cut can’t result in the employee receiving less than the minimum wage. There are circumstances where an employer is able to make legal deductions from an employee’s pay (we’ll discuss that in a bit), but it’s always illegal if the cuts result in the employee’s hourly rate dropping below the minimum wage.

Second, pay cuts can never come as a surprise. In order for a reduction in wages to be legal, the employee needs to receive advance notice and agree to the lower wage. That said, while the employee needs to consent to the pay cut, it’s not like the employee can deny the pay cut and continue to work at the higher pay rate. Every state except for Montana is an at-will employment state, and the only way an employee can disagree with a pay cut is to quit.

Can an employer deduct funds from your paycheck?

Employers are allowed to deduct certain business-related expenses from employees’ paychecks. Common examples include deducting funds for damaged property, stolen property, and drawer shortages. Your employer should notify you before making these deductions, and allow you the chance to exonerate yourself if you’re not at fault for the damaged or stolen property.

Can an employer withhold your final paycheck?

When you quit your job, your employer is obligated to pay your final paycheck no later than the next regular payday. If you are laid off or fired from your job, your employer needs to deliver your final paycheck within seven days or on the next scheduled payday, whichever is sooner.

The only circumstances where an employer is allowed to withhold part of a final paycheck is when there is a reasonable good faith dispute over the wages due. For example, some employees who require state or federal licensing are required to repay the licensing fees that the employer originally covered if they quit in less than 120 days. Another example would be when an employer has good reason to believe that the employee damaged property, stole property, or owes the company money for improperly used business assets (i.e. using a business charge card for personal expenses). In these cases, the employer is only allowed to withhold the portion of the final paycheck that correlates with the disputed charges.

How to proceed with an unpaid wage claim

There are two ways you can handle an unpaid wage claim—you can file a complaint with the federal or state labor department, or you can file a civil suit against the employer. Filing a formal complaint is usually the preferred method when your employer owes you less than $3,500 in damages (that’s the minimum for small claims court in Arizona). If your employer owes you a substantial sum, or if there are other employees who can join together for a class action lawsuit, you may wish to consider taking legal action.

If you choose to file a formal complaint, you can choose to file with a federal or state agency. The federal agency that’s tasked with enforcing wage laws is the Department of Labor’s Wage and Hours Division (WHD). The state agency responsible for enforcing wage laws in Arizona is the Industrial Commission of Arizona’s Labor Department.

Should you decide to pursue legal action, it’s always best to consult with an attorney. An experienced employment law attorney can assess your case, calculate the damages that you’re owed, and advise you on the best path. ARS 23-355 allows employees to receive triple their unpaid wages in civil actions, so you could receive considerably more in damages by filing a civil suit.

Call our Employment Law team at (480) 464-1111 to discuss your case today.

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