The department of Labor’s Wage and Hour Division (WHD) is responsible for enforcing the Fair Labor Standards Act (FLSA). The department also provides information to workers who are trying to collect unpaid wages from their employers. If you are not sure whether you were paid correctly, you should first look at the “Wage and Hour Fact Sheets” that have been published by the Unemployment and Wages Claim Project. These fact sheets should help you to determine whether or not you are owed wages and, if so, how much you can recover. If you determine that you have not been paid correctly, you are ready to take action against your employer. Follow the following steps to recover your unpaid wages:
Calculate a claim
The information contained in the Wage and Hour Fact Sheet should help you figure out how much you are owed. The Labor Commissioner will often ask you to submit a worksheet with your claim showing how you calculated the money you are owed. Try your best to complete this worksheet as accurately as you can.
Demand payment before filing a claim
Once you have determined that you are owed wages, it is normally best to try and recover them without filing a claim against your employer. The best way to demand your wages is to send your employer a demand letter, which is a simple letter explaining that you are owed money and what you want to collect. Your demand letter should notify your employer that you are requesting unpaid wages. The letter should include your best estimate of the amount of money you are owed, the type(s) of wages you are claiming, and instructions for payment. Before you send any letter to your employer, make a copy of the signed letter for your records.
File a wage claim
If your employer refuses to pay your wages, even after you have sent a demand letter, you can take a legal action against them to collect those unpaid wages. You can take a legal action in either two ways:
- You can file a lawsuit in court
- You can file a claim with the Labor Commissioner
If your wage claim is for less than $5,000, you can choose to go to either Small Claims Court or the Labor Commissioner. The Labor Commissioner’s process may take a little longer than Small Claims Court’s. If your claim is for more than $5,000, you can still choose to file a lawsuit or go to the Labor Commissioner. However, if you choose to file a lawsuit, you have to file in large state court, known as Superior Court.
You can only claim unpaid wages for a certain amount of time. The specific time limit that applies to you will depend on what kind of wages are you trying to collect. These time limits are calculated back from the day you file a claim for wages with the Labor Commissioner or court.
If you are interested only in obtaining your wages, the fact that your employer also may have to pay penalties may be a stronger bargaining point for you. You can, for example, offer to settle for amount of back wages, and that you’ll give up some or even all of the penalties that the Labor Commissioner or court would award you if you win.
The decision in your case does not become final until after the deadline to appeal. After you and your employer receive the decision of the Labor Commissioner, you each have 10 days from the date you receive decision (or 15 days from the date of mailing) to file an appeal. If neither side files an appeal within that time, the decision is final and becomes as enforceable as any other court judgment.
If either side appeals the decision, the Labor Commissioner will not hear the case again. Instead, your case will be filed in the local state Superior Court. The court will hear the case without looking at the decision of the Labor Commissioner. You and your employer will have to present your evidence and testimony all over again.
Paying income tax
The final point to remember is that any money (unpaid wages) you receive from your claim, whether you get it through settlement or judgment, is taxable income. Even if your employer does not make the correct deductions (also called withholdings), you have to pay taxes.
If you feel you have questions, take our quick questionnaire to determine your eligibility for benefits.