Tuesday, November 27, 2012

Individual Owners of Corporations May Be Liable Under the Maryland Wage Payment and Collection Law

  The Maryland Wage Payment and Collection Law provides that employers must pay employees their earned wages on time.  An employer that violates the Law may be liable for triple damages and attorney's fees.   Lawyers have long debated whether a company's owners individually can be held responsible for failing to pay wages (in addition to holding the corporation responsible).  A recent decision holds that individuals can be liable if they control the employee's work.  Control can mean the power to hire and fire, set wages and schedules, and maintain records.  Hence, company-owners cannot hide behind a corporation when they control their employees but fail to pay them.  

Maryland's intermediate appellate court issued the decision.  I suspect there will be continued debate about the issue, which may end up before the Maryland Court of Appeals.    

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