Thursday, June 19, 2014

Maryland Law Increasing Minimum Wage Also Provides for Liquidated (or Double) Damages

    The Federal law governing the minimum wage and overtime is the Fair Labor Standards Act ("FLSA").  Maryland has its own minimum wage and overtime law, called the Maryland Wage and Hour Law ("MWHL").  Under the FLSA, a plaintiff claiming unpaid wages can collect the amount owed plus an equivalent amount as liquidated damages.  The plaintiff thus can collect double damages.  Under the MWHL, a plaintiff could only collect the wages owed (single damages).  As a result, most plaintiffs have historically brought their claims under the FLSA. Most FLSA claims end up in Federal Court.

   That is likely to change.  The law eventually raising Maryland's minimum wage to $10.10 also states that Court can shall award liquidated damages for a violation of the MWHL.  An employer can avoid liquidated damages if it can show it acted in good faith and reasonably believed that the wages paid to the employee were not less than the MWHL requires.  The law takes effect July 1, 2014.  As a result, more overtime and minimum wage cases will end up in Maryland State Courts.

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