Damages under the Tennessee Wage Regulation Act and Fair Labor Standards Act
Last week, I discussed a Tennessee employer’s responsibility to provide employees with a bona fide meal break where the employee works six (6) consecutive hours. Within that article, I touched on the significant consequences, including monetary damages, that might befall an employer who fails to abide by the Tennessee Wage Regulation Act and/or the Fair Labor Standards Act. This article will explore those consequences in depth.
First, where an employer has violated the Tennessee Wage Regulation Act, the state law governing wage and hour requirements, an employee’s avenues for relief are limited. The TWRA provides no private right of action to aggrieved employees. See Abadeer v. Tyson Foods, Inc., 975 F.Supp.2d 890 (M.D. Tenn. 2013). In other words, an employee cannot sue an employer for violating the TWRA. Rather, an employee’s method for ensuring an employer is held accountable for a TWRA violation is to file a complaint with the Tennessee Department of Labor and Workforce Development. The DOL then has the option of pursuing civil or criminal penalties against the offending employer. A violation of the TWRA is a Class B misdemeanor, punishable by a fine of not less than one hundred dollars nor more than five hundred dollars. Employers found to have willfully violated the TWRA are also subject to a civil penalty of not less than five hundred dollars nor more than one thousand dollars, at the discretion of the DOL commissioner or the commissioner's designated representative. Each and every infraction under the TWRA constitutes a separate and distinct offense.
In contrast, an employee may pursue court litigation against his or her employer or former employer for a violation of the Fair Labor Standards Act. The employee also has the option of filing a complaint with the DOL, however, such preliminary action is not required. As part of a lawsuit, an employee may request damages under Section 16(b) of the FLSA, including:
- Backpay Damages. Under Section 16(b) of the FLSA, the employer may be required to pay the employee the amount of previously unpaid minimum wage or overtime pay that was not yet paid, i.e., the compensation owed to the employee. To calculate owed overtime, the employer must first determine the employee's "regular rate of pay," that is, how much money the employee makes per hour after considering all compensation provided to the employee in that week, e.g., hourly wages, bonuses, etc. The employer then must determine how many hours the employee worked in excess of forty (40) in the given workweek. The number of hours worked is multiplied by 1.5 times the regular rate of pay to determine owed overtime compensation.
- Liquidated Damages. Where the employer’s violation of the FLSA was intentional, then the employee may receive liquidated, i.e., double, damages. If the employer proves to the court that its failure to pay the appropriate amount of compensation was an act or omission committed in good faith and that the employer had reasonable grounds for believing that its actions were not a violation of FLSA, then the court may use its discretion in deciding whether or not to also award the liquidated damages that are possible pursuant to the statute.
- Attorney’s Fees: The FLSA also permits courts to award a prevailing plaintiff with his or her attorneys’ fees by the Court.
In addition to the above civil remedies, the FLSA permits courts to impose criminal repercussions on offending employers. Specifically, an employer found to have willfully violated the FLSA may be prosecuted by the government and the violator fined up to $10,000. A second conviction under the FLSA may result in criminal sentences for the responsible parties. Additional violations of the FLSA will result in fines up to $1000 per violation.
Tennessee workers have two years to bring an claim for unpaid wages under the FLSA. This statute of limitation extends to three years where the overtime violation is found to be willful. Any back wages preceding this time period are not recoverable by the employee.
As you can see, failure to appropriately compensate an employee for bona fide meal periods, among other things, can lead to significant legal liability. One of the best ways to avoid inadvertent violations of the FLSA and/or TWRA, as an employer, is to audit your pay practices to ensure maximum compliance with state and federal law. If you are interested in conducting such an audit, contact our office to learn more. If you are an employee with concerns regarding your employer's pay practices, you too may contact us with additional questions or concerns.