Understanding Unpaid Wage Claims in Maryland

“The Wage Act is a remedial statute that protects employees from wrongful withholding of wages by employers upon termination.” (See PlayMark Inc. v. Perret, No. 0091-2020, at *19 (Md. Ct. Spec. App. Jan. 28, 2022); Stevenson v. Branch Banking & Trust Corp. (2004) 159 Md.App. 620, 635.)

“As such, it is to be construed liberally in favor of the employee.” (See id; Peters v. Early Healthcare Giver, Inc. (2014) 439 Md. 646, 661.)

“The Wage Act requires that each employer shall pay an employee ... all wages due for work that the employee performed before the termination of employment, on or before the day on which the employee would have been paid the wages if the employment had not been terminated.” (See id; LE § 3-505(a).)

“Thus, what is due an employee who terminates employment with an employer are wages for work performed before termination, or all compensation due to the employee as a result of employment including any remuneration, other than salary, that is promised in exchange for the employee's work.” (See Whiting-Turner Contracting Co. v. Fitzpatrick (2001) 366 Md. 295, 303.)

Definition of “Wage” Under the Wage Act

“The term ‘wage’ is broadly defined in the Wage Act as all compensation that is due to an employee for employment [including] (i) a bonus; (ii) a commission; (iii) a fringe benefit; (iv) overtime wages; or (v) any other remuneration promised for service.” (See PlayMark Inc. v. Perret, No. 0091-2020, at *19-20 (Md. Ct. Spec. App. Jan. 28, 2022); LE § 3-501(c).)

“Two leading cases from the Court of Appeals establish the general framework that to constitute a ‘wage’ recoverable under the Wage Act, payments must both be promised in exchange for employment and fully earned before employment ends.” (See id; Whiting-Turner Contracting Co. v. Fitzpatrick (2001) 366 Md. 295, 306 [explaining that the statute should be read to count a payment as a wage only when it has been promised as part of the compensation for employment]; Medex v. Mccabe (2002) 372 Md. 28, 41 [an employee's right to compensation vests when the employee does everything required to earn the wages].)

Bona Wage Fide Dispute Rule

“Section 3-505 governs the civil remedy upon violation of the Act by an employer. It states, in relevant part, as follows:

(b) Award. — (1) If, in an action under subsection (a) of this section, a court finds that an employer withheld the wage of an employee in violation of this subtitle and not as a result of a bona fide dispute, the court may award the employee an amount not exceeding 3 times the wage, and reasonable counsel fees and other costs.”

(See Medex v. Mccabe (2002) 372 Md. 28, 42-43; § 3-507.1.)

Standard of Review for Unpaid Wage Claims

“Where an order appealed from involves an interpretation and application of Maryland statutory and case law, [we] must determine whether the [circuit court's] conclusions are 'legally correct' under a de novo standard of review. Additionally, the interpretation of contracts is a question of law for the court.” (See Blood v. Columbus US, Inc., No. 1962, at *8-9 (Md. Ct. Spec. App. Apr. 30, 2018); Walter v. Gunter (2002) 367 Md. 386, 392; Calomiris v. Woods (1999) 353 Md. 425, 434.)

Burden of Proof for Unpaid Wage Claims

“L&E § 3-1103(d)(2) provides that, the circuit court shall determine whether to issue an order establishing a lien for unpaid wages . . . based on a preponderance of the evidence in which the employee has the burden of proof to establish the lien for unpaid wages.” (See Blood v. Columbus US, Inc., No. 1962, at *8 n.12 (Md. Ct. Spec. App. Apr. 30, 2018).)

Legal Precedents and Case Law on Unpaid Wage Claims

It is well settled that “Maryland has two wage enforcement laws: the WHL and the WPCL. The WHL aims to protect Maryland workers by providing a minimum wage standard. The WPCL requires an employer to pay its employees regularly while employed, and in full at the termination of employment. Read together, these statutes allow employees to recover unlawfully withheld wages from their employer, and provide an employee with two avenues to do so.” (See Peters v. Early Healthcare Giver, Inc. (2014) 97 A.3d 621, 624-25; LE § 3–402; LE §§ 3–502, 3–505; Battaglia v. Clinical Perfusionists, Inc. (1995) 338 Md. 352, 364, 658 A.2d 680, 686 [the WPCL's principal purpose was to provide a vehicle for employees to collect, and an incentive for employers to pay, back wages].)

It is also well settled that “under the Wage Payment and Collection Law (“WPCL”), Md.Code (1991, 2008 Repl.Vol., 2013 Cum.Supp.), § 3–501 et seq. of the Labor and Employment Article (“LE”), [t]he plain language of the statute dictates that the total amount of damages an employee may recover under the WPCL is three times the unpaid wage.” (See Peters v. Early Healthcare Giver, Inc. (2014) 97 A.3d 621, 633.)

Current as of April 01, 2024 | Updated by Trellis Law Content Team

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