Generally speaking, an employer who either refuses or is unable to pay employee wages faces a serious offence, which is punishable in some cases by jail time, criminal fines and civil litigation. Employers are sometimes protected in cases where the wage is higher than the legal minimum or they are in a legitimate wage dispute with an employee. If the employer fails to pay their employee at least minimum wage, however, they may face criminal prosecution. Additionally, many states require employers to maintain a regular payday, usually at least once a month.
State Employment Laws
State labour laws generally require the payment of wages. This is considered to be an additional protection for employees that allows the state to prosecute employers who fail to to pay their employees according to their contract. For example, in the state of Texas, nonpayment of wages is a felony. In other states, like Oregon, it is considered a misdemeanour. The remedies and penalties for nonpayment differ considerably from state to state. Many states not only prescribe penalties for nonpayment of wages, they also require regular paydays on at least a monthly basis.
Minimum Wage Laws
Nonpayment of wages may also place an employer in violation of minimum wage laws. Failing to pay minimum wage is a serious offence both at the federal and state level. As of February 2011, the minimum wage is £4.70 per hour at the federal level, and many states require a higher minimum wage. The U.S. Department of Labor, Wage and Hour Division, enforces the minimum wage at the federal level. Those who knowingly violate the federal minimum wage law can be brought up on charges for criminal penalties.
The penalties for nonpayment of wages are generally most severe in the cases where nonpayment results in violation of minimum wage law. Under federal employment laws, an employer who intentionally violates the federal minimum wage law can face a criminal fine of up to £6,500 and possible imprisonment. At the state level, other penalties may apply. The state of Oregon classifies nonpayment of wages as a misdemeanour, which is punishable by fines and jail time. In Texas, nonpayment of wages is a third degree felony, which carries a prison sentence of two to 10 years.
In addition to criminal penalties, employees can generally bring lawsuits against their employer to collect unpaid wages and damages. In Oregon, state law explicitly protects the right of unpaid employees to sue their boss. In California, civil juries often have the discretion to award damages to cover the period that employees had to wait for unpaid wages. Federal government contractors may also be pursued for civil penalties or have payments withheld by the their employer for violating prevailing wage laws.