Individual Liability Under the Fair Labor Standards Act

The Fair Labor Standards Act (“FLSA”) is a federal law that governs employment in all private employers and most government employers in all fifty states. In New Jersey, this federal law works in conjunction with the New Jersey Wage and Hour Law. These laws set forth requirements for minimum wages, overtime, pay, maintenance of employee records, and other work-related issues.

In New Jersey, the minimum wage in 2013 was set at $7.25 per hour (the federal minimum for wages). In 2014 that minimum wage in New Jersey will be increased to $8.25 per hour. Therefore, the minimum overtime payment for 2013 is $10.88 per hour and for 2014, it will be $12.38 per hour for hours worked in excess of forty hours per week.

If an employer violates the FLSA, the injured employee may bring an action against the employer for unpaid wages, and may also recover her attorneys fees and legal costs associated with bringing the action. If a court finds that the violation was willful, the employer may have to pay the employee double the wages that the employer wrongfully withheld.

The FLSA defines an “employer” as any person acting directly in the interest of an employer in relation to an employee. The Courts have further defined “employer” very broadly under the FLSA. Indeed, it has been determined that even supervisors may be individually liable under the FLSA if she exercises sufficient control over the company’s operations. Thus, a corporate officer may be jointly and severally liable with the corporation for unpaid wages under the FLSA.

Generally, courts will consider four factors (but may consider other relevant factors as well) in determining whether an individual is an “employer” under the FLSA. This includes the individual’s (1) authority to hire and fire employees, (2) authority to promulgate work rules, assignments, schedules, benefits, pay, and other conditions of employment, (3) involvement in day to day employee supervision and discipline, and (4) control of the employee records, payroll, and taxes.

Therefore, even the members of a limited liability company, who are otherwise protected from liability in most cases under federal and New Jersey law, may be held liable for failure to comply with the FLSA. Indeed, even if a company goes bankrupt under Chapter 7 or Chapter 11, it’s owners or managers may be liable for paying their employees under the FLSA.

If an employee is not receiving the wages she should be paid under the FLSA, she may in many cases file a claim with the United States Department of Labor. She may alternatively, in many cases, file a lawsuit in court. However, once an employee files a lawsuit, she may not also simultaneously file a claim with the Department of Labor. There is a two year statute of limitations on claims under the FLSA, meaning that a person must file suit within two years of the failure to pay minimum wage or overtime by the employer.

McLaughlin & Nardi’s employment attorneys are experienced with employment laws, particularly in relation to overtime and other pay requirements, and can advise both employers and employees of their rights in relation to employment law requirements in New Jersey. To learn more about what we may be able to do to help, please visit our website, or contact one of our New Jersey lawyers by e-mail or telephone at (973) 890-0004.