TSLF Employment Blog

DMV Survey Series: Wage Theft Edition

*In this series, the author will explore the differences in specific areas of the law between D.C., Maryland, and Virginia, and hopefully answer the age-old question: which state is best for employees? Please remember that this blog post, like all of our posts, offers general information and is NOT legal advice.

Upon reading this title, your first question probably is not “what is wage theft?” and that’s because it sounds self-explanatory. (The basic answer is: your employer owes you money that you’ve earned for work performed and then refuses to pay you.) But it’s not so straightforward when you get into the weeds of what exactly counts as a “wage”? Does it include paid vacation time? Does it include commissions? Or severance pay? The answer to all of these questions is (a lawyer’s favorite answer): it depends. It depends on the jurisdiction (or state) and it depends on what is in your employment contract, employee handbook or other documentation that outlines what you’re entitled to as an employee of Company X. What counts as a wage is also informed by what your employer owes you in payment. For example, some courts ask: is this payment mandatory under your contract if you fulfill your duties or is it a “discretionary payment”? In other words, if you are a commissioned employee, is your commission automatically paid out upon your making a sale in your territory or does your employer have discretion to increase or decrease that payment or deny it altogether? If your employer reserves the right to deny you that commission, then it may not be considered a wage.

With that introduction, lets explore the applicable wage theft laws in D.C., Maryland and Virginia.

The District

The District of Columbia Wage Payment and Collection Law (“WPCL”), can be found at D.C. Code §§ 32-1301 et seq. The statute’s definition of “wages” includes “all monetary compensation” and explicitly covers bonuses, commissions, cash “fringe benefits”, overtime premiums, and any “other remuneration promised or owed” pursuant to an employment contract or applicable District or federal law.  That broad definition is borne out in some of the District’s case law, where judges have found that in addition to an employee’s regular salary or hourly wage, moving stipends and other relocation expenses can be wages,[1] team-based gainsharing bonuses are wages,[2] and sometimes severance payments might be wages.[3] That said, there are circumstances where bonuses or commissions are found to be “discretionary” and so they may not be wages under the law.[4]  The stand-out provision of DC’s law, is that if the employee prevails and has requested treble damages (or three times the amount owed) the court must award that amount.[5] Attorney’s fee awards are available.

Maryland

The Maryland Wage Payment and Collection Law (MWPCL) can be found at MD Code, Labor and Employment, § 3-501 et seq. and contains a similarly broad definition of wages, like DC’s statute, including bonuses, commissions, fringe benefits, overtime wages, or “any other remuneration promised for service.” The Maryland case law looks similar to that of D.C. in some respects, with judges finding that, in the right circumstances, severance payments can be wages,[6] travel expenses can be wages,[7] and bonuses or incentive payments can be wages.[8] In addition, like in D.C., for knowing violations of the Act where there is no “bona fide dispute” over whether the wages are owed, the employee may be able to collect up to three times the amount of wages owed in damages.[9] Attorney’s fee awards are available under the statute as well.[10]

Virginia

And then there’s Virginia… the state ostensibly for “lovers” that, perhaps appropriately, breaks our little employment law hearts every time with its frequent departure from some of the stronger employee protections available in Maryland and the District (to be discussed in future posts). Though Virginia has had a wage theft statute for some time—the Virginia Wage Payment Act at VA Code § 1-214 et seq.—up until April of 2020, it did not have any meaningful remedy for individual victims of wage theft.[11] However, (drumroll) in April of 2020, Gov. Northam signed into law SB 838/HB123 providing for the first time, an individual cause of action to recover unpaid wages. VA Code § 40.1-29. So now that this glorious provision exists, how does it stack up to the statutes in Maryland and D.C.? Well, Virginia’s statutory definition of wages is nowhere near as explicitly broad and inclusive as that of Maryland or D.C. That said, unpaid commissions and performance-based bonuses can be recovered under the Act. Further, the Act provides for automatic double damages and treble damages for knowing violations. Because of the recent passage of the Act, there’s not much in the way of case law to explore, but at TSLF, we’ll be looking out for and litigating those cases and will update this post once those verdicts are in.

So which State (or District) is the best for employees? On the wage theft front, we have to say that generally speaking, D.C. takes the cake with its mandatory treble damages award if requested and its broadly defined categories of remuneration covered by the statute. Maryland is a close second, and Virginia… well… you get the idea.

———

Author: Nicole Portnov, Esq.*

*Barred in MD and D.C., practicing under the supervision of VA and NY-licensed attorneys.

If you have questions about a specific issue related to wages or employment law, the attorneys at TSLF can help.

[1] Sivaraman v. Guizzetti & Assocs., Ltd., 228 A.3d 1066, 1073 (D.C. 2020); Peck v. SELEX Sys. Integration, Inc., 270 F. Supp. 3d 107, 116 (D.D.C. 2017), aff’d, 895 F.3d 813 (D.C. Cir. 2018).

[2] Molock v. Whole Foods Mkt., Inc., 297 F. Supp. 3d 114, 134 (D.D.C. 2018), aff’d on other grounds sub nom. Molock v. Whole Foods Mkt. Grp., Inc., 952 F.3d 293 (D.C. Cir. 2020).

[3] Strobos v. RxBio, Inc., 251 F. Supp. 3d 221, 239 (D.D.C. 2017).

[4] See e.g., Dorsey v. Jacobson Holman, PLLC, 756 F.Supp.2d 30 (D.D.C. 2010); Skripchenko v. VIRxSYS Corp., No. 13-0004, 2014 WL 4826788 (D. Md. Sept. 26, 2014); Rothberg v. Xerox Corp., No. 12-617, 2016 WL 10953882, at *15–19 (D.D.C. Feb. 3, 2016).

[5] Sivaraman v. Guizzetti & Assocs., Ltd., 228 A.3d 1066, 1072 (D.C. 2020) (finding that treble damages are mandatory, not discretionary, if requested.”)

[6] See e.g., Mazer v. Safeway, Inc., 398 F. Supp. 2d 412, 424 (D. Md. 2005)

[7] Roley v. Nat’l Pro. Exch., Inc., 474 F. Supp. 3d 708, 720 (D. Md. 2020), aff’d, 860 F. App’x 264 (4th Cir. 2021).

[8] Medex v. McCabe, 372 Md. 28, 36, 811 A.2d 297, 302 (2002); but see Whiting-Turner Contracting Co. v. Fitzpatrick, 366 Md. 295, 305, 783 A.2d 667, 672 (2001).

[9] Peters v. Early Healthcare Giver, Inc., 439 Md. 646, 664, 97 A.3d 621, 631 (2014).

[10] Pinnacle Grp., LLC v. Kelly, 235 Md. App. 436, 178 A.3d 581 (2018)

[11] Prior to the 2020 amendments, individual litigants would have had to rely on a common law theory called quantum meruit to recover unpaid wages from an employer. Mar v. Malveaux, 732 S.E.2d 733, 738–39 (2012).

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