Paying Wages by Pennies is Costly

By Elizabeth Torphy-Donzella - Shawe Rosental LLP

June 22, 2023

We have a “shot and chaser” for you today.

“Shot” is our 2022 blog about an employee whose spiteful employer paid him in pennies – 91,500 of them, covered in oil – to remit his weekly wage of $915. The employee complained to the U.S. Department of Labor.

“Chaser” is today’s blog about the consent judgment between said spiteful (now chastened) employer and the DOL after the DOL’s investigation of that complaint culminated in a lawsuit in Federal court. According to a DOL News Brief announcing the outcome, the employer was found to have engaged in unlawful retaliation by paying the employee in oil-slicked pennies (and defamed the employee to boot). But that’s not all. The DOL investigation revealed that the employer “violated the FLSA’s overtime provisions by paying the complainant and other employees straight-time rates for all hours worked, including for hours over 40 in a workweek when an overtime rate-of-pay was legally required.”

See, when employers find themselves in the DOL’s cross hairs, the risks are not simply that the complainant’s claim will be validated. Instead, the employer could well find itself in this company’s shoes, liable for other violations that the DOL discovers. That’s why our pitiful employer was ordered by the court to pay $39,934 to the penny-paid employee and eight coworkers, plus an equal amount to them in liquidated damages.

In other words, $915 dollars of a vengeful wage payment resulted in roughly $40,000 of liability. Also, I am sure, the employer incurred tens of thousands of dollars paying lawyers to deal with the DOL and its follow-on lawsuit before throwing in the towel and consenting to judgment. (We lawyers don’t work for pennies.)

The moral of the story is, keep your emotions in check employers (and follow the law). You can be too cute by half.

A penny for your thoughts?

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