An employee recently quit his employment with our company and, as he was leaving, he mentioned to a co-worker that he was going to sue for unpaid overtime. We are concerned that we may have misclassified him as “salaried exempt” and owe him overtime pay. How long does he have to file a lawsuit against us for overtime pay?
Under the Fair Labor Standards Act (“FLSA”), an employee must file an action within two (2) years of the accrual of a claim. An unpaid wage claim technically accrues each day the employee is not paid the required wages. That means the employee can recover back wages or overtime for the two year period prior to the date the individual filed the wage complaint in court. 29 U.S.C. §255(a). However, if the violation of the FLSA is found to be “willful,” the statute of limitations (and period of liability) is enlarged to three (3) years. A willful violation is defined as one in which the employer either knew its conduct violated the FLSA or showed “reckless disregard” for whether its actions complied with the FLSA. McLaughlin v. Richland Shoe Co., 486 U.S. 128, 133 (1988). Thus, “willfulness” requires more than mere negligence.
For more information, please contact Mitchell W. Quick, a partner in Michael Best's Labor and Employment Relations Practice Group at 414.225.2755, or by e-mail at email@example.com.