The federal Fair Labor Standards Act (FLSA) requires certain employers to pay their workers a minimum wage and to pay nonsalaried employees overtime equivalent to 150 percent of their hourly wage if they work more than 40 hours a week. The law allows employees whose FLSA rights have been violated to recover back wages and, in some cases, damages. But the clock is ticking on their right to do so.
Workers can sue their employer for unpaid wages under FLSA, or the U.S. Department of Labor can sue on their behalf. Either way, the law requires that the lawsuit be filed within two years of an FLSA violation. If the plaintiffs in such a lawsuit can demonstrate that the employer "willfully" violated the law, then the statute of limitations extends to three years. The law also allows employees to recover an amount equal to their unpaid wages as "liquidated damages." However, according to an analysis of workplace law by Beaumont, Texas, lawyer John R. Thomas, it's often necessary to prove that violations were willful before employees can collect such damages.
Courts have ruled that to prove a willful FLSA violation, a plaintiff must show that the employer either knew it was breaking the law or showed "reckless disregard" for its responsibility to know whether it was doing so. This burden of proof can create a loophole of sorts when it comes to recovering back pay and damages. If employees wait more than two years to file a willful-violations lawsuit, a court could find that the employer did in fact violate the law -- but if that court also concludes the violations weren't actually willful, the employees still lose.
Time Runs Out
If the required two- or three-year period passes without employees or the Labor Department suing over an FLSA violation, the workers lose their right to recover any wages that went unpaid because of that violation. In the words of the section of the law that lays out the statute of limitations, "every such action shall be forever barred."
Limits on Lawsuits
If they're reluctant to file a lawsuit over FLSA violations, workers also can file anonymous complaints with the Department of Labor. The department's Wage and Hour Division investigates such complaints and, if it finds violations, usually will try to negotiate a settlement with the employer before going to court. Any employees who receive unpaid wages through such a settlement are barred from filing their own lawsuit, and if the Department of Labor files a lawsuit over a violation, individual employees cannot do so. Also, employees can file class-action lawsuits over FLSA violations, but only people who specifically agree to be part of the class can recover back pay or liquidated damages. Class-action FLSA lawsuits cannot recover damages for unnamed or unidentified victims of violations.