How a $608 Mistake Cost This Business Over $40,000

If you underpaid an employee by $608, how much should you have to pay to rectify the mistake? $608? $1216 to punish you for making the error? Both those things seem somewhat reasonable and, indeed, Precision Demolition paid the defendant twice his actual lost wages. But, they also had to fork over $41,333.70 in attorneys fees.

This was actually not what the attorneys asked for–they asked for $141,236.50 in attorney’s fees, $1,272.30 in nontaxable expenses, and $10,568.82 in taxable costs, and the court cut it down by doing some calculations based on what an attorney should be paid in the local area.

Is this fair?

Some of you may say yes, evil horrible businesses try to steal wages from unsuspecting and naive employees. Wage theft is the the idea that businesses purposely underpay employees, often by labeling them as exempt from overtime when the law says the employee qualifies for overtime pay.

To keep reading, click here: How a $608 Mistake Cost This Business Over $40,000

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7 thoughts on “How a $608 Mistake Cost This Business Over $40,000

  1. Wage theft is quite real. I have had employers make me a written offer for an hourly wage, refuse to pay me the wage, then destroy the paperwork when I called them on it. I have had employers make me clock out, then have me go back to work. This is real and happens every day and the employers know about it. Some wrong paychecks may be due to FLSA complexity, but many are just employers being cheap.

    1. I once worked for a boss who paid everyone as salaried-exempt simply because she did not want to pay overtime. Then when she felt like the law was catching up to her (and the employees knew better!) she made everyone hourly, but forbid ANY overtime at all and micromanaged the clock. If someone had even 1 minute over 40 hours, they were written up!

    2. Yes, it’s either hopelessly naive or outrageously disingenuous to say wage theft doesn’t exist.

      It may be the case that the law is too complex or outdated. But there are bad actors especially at the bottom of of the employment tree. And those bad actors should, indeed, be penalized.

  2. Yes, it’s a different saga for knowledge workers (am I working when I’m in the shower, and a solution for the vexing issue appears? Did it appear due to overnight ruminations? Was I working in my sleep?) Which argues for salary, but then becomes justification for management driving 60-hour-per-week “death marches” in software development.

  3. Disclaimer: I am a retired trial lawyer and member of the judiciary. People hate lawyers until they need one. It’s easy to get people exercised over those big, bad, lawyers and their outrageous fees. However, fees as large as the ones in this case suggest that the employer — far from merely being confused but otherwise acting in good faith — fought the case, tooth-and-nail, from the beginning to the end; in other words, that the employer’s own actions actively contributed to the high (in relation to the amount in dispute) amount of attorney fees. Litigation is — frequently — a “crap shoot.” The employer in this case appears to have gambled, and lost.

  4. Whenever anyone gets an overpayment in a paycheck, that mistake is demanded back with interest over the time period not noticed in accounting (simple fact). That large sum can occur both ways (employer and employee) even without going thru a court scene.
    As this is an accounting mistake, I always fail to see how it takes so long for proper accounting mistakes to be seen and rectified without causing undue unnecessary costs. I call this the fallout of downsizing accounting to keypunch operation. So going cheap causes this problem (you get what you pay for).
    Labor is undergoing major changes in present times, with a big tendency to not trust the labor unions that got most of the laws that protect workers in place and the higher wages because of the abuse claimed by those who don’t want to pay union dues to subsidize union’s political views. (This is a completely separate article but active workers in union meeting can change how funds are spent.) As reported by this blog, a right to work contract doesn’t guarantee a paycheck or benefits but just gives one a choice to work if you accept terms of employment, basically a contract worker. (No work, no pay)
    The trend today of younger workers to want a paycheck of a certain level without doing any effort other than being present on the job has led to abuse by employers to micro-manage time spent working to control labor costs. (Hence the use of exempt versus non-exempt to eliminate any overtime pay.)
    I would like to see better communication across the board on job expectations for pay rendered.

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