Sunday, July 29, 2007

Can My Maryland Employer Withhold My Wages?

Maybe. In Maryland, an employee must agree in writing that his or her employer can withhold earned wages. Absent a written agreement, an employer has no right to withhold pay, even if the employee clearly owes the employer money or has failed to return company property, such as a laptop computer, at the conclusion of the employment relationship. If an employer does withhold pay without obtaining advance authorization from the employee, the employer potentially becomes liable to the employee for treble (triple) damages and attorney's fees under Maryland's Wage Payment and Collection law.


Thursday, July 26, 2007

Top 5 Ways Restaurants Violate Wage Laws

1. Failing to pay the correct amount in overtime. Tipped employees who receive the special restaurant sub-minimum wage are entitled to overtime at one and one-half times the actual minimum wage.

2. Failing to pay the correct special restaurant sub-minimum wage. In Maryland it is $3.08 per hour.

3. Failing to pay employees any direct wages (and paying the employees only in tips).

4. Keeping a portion of pooled tips for "the house" (i.e., the restaurant).

5. Failing to pay overtime to "assistant managers" who otherwise do not qualify for a white collar exemption.

Labels: , ,

Wednesday, July 25, 2007

I work for a non-profit so I am not entitled to overtime: True or False

FALSE. With very limited exceptions most employees of non-profits are entitled to overtime assuming they are not exempt from receiving overtime for some other reason. The limited exceptions listed on the Maryland Department of Labor's website are:
  • Not for profit temporary home care services
  • Not for profit concert or theater promoters

Of course, employees of non-profits may be exempt for some other reason, such as if they are exempt administrative, executive, or professional employees.


Monday, July 23, 2007

Federal Minimum Wage Increases to $5.85 Per Hour; Maryland Minimum Wage is $6.15 Per Hour; DC Minimum Wage is $7.00 per hour

Don't forget -- July 24, 2007 marks the effective date of an increase in the Federal Minimum Wage from $5.15 per hour to $5.85 per hour. This is the first of three incremental increases in the federally-mandated minimum wage and is part of the Fair Minimum Wage Act of 2007. The next increase to $6.55 per hour goes into to effect on July 24, 2008 and the final increase to $7.25 per hour goes into effect on July 24, 2009.

In Maryland, the minimum wage is currently higher than the Federal Minimum Wage and requires employers to pay employees working in Maryland at least $6.15 per hour. On July 24, 2008, it will increase to $6.55 per hour. On July 24, 2009 it will increase to $7.25 per hour.

In the District of Columbia, the minimum wage is also higher than the Federal Minimum Wage and is now $7.00 per hour. On July 24, 2008, it will increase to $7.55.


Jury Finds Maryland Company Unlawfully Withheld Vacation Pay From Departing Employees

In the fall of 2004, a group of 14 employees provided notice of their resignation to their employer, Catapult Technology, Ltd., in order to join another government contractor. Due to circumstances beyond their control, the employees were not able to provide 2 weeks advance notice of their resignation, which, according to Catapult's Employee Handbook, resulted in a forfeiture of their earned but unused vacation. The employees collectively had approximately $70,000 of accrued vacation pay withheld at the time of their resignations. When Catapult insisted that the forfeiture provision in their handbook was fully enforceable, the employees filed suit in the Circuit Court for Montgomery County under Maryland's Wage Payment and Collection law, seeking treble damages and attorney's fees.

Marc J. Smith, a partner at the Rockville, Maryland law firm of Smith, Lease & Goldstein, LLC, represented all 14 of the former employees. A copy of the Complaint can be found here. After filing suit, Smith filed a Motion for Partial Summary Judgment on the issue of liability, arguing that the Wage Payment and Collection law applied to accrued but unused vacation and that the forfeiture provision contained in Catapult's Employee Handbook was unenforceable and void under Maryland public policy. Judge Dugan agreed and collectively awarded the employees nearly $70,000. The only issue left for trial was whether Catapult had a bona fide basis to withhold the employees' accrued vacation pay and, if not, whether they were liable for up to treble damages and the employee's attorney's fees.

After a 2 day trial, the jury returned a verdict in the employees' favor, finding that Catapult had withheld the employees' vacation pay in bad faith and awarded the employees nearly $100,000 in enhanced damages. The Court subsequently awarded the employees all of their attorney's fees accrued through the trial. Catapult appealed both Judge Dugan's ruling and the jury award to Maryland's Court of Special Appeals. Oral argument was held in March 2007 and the parties are awaiting a decision from the Court of Special Appeals. A copy of the appellate brief filed on behalf of the employees can be found here.

Labels: , ,

Friday, July 20, 2007

Rubin Employment Law Firm Announces Overtime Pay Claim Against Master Care Flooring, Inc.

Rockville, Maryland, July 20, 2007: A former employee of Master Care Flooring, Inc. is prosecuting an overtime lawsuit in the U.S. District Court in Maryland charging the flooring company with failure to pay overtime wages in violation of federal and state labor laws. The suit was filed by the Rubin Employment Law Firm, P.C. The suit is captioned, Carlton Thurman v. Master Care Flooring, Inc., et. al, Civil Case No. 07-1145 (United States District Court for the District of Maryland).

The suit alleges that Master Care Flooring paid Mr. Thurman and others on a piecework basis, but failed to pay them the required overtime premium. Mr. Thurman worked as a flooring finisher and painter.

Master Care Flooring is a Baltimore residential and commercial flooring contractor. Among other jobs, Master Care installed the flooring at the Strathmore Music Center located in North Bethesda, Maryland.

The public can obtain a copy of the complaint here or by contacting James Rubin by e-mail to Current and former Master Care Flooring employees who wish to learn more should visit or call 301-760-7914 to contact the plaintiff’s attorney.

Labels: ,

You May Be Entitled to Commissions in Your Pipeline when Your Employment Terminates

The Maryland law on commissions is favorable to employees. The Law that applies to commissions in Maryland is the Maryland Wage Payment and Collection Law.

A key provision of the Law states:

“Each employer shall pay an employee or the authorized representative of an employee all wages due for work that the employee performed before the termination of employment, on or before the day on which the employee would have been paid the wages if the employment had not been terminated.” Md. Code Ann. Lab. & Empl. §3-505.

“Wages” are defined as “all compensation that it is due to an employee for employment,” including commissions. Md. Code Ann. Lab. Empl. §3-501(c)(1) &(2). Md. Code Ann. Lab. Empl. §3-501(c)(1)

Section 3-501.1 provides the employee a civil cause of action to recover wages withheld in violation of Section 3-505. In addition, the Court can award the plaintiff treble damages and reasonable attorney’s fees. Section 3-501.1

The Maryland Court have issued a series of opinions on the rights salespeople have to collect their earned commissioned under the Maryland Wage Payment and Collection Law.

Admiral Mortgage, Inc. v. Cooper, 357 Md. 533, 745 A.2d 1026 (2000).

In Admiral Mortgage, Inc. v. Cooper, 357 Md. 533, 745 A.2d 1026 (2000), an employee, whose main job was to generate and develop loans, sued for commissions that closed after his termination. For the loans in question, Mr. Cooper had obtained a completed application and other necessary documents and turned the files over to another employee for processing and closing. 357 Md. at 537, 745 A.2d 1026. Admiral Mortgage claimed that, "when a loan officer left, any of his or her pending applications would be worked on by someone else, and that person would be paid the commission when the loan closed." Id. at 544, 745 A.2d 1026. Rejecting the employer’s assertion that no commission was due on any loan that had not closed by the time the plaintiff left his employment, the jury awarded the plaintiff the unpaid commissions. The Maryland Court of Special Appeals affirmed the judgment based upon the jury award.

● Medex v. McCabe, 372 Md. 28, 811 A.2d 297 (2002)

In Medex, the plaintiff was a sales representative for a medical supply manufacturer. Part of his compensation package was incentive fees based on sales made during fiscal years. His employment agreement, however, provided that “[p]ayment from all Company incentive compensation plans is conditional upon meeting targets and the participant. . . [being] employed at the time of actual payment.” 372 Md. at 33, 811 A.2d 297.

The plaintiff resigned on February 3, 2000, four days after the fiscal year ended. The employer paid the inventive fees on March 31, 2000. Because the plaintiff was not employed on that date, his employer refused to pay plaintiff’s fees.

Reversing the decision of the trial court, the Court of Appeals held that the plaintiff was entitled to the incentive fees. While acknowledging that under common law contract principles, the contract provision would have provided sufficient basis to deny payment, the Court of Appeals noted that “[c]ontractual language between the parties cannot be used to eliminate the requirement and public policy [of §3-505] that employees have a right to compensated for their efforts. Id. at 39, 881 A.2d 297. The court found the contract language in question invalid and unenforceable. Id.

The Medex Court further explained that employers in this State cannot hold their employees hostage by imposing arbitrary barriers to their compensation. The Court of Appeals held that “the employee’s right to the payment of wages vests without satisfaction of the provision of continued employment. To hold otherwise would place the rights of employees to these wages at the whim of their employer, who could simply terminate any at-will employee whose incentive fees if didn’t wish to pay.” Id. at 42, 811 A.2d 297.

McLaughlin v. Murphy, Civ. No. CCB-04-767, 2004 WL 1634980 (D.Md. July 20, 2004) (Blake J.)

In Murphy, the plaintiff was a loan officer paid by commission. His employment agreement provided that, should his employment be terminated, he would not receive a commission on loans that had not settled before termination. After he was terminated for lying about his dealings with a client, Mr. McLaughlin brought claims against his former employer under the Wage Payment Act for commissions on three loans that he had originated but had yet to close at the time of his

In denying the plaintiff’s claim, Judge Blake noted that, for two of the pending loans, Mr. McLaughlin had signed up the customers for loan programs for which they did not qualify. As a result, these loans had to be completely redone by another loan officer. Significantly, the replacement loan officer was paid the commission once the loans closed. The third loan had yet to close when Judge Blake issued her decision. 2004 WL 1634980 at *5.2

Rogers v. Savings First Mortgage, LLC, 362 F. Supp. 2d 624, 643-646 (D.Md. 2005)

The plaintiffs in Saving’s First were loan officers who sued their employer for unpaid commissions on loans that went to closing after a “voluntary or involuntary” termination. 362 F. Supp 2d at pp. 624, 627. The employer’s policy was not to pay commission to a loan officer on any deal that went to closing after a loan officer’s employment terminated.

After reviewing Murphy and Admiral Mortgage, Judge Nickerson denied the employer’s
motion for summary judgment in Savings First. He found the facts there were more similar to Admiral Mortgage than Murphy. The loan officers at Savings First developed leads then assigned most of the administrative work to other employees. Significantly, after the plaintiffs terminated their employment, Savings First did not hire new loan officers to complete the work. Nor did it pay commissions to any other loan officer. It just kept the money. In such circumstance, the Court could “[]not conclude that Defendants' bright line rule denying all Plaintiffs their terminal commissions is reasonable.”

Labels: , ,

Sunday, July 1, 2007

About Us

"Wage Collection" was developed by Marc J. Smith and James R. Rubin, attorneys based in Rockville, Maryland who devote their practices exclusively to employment law and litigation. We have established this site as a source for employees in the Washington, D.C. metropolitan area seeking to recover unpaid wages, overtime, commissions, vacation, severance and other forms of compensation unlawfully withheld by their employers. Our biographies are set forth below -- we invite you to contact us in the event you have any questions or believe you are owed wages from your employer.

Marc J. Smith is a partner with Smith, Lease & Goldstein, LLC, a law firm based in Rockville, Maryland. Mr. Smith, who has been in practice for nearly 17 years, heads his firm’s employment practice. Mr. Smith represents both management and individuals in a broad spectrum of employment-related matters. In addition to handling and litigating cases involving unpaid wages and other compensation issues, Mr. Smith’s practice covers nearly all facets of the employment relationship, including issues relating to hiring, discharge, discipline, discrimination, harassment, family and medical leave, disability, compensation, non-competition and non-solicitation. Mr. Smith is a Montgomery County native, and a 1990 graduate of the University of North Carolina at Chapel Hill law school. More information regarding Mr. Smith and his firm can be found here and here.

James E. Rubin is the founding partner of The Rubin Employment Law Firm, P.C. Before founding the firm, Mr. Rubin was a partner with Farber Rubin, LLC, where he managed the firm's nationally recognized employment litigation practice. Mr. Rubin counsels employers and employees in a variety of employment law matters. In 2005, for example, Mr. Rubin defended employers in two different sexual harassment trials, each lasting more than two weeks. He has obtained six figure settlements on behalf of numerous plaintiffs. In 2003, Mr. Rubin obtained an $880,000 verdict on behalf of a commissioned salesperson. Before joining Farber Rubin, LLC, Mr. Rubin was an associate with Sherman, Dunn, Cohen, Leifer & Yellig, where he represented national and local unions. Mr. Rubin obtained his bachelors degree with honors from Penn State University and his law degree, cum laude, from the University of Pittsburgh.