Maryland Court of Appeals: Contrary to Federal Court Rulings, Maryland Employees Are Eligible to Recover Treble Damages from Employers Failing to Pay Overtime
More bad news for employers: Maryland’s Court of Appeals (its highest court) has now put to rest any question about an employee’s right to recover treble damages in connection with an unpaid overtime claim.
Like many other states, Maryland has a statute that addresses an employer’s obligation to pay overtime (the Wage Hour Law or WHL) and a separate statute that addresses an employer’s obligation to pay wages generally (the Wage Payment and Collection Law or the WPCL). The WPCL permits an employee to recover up to three times the unpaid wages – better known as “treble” damages – unless there was a “bona fide dispute” as to the employee’s right to such wages.
For many years, federal courts applying Maryland law have treated the WHL and WPCL as distinct statutes, holding that an employee on the winning end of an overtime claim under the WHL was not entitled to treble damages under the WPCL. These holdings were important because most plaintiffs with overtime claims sued in federal court alleging violations not only of Maryland’s WHL but also under the federal Fair Labor Standards Act. The Maryland Court of Appeals seems now to have foreclosed any possibility that the federal courts will continue to preclude employees seeking unpaid overtime from recovering treble damages under Maryland’s WPCL.
In the case of Peters v Early Healthcare Giver, Inc., the Court held (contrary to federal court decisions) that a Maryland employee who is not paid overtime wages may also seek treble damages under the state’s WPCL. These damages are not automatic, however; they may only be awarded in the trial court’s discretion where a bona fide dispute existed over whether the wages were due. But, it is for the employer, not the employee, to prove the existence of a bona fide dispute.
Peters is a clear win for employees and ups the ante for Maryland employers who may now be on the hook for treble damages, and will be the ones required to provide otherwise.