Employees might be entitled to back pay based on several federal and state laws.
The Fair Labor Standards Act (FLSA) is a federal law that entitles employees to a minimum wage and overtime wages. When employers don’t give employees at least the minimum wage and overtime wages when required, employees might be able to receive FLSA back pay for the wages they missed out on. However, there is an FLSA statute of limitations, or deadline, on an employee’s ability to claim those wages.
What is back pay?
Before getting to the FLSA statute of limitations on back pay, let’s make sure the definition of back pay is clear.
Back pay is wages you failed to pay an employee in the past and still owe. Specifically, back pay is the difference between what you paid and what you should have paid.
Employee back pay can include unpaid:
- minimum wage
- overtime wages
- promised wage increases
You might owe an employee back pay because you accidentally paid the wrong wages. Or, you might owe back pay because you willfully violated wage laws.
FLSA provisions for recovering back pay
The FLSA allows four methods for recovering back pay.
- The Wage and Hour Division of the U.S. Department of Labor supervises the payment of back wages.
- The U.S. Secretary of Labor can bring a lawsuit forward for back wages and liquidated damages.
- An employee can file a private lawsuit for back pay, liquidated damages, attorney’s fees, and court costs.
- The U.S. Secretary of Labor can get an injunction to restrain any person from violating the FLSA, including unlawful practices that could result in back pay.
An employee can not bring forward a lawsuit under the FLSA if they were already paid back wages under the supervision of the Wage and Hour Division. Also, an employee cannot file a lawsuit if the Secretary of Labor has already filed a suit to recover the wages.
FLSA statute of limitations on back pay
The FLSA has a statute of limitation to recover back pay. This means an employee must file their suit within a certain amount of time after the wage violation. After the back pay statute of limitations, the employee can no longer claim their back wages.
Generally, there is a two-year statute of limitations after the wage violation occurs. If your business had ongoing wage violations, an employee can recover wages for the two years prior to filing the claim. The employee cannot receive back wages for violations that go back further than the statute of limitations.
If you willfully violate the FLSA, there is a three-year statute of limitations.
Statute of limitations example
Vince began working at ACME Corp on April 1, 2014. His job requires him to work occasional overtime. Even though Vince receives a salary, he is a nonexempt employee. This means ACME Corp must pay him overtime wages for his extra work. However, ACME Corp never pays Vince overtime wages.
On November 1, 2017, Vince files a claim to attempt to get back wages for his FLSA unpaid wages for overtime. At this point, Vince has worked at ACME Corp for a little over three and a half years.
Because of the FLSA statute of limitations, Vince cannot receive back wages for his entire duration of employment at ACME Corp. He can only collect back wages for overtime pay he was owed in the two years prior to his claim. He can get back pay for wages owed between November 1, 2015, and November 1, 2017.
If ACME Corp willfully violated the FLSA overtime laws, then the three-year back wages statute of limitations would apply. Vince could receive back wages for owed overtime pay between November 1, 2014, and November 1, 2017.
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This article is updated from its original publication date of 5/1/2012.
This is not intended as legal advice; for more information, please click here.