Pennsylvania Supreme Court Will Consider if Wage Law Permits Liquidated Damages for Late Pay Claims

State Wage Payment & Collection Act laws are powerful tools to ensure that employees are timely paid in full for all wages earned. Many state laws have liquidated damages penalties doubling (or even tripling in New Jersey) the damages due if an employer is found to be in violation of paying wages when due. 

The Pennsylvania Supreme Court now will determine if employees can sue for withheld wages - and the liquidated damages allowed under state law - if their employer misses paying them in full on the regularly-scheduled payday, but catches up later. The case is Aita v. NCB Management Services Inc.

The Pennsylvania Superior Court had ruled that under the Pennsylvania Wage Payment and Collection Law (WPCL), missing a payday and the law's grace period was enough to trigger liability and the potential for additional (liquidated) damages. Pennsylvania’s Wage Payment and Collection Act allows liquidated damages in the amount of 25% of any wages that are not paid within 30 days of the regular pay date, the opinion noted. 

In this case, Marcelo Aita, the CEO of a debt collection firm, NCB Management Services, Inc., claims the company withheld his monthly guaranteed bonus wages, even though it ultimately made all his payments before he filed suit. NCB alleges it had cash flow problems that kept it from paying Aita for 11 months of his guaranteed retention bonus. During the month that Aita finally left the company, and over the following three months, NCB paid Aita in full for all past bonuses due, with interest. 

The Supreme Court will consider whether the text of the Pennsylvania Wage Payment and Collection Law plainly limits relief under the WPCL to employees who were owed wages at the time they filed suit. There is a three-year statute of limitations to file any claims. 

The legislative intent behind the WPCL was to require employers to stick to their pay schedules. It would seem clear that an employer who fails to timely pay when due would have to pay the statutorily available liquidated damages as well as reasonable attorney’s fees to the prevailing employee as a remedy for having had to engage in litigation to get that to which the law entitles him.