A. What are the Rules?

An employer in Connecticut is required to pay each employee on a weekly basis all wages which are due. The end of the regular pay period cannot be more than eight days before each regular payday. If the regular payday falls on a non workday, the employer is required to pay the employee on the preceding workday. When an employee voluntarily terminates employment, the employer is required to pay any wages due to the employee by the next regular payday. However, if the employer discharges the employee, it must pay all wages due not later than the next business day after the discharge occurs. If the amount due is in dispute, the employer must pay all wages which it concedes are due. Additionally, an employer may only withhold from an employee's wages those amounts which it is required to withhold by state or federal law or when the employee has provided the employer with written authorization to withhold certain amounts.

B. What are the penalties?

The State of Connecticut may bring criminal charges against an employer or an officer or agent of any employer who fails to follow the requirements set forth above.

If the total amount of unpaid wages owed is more than $2,000, an individual violating the law may be fined between $2,000 and $5,000 and imprisoned for up to five years.

If the total amount of unpaid wages owed is between $1,000 and $2,000, an individual violating the law can be fined between $1,000 and $2,000 and imprisoned for up to one year.

If the amount of unpaid wages owed is between $500 and $1,000, an individual violating the law may be fined between $500 and $1,000 and imprisoned for up to six months.

If the total amount of unpaid wages is $500 or less, an individual violating the law can be fined between $200 and $500 and imprisoned for up to three months.

Fortunately, in 1978 the legislature made the imposition of these penalties optional rather than mandatory.

C. Are You Kidding?

After reading about the types of fines and jail terms that might be handed out by a judge, you may be wondering: "Could this happen to me?" The answer is: "You bet!"

In 1990, a bartender at a Mexican restaurant in Westport filled out a time card for each day that she worked and submitted it to her employer. However, she did not receive a paycheck for any of the eight weeks for which they were submitted. During that time, her only compensation was from tips which she earned. In October of 1990 the bartender quit and for several months thereafter attempted to collect her outstanding pay. Finally, eleven months after she quit, the bartender received the wages which were due her. The president of the corporation, which owned and operated the restaurant, was subsequently arrested and convicted for failure to pay wages. After conviction, the defendant was sentenced to 240 days in jail which was suspended after serving 90 days. He was also fined $8,000.

The president claimed that the statute was unconstitutional because intent not to pay wages was not specifically set forth as an element of the crime.

However, the Appellate Court, upon review of the defendant's conviction, stated that public policy required the protection of employees and those who failed to pay wages did so at their own peril – neither good faith, nor ignorance, would be a defense. In fact, testimony that the defendant did not know about the wage dispute between the bartender and the restaurant manager was deemed irrelevant since the state was not required to prove intent with a strict liability offense.

Additionally, the court held that corporate officers could be criminally liable for failure to pay wages even if the responsibility for handling payroll matters was delegated to another. The court reasoned that allowing an officer to avoid criminal responsibility by delegating payroll duties to another would negate the protective purpose of the wage statutes. "Criminal liability flows from the defendant's failure to pay wages, not his status as an employer." The statute is one of strict liability "designed to eradicate the evil of nonpayment of wages, even though those without an evil purpose might end up ensnared in its net." The defendant and his corporation clearly benefitted from the bartender's efforts.

In September, 1995 six individuals employed by American Investment Company, Inc. were not paid for services performed for the company. Sometimes paychecks were returned for insufficient funds. Other times employees were given paychecks but asked not to cash them until advised that it was all right. Still, on other occasions, employees were not given paychecks but were told they would be paid when funds were received from clients of the company. Eventually, all six employees left the company. The amount owed each employee ranged from $1,200 to $6,500. In total the group was owed $18,150.

The president of the company, who was responsible for its day to day operation, was arrested and subsequently convicted of failing to pay wages. He was sentenced to ten years in prison, suspended after three years and placed on probation for five years.

In upholding his conviction, the Appellate Court deemed violation of wage laws as "public welfare offenses." They were violations of "neglect where the law requires care, or inaction where it imposes a duty." The court stated that it was the injury to the employee that mattered, rather than the intent of the violator.

D. Summary

Officers of corporate employers must realize that it is crucial that they carefully follow the state's wage and hour laws since failure to do so may well constitute a crime. This caution should be especially heeded by small businesses where cash flow might, at times, be a significant issue. Planning is essential.

Reprinted with permission of publisher. First appeared in Connecticut Employment Law Letter (December 2000). For subscription information, call (800)274-6774.