Imagine trying to survive in Manhattan on the minimum wage. While it may seem impossible, it apparently can be done. When employees are paid under the minimum wage, are not paid their hourly or salaried wage, or are not paid overtime, it is a violation of New York and federal employment laws.
Unfortunately, some employers hide behind arbitration clauses or other restrictions that dictate how employees are expected to handle any disputes over wages. In some cases, it may cost more for the employee to fight for unpaid or underpaid wages than the sum of the wages themselves. And, according to a recent court decision, those policies are enforceable.
The U.S. District Court for the Southern District of New York agreed that the woman who brought a lawsuit for unpaid overtime needed to bring a class action lawsuit to get her wages. The 2nd U.S. Circuit Court of Appeals, however ultimately decided that an employer's policy that prohibits class actions and requires individual arbitration could be enforced. The court looked to the Fair Labor Standards Act and a loophole that allows such action by employers. So, even though an employee has a claim to unpaid overtime, he or she may need to spend more money than he or she hopes to receive just to hold an employer accountable.
While unpaid wages are certainly nothing to scoff at, it is also concerning that employers can hide behind employment policies and arbitration clauses when they do something wrong. For employees who are concerned about their employers practices, it may be best to talk with an employment law attorney and explore some of the legal options available.
Source: Albany Times Union, "New wage policies favor employers," Graig F. Zappia, Dec. 28, 2013