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Indiana Amends Wage Claims Act and Wage Payment Statute

Indiana Amends Wage Claims Act and Wage Payment Statute

 

On May 5, 2015, Governor Pence signed Indiana House Bill 1469, which amended the damages provision of Indiana’s Wage Claims Act and Indiana’s Wage Payment Statute to make it more favorable for employers. The Wage Claims Act covers former employees, who lost their job involuntarily, who are owed wages from their previous employer. The Wage Payment Statute covers current employees, and former employees who voluntarily resigned, who are owed wages from their previous employers.

The amendment inserted a good faith safe harbor provision for treble/liquidated damages. Prior to the amendment, both statutes provided remedies of lost wages, attorneys’ fees and costs, and automatic treble/liquidated damages not to exceed double the amount of wages due. In other words, if an employee was owed $10,000.00 in wages, the employee could recover $10,000.00 in lost wages, $20,000.00 in treble/liquidated damages, plus attorneys’ fees and costs. Prior to the amendment, there was no good faith exception. The treble/liquidated damages were automatically awarded. There a number of public policies behind the automatic treble/liquidated damages provision, most notably the need to provide incentives for injured claimants, and legal counsel, to force employers’ compliance with the law when individual damages were relatively small.

With HB1469, employers will now attempt to avoid treble/liquidated damages by arguing to the Court (not the jury) that their actions/inactions were made in good faith. The statute does not define good faith, so expect a fair amount of ensuing litigation on the definition, scope, and application of this new good faith safe harbor component to Indiana’s wage laws. The new law takes effect July 1, 2015.