Avoiding Double Damages in Connecticut Unpaid Wage Cases: What is Good Faith?

Employers should be aware of a recent Connecticut Superior Court decision that defines the term “good faith belief” under Connecticut wage payment laws.  This definition is important, because if the Court finds that an employer had “good faith” in not paying wages, the court will not double the unpaid wages as damages.

Damages under Connecticut wage payment laws differ dramatically based on whether an employer can demonstrate that a failure to pay wages due was based on a good faith belief that the underpayment was in compliance with the law:

• If the employer can demonstrate such a good faith belief, it will be liable for damages for unpaid wages, whether minimum wages, overtime or otherwise.
• If the employer cannot demonstrate a good faith belief, it will be liable for twice the full amount .

Thus, if an employer paid an employee $15,000 when it should have paid the employee $20,000, an employer who can demonstrate a good faith belief would be liable for damages of only $5,000, while an employer without a good faith belief could be subject to damages in the amount of $10,000.  An employer who fails to pay wages is still liable for the employee’s attorneys’ fees and cost, regardless of whether good faith exists.

The court in Stevens v. Vito’s by the Water, LLC, No. HHDCV156062506S, 2017 WL 6045302, at *5 (Conn. Super. Ct. Nov. 9, 2017), clarified what an employer needs to show to establish good faith.  The court was clear that ignorance is not good faith:

[A showing of good faith] requires more than ignorance of the prevailing law or uncertainty about its development.  It requires that an employer first take active steps to ascertain the dictates of the [law] and then move to comply with them

It is likely that other courts will adopt this same definition, as it is based on the federal interpretation of a similar provision in the Federal Fair Labor Standards Act (“FLSA”).  For employers, this definition sets a high standard, as it imposes an affirmative obligation to ensure awareness and compliance with the requirements of the CMWA.  Small businesses, in particular, run the risk of running afoul of the CMWA, and face exposure to increased damages in the absence of competent legal guidance.

If you have questions about the Connecticut wage payment laws, or any current wage and hour claim, contact Carolyn A. Trotta at Zeldes, Needle & Cooper, P.C.