“An Act Concerning an Employer’s Failure to Pay Wages” (Public Act 15-86), which took effect October 1, 2105, imposes double damages on employers who fail to pay an employee minimum wage or overtime pay in compliance with Connecticut's wage and hour laws. This law, codified as Connecticut General Statutes § 31-68, applies to both private and public employers.
Importantly, this legislation overrules well-established Connecticut Supreme Court precedent that required a trial's court finding of bad faith, arbitrariness or unreasonableness by the employer in order to award double damages and attorney's fees. In fact, the new law turns this precedent on its head.
Now, with one exception, an employee in a successful civil action may recover twice the full amount of the minimum wage or overtime wages (less any sum paid by the employer), plus costs and reasonable attorney's fees. To avoid paying double damages, it is incumbent upon the employer to establish that it had a good faith belief that the wages paid were in compliance with the law. Should the employer satisfy this "good faith" exception, the employee may recover only the full amount of the correct wages (less any amount paid by the employer), with costs and reasonable attorney's fees.
While the statute does not specify what satisfies this "good faith" exception, it is reasonable to anticipate that Connecticut courts will look to the "good faith" defense available under the Fair Labor Standards Act (the "FLSA") for guidance. Under 29 U.S.C. § 260, the court may deny liquidated damages (equal in amount to actual damages, i.e., the amount of unpaid compensation found owing) where the employer shows that, despite its failure to pay appropriate wages, it acted in subjective "good faith" with objectively "reasonable grounds" for believing that its acts or omissions did not violate the FLSA. To establish the requisite subjective "good faith," an employer must show it took "active steps to acertain the dictates of the FLSA and then act to comply with them." Barfield v. N.Y. City Health & Hosps. Corp., 537 F.3d 132, 150–151 (2d Cir. 2008). The employer's burden is admittedly "a difficult one" as "double damages [are] the norm and single damages the exception." Id. at 150 (citing Herman v. RSR Sec. Servs., 172 F.3d 132, 142 (2d Cir. 1999)).
This new law ups the ante for employers who fail to comply with Connecticut's wage and hour laws; it automatically doubles the damages available to prevailing plaintiffs and shifts the burden of establishing a"good faith" exception to the employer.
At the very least, it should inspire employers to reexamine their pay practices (with the assistance of experienced employment counsel) to ensure that they do not run afoul of Connecticut's wage and hour laws.