John Stewart
Tue, 07/11/2023
On June 22, 2023, a Southern District of Iowa district court judge granted preliminary approval of a $15,000,000.00 class action settlement for wage and hour claims brought by University of Iowa Hospitals and Clinics (“UIHC”) employees. The final settlement approval hearing is currently set for August 28, 2023.
The employees alleged in their lawsuit that UIHC had failed to pay them on time when they earned “adjustments” to their base pay and when they earned overtime pay. The late payments, the employees argued, violated the Iowa Wage Payment and Collection Law (“IWPCL”) and, with respect to the late overtime payments, the federal Fair Labor Standards Act (“FLSA”). The employees claimed that, in addition to suffering late payments while working at UIHC, their employer had also failed to timely pay their final paycheck upon separation from employment, again in violation of the IWPCL.
The 15-million-dollar settlement represents a major win for the employees harmed by the UIHC’s pay practices and serves as an expensive lesson on the importance of paying employees for their work promptly and in full. Like Iowa, many other states have enacted wage payment and collection laws requiring timely payment of overtime or other wages, often carrying severe consequences for violations, in the form of liquidated damages, treble damages, or statutory penalties.
As of the time of this writing, the Department of Labor reports that at least 36 states, as well as Puerto Rico and the District of Columbia, have enacted laws requiring wages to be paid at least semi-monthly. Some jurisdictions, such as California, Connecticut, Iowa, Massachusetts, Michigan, New Hampshire, New York, Puerto Rico, Rhode Island, Vermont, and Virginia require at least some employees to be paid on a weekly basis.
Even in those jurisdictions with less protective wage and hour laws, the federal Fair Labor Standards Act requires—at least for overtime—that employees receive payment “as soon after the regular pay period as is practicable,” and “in no event may payment be delayed beyond the next payday” after computation of overtime pay due can be made. 29 C.F.R. § 778.106.
For more information on employees’ rights to be paid promptly and fairly for their work, visit https://www.mselaborlaw.com/practice-areas/late-payment or contact us at info@mselaborlaw.com.
