The first case, Heaps v. Nuriche, Case No. 20130132, addresses when and under what circumstances officers or employees may be held personally liable for wage claims under the UPWA. The case turns on the definition of "employer" in the UPWA, which defines employer to include "every person, firm, partnership, association, corporation, receiver or other officer of a court of this state, or any agent or officer of any of the above-mentioned classes, employing any person in this state." U.C.A. 34-28-2(c). A plain reading of the language of this definition seems to clearly suggest that any agent or officer of an employer can be held personally liable, in the same way any person, firm, partnership, association, receiver or other officer of a court can. But, there is no express provision of personal liability in the UPWA and the reach of the language seems extremely over broad. Did the legislature really intent to hold every employee and every agent of an employer personally liable for unpaid wages when the corporation or other entity they work for does not pay wages? And, doesn't this defeat the entire purpose or corporate liability protections for employees of corporate entities? Yet, what about those employees or officers of a company who continue employing employees despite knowing that the corporation they work for will not be able to pay wages to these employees? The Utah Labor Commission has taken the position that the UPWA does extend to certain officers and employees of corporations or other entities employing workers. Whatever the Supreme Court ultimately decides, you can expect that this issue will be revisited by the Utah Legislature in the coming years.
The second case, Utley v. Mill Man Steel, Inc., Case No. 20130162, involves a claim brought by Stavros Law on behalf one of its clients, seeking to recover in excess of $100,000 in unpaid commissions that were earned. At trial, the District Court granted our client's motion for summary judgment, finding that Mr. Utley was owed all of his commissions, plus a statutory penalty, interest and attorney's fees. The District Court entered judgment in favor of Mr. Utley in excess of $200,000 and in doing so held that Mill Man's counterclaims against Mr. Utley for purported breaches of fiduciary duty, negligence and conversion did not allow it to withhold wages earned by Utley. Instead, the District Court ruled, as Stavros Law argued, that Mill Man was required to pay wages owed to Utley and then pursue any counterclaims it believed it had against him separately. On appeal, the Supreme Court will be required to interpret key provisions of the UPWA, including 34-28-3, 34-28-5, and 34-28-6, among others. The case has significant importance to employees who have wage claims over $10,000 and who cannot file a wage claim through the Labor Commission.
The UPWA governs the method, timing and manner in which employers pay wages in Utah. Among other things, it requires that “all wages shall be paid in full” to employees. Utah Code Ann. § 34-28-3(1)(e). The UPWA applies to the vast majority of employers in Utah and requires employers to pay an employee’s wages within 24 hours of termination (or upon the next scheduled payroll when an employee quits). Utah Code Ann. §§ 34-28-1 and 34-28-5(1) If 24 hours elapse without payment and the employee then makes a written demand for payment, the employee’s wages continue to accrue from the date of the demand to the date payment is made (but in no event to exceed 60 days). Id. The employee may recover his unpaid wages, the statutory penalty, and attorney’s fees by bringing a civil action against the employer within 60 days from the date of separation. Id.; Utah Code Ann. § 34-27-1.
Employers
are expressly prohibited from withholding or diverting an employee’s wages
unless: (1) the employer is required to do so pursuant to court order, state
law, or federal law; (2) the employee expressly authorizes (in writing) the
withholding; or (3) “the employer presents evidence that in the opinion of a
hearing officer or an administrative law judge would warrant an offset.” Utah Code Ann. § 34-28-3(5). If
none of the exceptions exists, but the employer desires to
pursue claims for damages, offsets, and recoupments, the UPWA expressly states
that the employer may do so in a civil action against the employee. Utah Code Ann. § 34-28-3(8).
For claims less than $10,000 and employee can file a wage claim through the Utah Labor Commission. Through Utah Code
Ann. § 34-28-9, the UPWA grants rulemaking authority to the Utah Labor Commission to investigate and determine the validity wage
claims. The Commission has exercised such
authority through Utah Admin. Code R610-3-1 et seq. R610-3-18 lists 13 “lawful deductions or
offsets from wages due an employee.” The list contains deductions and offsets for: municipal, state and
federal taxes; employee benefit and deferred compensation plans; union dues;
the employee’s written authorization; the purchase of goods from the employer; a
valid garnishment or attachment; the employee’s negligence (provided the
employer obtains a judgment against the employee in a judicial proceeding before withholding wages); repayment
of a loan to the employer (if the loan occurred during the employment and the
employee provided written acknowledgment of the loan);
sums resulting from the property loss or damage caused the employee’s criminal
conduct (provided the employee has been adjudged guilty in a judicial
proceeding before the withholding of
wages);
and sums deducted for cash shortages (provided the employee acknowledges in
writing that such shortages may be deducted from his/her wages).
For additional information about the UPWA, or for information about employee's rights under the UPWA, or employer's obligations under the UPWA, please contact our law firm.
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