Making a Proper Demand for Payment of Wages Under the Utah Payment of Wages Act and U.C.A. § 34-27-1

A recent decision issued on May 7, 2015 by the Utah Court of Appeals, Francis v. National DME, 2015 UT App 119, underscores the importance of making a proper demand for wages prior to filing a lawsuit and seeking attorneys fees and costs under Utah Code Ann. § 34-27-1 (allowing recovery of attorneys fees to recover wages).

In Francis, National DME terminated Francis's employment after he failed to report to work for three consecutive days. He subsequently filed a wage claim with the Utah Labor Commission. Thereafter, Francis sent written demand for payment of wages he believed were owing, stating in his demand that he was owed more than $15,000 in commissions, among other damages.

At trial, the jury awarded Francis $24,000 in commissions. However, on appeal, the Court of Appeals struck the award, finding that the evidence submitted at trial only supported an award of $9,700 in commissions. Because the award was actually less than what was demanded, Francis was not entitled to attorneys fees and costs. Obviously, this type of result can be devastating to a client and his counsel, and may result in the loss of a significant amount of attorneys' fees that otherwise could have been recovered.

U.C.A. § 34-27-1 provides that whenever an employee brings suit for wages earned and a "demand has been made in writing at least fifteen days before suit for a sum not to exceed the amount so found due, then it shall be the duty of the court before which the case shall be tried to allow to the plaintiff a reasonable attorneys' fee in addition to the amount found due for wages, to be taxed as costs of suit." In interpreting Section 34-27-1, the Court of Appeals held that this provision requires that the demanded amount be more than the judgment obtained by the employee. As a result, Francis was not entitled to an award of attorneys' fees.

Francis deals with a common issue in wages claims - how to demand payment of wages for commissions that are due to an employee. Often, an employee who is paid wages on a commission basis does not know the exact amount of commissions owed to him at the time of his termination because all of the documents and information related to the commissions that are actually owed remain in the employer's possession. For example, commissions are typically owed to employees only after accounts are finalized, monies are paid for a sale or other conditions have been satisfied, such as a chargeback waiting period. In such situations, an employee is well advised to request a sum that is in alignment with what the employee knows is owed, and to include language indicating that if the sum is above such amount, the employee further requests payment of such amounts beyond the demanded amount. Alternatively, the employee may want to attempt to get commission records to establish the amount of commission that are due, and also review the applicable sales commission policy. If those documents are not available, an employee may be wise to send an initial communication about owed wages, followed up with a more specific demand for wages of a specific sum prior to filing a lawsuit.

In addition to the foregoing, there are a number of other strategies that can be used to get a better idea about the actual amount of commissions owed. If you have a claim for wages, or are defending against a wage claim, it's important to immediately attempt to determine the amount of wages at issue before proceeding at your own peril.  Please call one of our Utah employment law attorneys at (801) 758-7604 if you have questions about wage claims, or visit us online at utahtriallawyers.net for more information.