In a case that illustrates how a seemingly small error can cause an employer to suffer large damages, a U.S. District Court recently held that failing to post a required overtime pay poster in the workplace means that employees can pursue pay claims after the statutory filing deadline. At a minimum, the employer now faces the high cost of litigation defense. If things don’t go well, it will likely deal with a large judgment for unpaid overtime wages, interest, and legal fees for both sides.
The Fair Labor Standards Act (FLSA) provides for overtime pay to certain employees who work more than 40 hours per week. It requires employers to post informational notices in the workplace so that workers are aware of their rights. In Figueroa v. Cactus Mexican Grill, LLC, the plaintiff restaurant employee claims she is due unpaid overtime from 2013 to 2020. Because much of that period is well outside the three-year limitations period for filing a lawsuit under the FLSA, the defendant employer moved to dismiss, at least in part. Its failure to post the required informational notice, however, misled its employee, the court ruled, and it consequently denied the motion to dismiss.
The decision means that the plaintiff in Figueroa can now pursue her overtime claims under the doctrine of equitable tolling, which allows the extension of statutory filing deadlines when plaintiffs are misled about their rights or have other good reason for missing a filing deadline. The principle likely works in Massachusetts just as it does in federal court. In the Commonwealth, unpaid overtime and other wages are automatically tripled, a fact that substantially raises the stakes for employers. The lesson from Figueroa, then, is clear: all employers should be sure to post required notices regarding wage payments, discrimination, and other employment matters as required by state as well as federal law.