Ind. SC: Day labor employee may proceed with suit under Wage Payment Act

By Jessica M. Karmasek | Mar 21, 2013

INDIANAPOLIS (Legal Newsline) -- The Indiana Supreme Court ruled last week that a day labor employee can proceed with a class action lawsuit against a Fort Wayne day labor service under the state's Wage Payment Act.

Plaintiff Brandy Walczak successfully applied for employment at defendant Labor Works, received job assignments and paychecks, and was never fired or laid off.

Nevertheless, when she filed a suit against Labor Works under the state's Wage Payment Act, Labor Works argued that day laborers like Walczak are involuntarily separated from the payroll at the end of every shift and thus required to proceed under the Wage Claims Act.

Labor Works' day labor employees are not required to report to work on any regular schedule. Rather, they receive job assignments on a day-to-day basis by coming into the office and signing up to work.

Assignments are not guaranteed, and if there is not enough available work, an employee may not receive an assignment even if he or she signed up for one.

In 1933, the Indiana General Assembly enacted the Wage Payment Act, which required all Indiana employers to "pay each employee... at least twice each month... all wages earned to a date not more than 10 days prior to the date of such payment."

The statute applied to current employees as well as to employees who, either "permanently or temporarily," "voluntarily leave [their] employment."

Violations of the statute were punishable by liquidated damages, and employees who brought lawsuits to vindicate their claims could recover attorney's fees.

Six years later, the legislature created a similar remedy for employees who had been "separate[d]... from the payroll" or whose work had been "suspen[ded]... as the result of an industrial dispute."

The Wage Claims Act required all Indiana employers to remit all unpaid wages to the former employee "within 24 hours of the time of separation," or, "[i]n the event of the suspension of work, as the result of an industrial dispute," "at the next regular pay day."

Unlike the Wage Payment Act, the Wage Claims Act did not create a private right of action; rather, it created an administrative process.

Basically, the Wage Payment Act applies to those who keep or quit their jobs, while the Wage Claims Act applies to those who are fired, laid off or on strike.

In Walczak's case, the state's high court concluded she had a "reasonable expectation" of continuing to receive job assignments from Labor Works on the day she filed her claim.

"We hold she was not separated from the payroll for the purpose of the Wage Claims Act and may proceed with her claim as she filed it, under the Wage Payment Act," Justice Mark Massa wrote for the court, reversing the Allen County Superior Court's dismissal of Walczak's claim and remanding the case.

Massa continued in the court's March 13 opinion, "Ultimately, we believe the drafters of the Wage Payment Act intended the statute to benefit the entire Indiana workforce, including day labor employees. Day labor is not a newcomer to Indiana's economy, and the drafters of the Wage Payment and Wage Claims acts were likely aware of its role in the state's employment landscape.

"Therefore, day labor employees are no less entitled to the statutory protections that the General Assembly has provided than any other Hoosier employees."

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

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