Paying Wages is Mandatory!

Even for lawyers! The Indiana Court of Appeals ruled such in Topolski v. Egan, 47 N.E.3d 1259 (2015). The lawyer did not pay his legal assistant every week the agreed-upon salary. The appellate court affirmed the trial court's findings on (1) the amount of money due, which was a disputed fact, and (2), that the liquidated damages portion of the statute was mandatory.

It sounds as if the lawyer had a temporary cash flow problem, rendering him genuinely unable to pay wages. However, the lesson from this case is that an employer in such a situation must pay these wages; borrowing at a relatively high interest rate to cover these will be far cheaper than incurring the liquidated damages and attorney's fee provisions of the Wage Payment & Wage Claim Acts.

HOWEVER, note that the General Assembly has amended the statute mandating liquidated damages effective 1 July 2016, now requiring the court to find that the employer did not act in good faith in not paying the wages. Since this amendment is new there is no case interpreting it, but it is unlikely that a court would find a simple failure to pay due to cash flow issues as good faith. Employees have cash flow issues as well.