Connecticut’s wage payment statutes, with the definition of wages found at Conn. Gen. Stat. 31-71a(3), certainly have left courts room to interpret the statute. After all, the definition of wages is merely:
compensation for labor or services rendered by an employee, whether the amount is determined on a time, task, piece, commission or other basis of calculation.
If an employer does not pay "wages" properly, an employee can bring a civil action to collect such wages (along with attorneys fees, and double damages) under Conn. Gen. Stat. 31-72.
But what happens when an employer does not pay accrued vacation or sign-on bonuses? Is that a failure to pay "wages"?
A recent Connecticut Superior Court case says "no". In Tamborino v. Velocity Express, 2008 Conn. Super. LEXIS 1527 (June 6, 2008)(Tierney, J.) (registration needed to download), the Superior Court concluded that the definition of wages did not include such items. Moreover, "wages" does not include post-termination COBRA insurance premiums. Thus, the employee could not use the "wage" statutes to claim that the employer’s failure to do so violated state law (and entitled him to attorneys fees for pursuing such a claim).
The case also discusses performance bonuses and says that in some cases, such bonuses may be "wages". In this case, however, the court found that the employer’s failure to pay such a bonus was not made in "bad faith" and declined to award the Plaintiff additional damages for such a failure.
For employers, the case is a reminder of the importance of using clear and plain language in offer letters and employment contracts. If bonuses are to be contingent on achievement of certain goals, or discretionary, language can be included to that effect.
As I indicated earlier this week in my post on "fairness", employees will become bitter if they believe that the employer is not living up to the terms of the "deal". Ensuring that offer letters give employers the flexibility to run their business while also outlining the essential terms of employment can be crucial to avoiding misunderstandings later on.
Photo courtesy of Library of Congress (Flickr) – Workers in 1940