Which Applies? The Wage Claims Statute or the Wage Payment Statute?

January 21, 2011

On January 21, 2011, the Indiana Court of Appeals issued yet another decision dealing with the Wage Payment Statute (other recent decisions dealing with this statute are covered here and here) in Hollis v. Defender Security Co., 941 N.E.2d 536 (Ind. Ct. App. 2011), Case No. 49A02-1004-PL-46. This decision clarified what claims are to be brought under I.C. Chapter 22-2-5, the Wage Payment Statute, as opposed to I.C. Chapter 22-2-9, the Wage Claims Statute.

The Wage Payment Statute governs the time within which employers must pay wages to their employees. In contrast, the Wage Claims Statute concerns disputes over the amount of wages. Claims under the Wage Claims Statute must be filed with the Department of Labor.

The plaintiff was employed by the defendant in sales and, in 2009, was involuntarily separated from their employment. The plaintiff filed a complaint against his former employer, alleging violations of the Wage Payment Statute. The employer moved to dismiss the action pursuant to Trial Rule 12(B)(1), asserting that the claim was actually under the Wage Claim Statute and, therefore, the plaintiff was required to submit his claim to the Department of Labor. The trial court granted that motion.

On appeal, the plaintiff argued that the Wage Payment Statute, rather than the Wage Claim Statute, applied to his action, and the plaintiff argued that whether to proceed under the Wage Payment Statute or the Wage Claims Statute depends on an employee’s status when the claim accrues as opposed to the employee’s status when he or she files the claim. The Court disagreed with the plaintiff.

This decision is yet another loss in at least one lawyer’s attempt to broaden the scope of the Wage Payment Statute (all three of the recently decided cases were brought by the same attorney). As a practical matter, this demonstrates that it will be difficult to extend the applicability of this remedy much beyond the grounds described in these cases.

Lessons:

1. A claim under the Wage Claims Statute must be filed in the Department of Labor, not in a court.
2. An employee who was involuntarily terminated must use the Wage Claim Statute, rather than the Wage Payment Statute.
3. The employee’s status at the time he files the claim is the relevant inquiry for deciding whether the Wage Payment Statute or Wage Claims Statute applies.