What Happens if a Claim is Filed Against My Company?

What Happens if a Claim is Filed Against My Company?

 

Notice of Claim

 

If an employee files a wage claim against your company, you will first be sent a Notice of Claim letter with an enclosed copy of the wage claim (see “Claim for Wages” document).  The letter is to inform you of the claim against you and will describe the Statutes and Administrative Codes that the claimant (employee) is alleging you violated.  The enclosed claim form is filled out by the claimant and will outline the hours worked and amount that is owed.  It also allows for the claimant to give a brief description of why they are filing the claim.  The claimant is also required to fill out an attachment to the claim form that explains how the amount was calculated.  There is a different attachment depending on how the claimant is paid, i.e. hourly, piecework, commission.  Many times, the amount owed is inaccurate as many claimants are filling the form out by memory and do not have the time records necessary to determine an accurate number.  If the amount of the claim is inaccurate based on your records, you may include a check in the amount that you believe to be owed, plus penalties.  Checks for both wages and penalties are to be made out in the name of the claimant.

 

The Notice of Claim letter will also describe the penalties pertaining to the violation.  NRS 608.040 states that if an employer fails to pay an employee by the time frames described in the statute, the employer must continue to pay the employee at the same rate until they are paid in full.  This period cannot exceed 30 days.  This means that the maximum penalty for an employee who earns $8.25 per hour would be calculated as follows: $8.25 x 8 hours = $66.00 (daily rate) x 30 days = $1,980.00.  The penalty is not based on the amount of wages due, but the claimant’s rate of pay.  Please keep in mind that even if the claimant has been paid their wages, penalties may still be owed if the wages were paid late.

 

Generally, penalties are reduced to 25% of the maximum penalty at the Notice of Claim stage.  Therefore, if there is a violation, it is easier to settle the claim at this point to avoid maximum penalties.

 

If you disagree with what the claimant is alleging, you will be asked to respond with supporting documentation.  Examples of supporting documentation include, but are not limited to, time and attendance records, check stubs, and employment contracts.

 

Under Investigation

 

Once the employer’s, or respondent’s, response is received, the information is either mailed to the claimant for a rebuttal, or a meeting will be scheduled for the investigator to discuss the claim in further detail with both parties.  Most meetings end in a settlement.  Penalties at this stage are reduced to 50% of the maximum penalty.

 

Determination/Dismissal

 

If a settlement cannot be reached between the claimant and the respondent a determination will be issued.  Penalties at this stage are reduced to 75% of the maximum penalty.  If it is determined that the claimant is due wages, the respondent must pay the wages and penalties by the date on the determination.

 

Final Order

 

If payment is not received, a final order will be issued.  The respondent will be responsible for the maximum penalty at this stage.  The order will be filed with the appropriate court and a letter will be sent to both parties. If the respondent still fails to pay, the debt is referred to collections..

 

Appeal Rights

 

The respondent will also have the right to object to the determination by the deadline on the letter.  If the respondent objects in a timely manner, a pre-hearing conference will be scheduled with the Labor Commissioner.  Both parties must appear for this meeting and the facts of the case will be discussed.  A formal hearing will also be scheduled.

 

Hearing

 

A formal hearing will be held with the Labor Commissioner and each party may explain their arguments.  The Labor Commissioner will make a final decision on the case.