Pennsylvania Wage Payment and Collection Law

The Wage Payment and Collection Law, 43 Pa C. S. §260.1 (WPCL), is a Pennsylvania employment law that provides a means by which employees are able to recover unpaid wages from their employers. The WPCL was enacted to provide a vehicle for employees to enforce payment of their wages and compensation held by their employers. The underlying purpose of the WPCL is to remove some of the obstacles employees face in litigation by providing employees with a legal remedy when an employer breaches its contractual obligation to pay wages. The WPCL does not create an employee’s substantive right to compensation; rather, it only establishes an employee’s right to enforce payment of wages and compensation to which an employee is otherwise entitled by the terms of an agreement which can be oral or written. In many cases the agreement consists of nothing more than an oral employment agreement to perform work for the employer for a certain salary or rate of pay.

Wages are defined as all earnings of an employee, regardless of whether determined on a time, task, piece, commission or other method of calculation. The law also provides that fringe benefits or wage supplements are included within the definition of wages. Fringe benefits include separation pay; unpaid vacation, holiday, or guaranteed pay; and any other amount to be paid pursuant to an agreement to the employee, or for the benefit of the employee.

The WPCL defines the term “employer” broadly. “Employer” includes every person, firm, partnership, association, corporation, receiver or other officer of a court and any agent or officer. Evidence of status as a corporate officer or shareholder and of check-writing authority may be relevant in determining a party’s status as an employer under the WPCL. However, to be considered an “employer” under the WPCL, there must be evidence that the agent or officer played an active role in decision making, or corporate policy-making, such as corporate decision-making or corporate advisement on matters of pay or compensation.

The WPCL provides no official definition of the term “employee.” While the WPCL applies only to employees and not to independent contractors, the fact that an employer classifies an individual as an independent contractor is not determinative, as employers frequently misclassify individuals whom the law deems as employees, as independent contractors. In determining whether an individual is an employee or independent contractor under the WPCL, courts looks to the following factors: the control of the manner that work is to be performed; responsibility for results; terms of any agreement between the parties; the nature of the work or occupation; the skill required for performance of the work; whether the individual performing the work is engaged in a distinct occupation or business; which party supplies the tools or equipment to perform the work; whether payment is made by the amount of time worked or by the job; whether the work is part of the regular business of the employer; and the right to terminate the employment at any time.

The WPCL provides that whenever an employer separates an employee from the payroll, or whenever an employee quits or resigns employment, the wages or compensation earned are due and payable no later than the next regular payday of the employer on which wages would otherwise be due and payable. If there is a dispute over wages, the employer is required to provide written notice to the employee of the amount of wages which the employer concedes to be due and must pay such amount without condition within the time set by the law. Acceptance of any payment by the employee does not constitute a release as to any disputed amount.

The WPCL permits any employee or group of employees, to whom any type of wages is payable, to bring a lawsuit to recover unpaid wages, costs and reasonable attorneys’ fees. In addition, where wages remain unpaid for 30 days beyond the regularly scheduled payday, or, in the case where there is no regularly scheduled payday, for sixty 60 days beyond the date of the agreement, award or other act making wages payable and there is no good faith contest or dispute of any wage claim, the employee shall also be entitled to liquidated damages an amount equal to an additional 25% of the total amount of wages due, or $500, whichever is greater.

We often successfully use the Wage Payment and Collection Law to recover unpaid wages and benefits for employees who are terminated by their employers and not paid what the employees earned. This may include the recovery of unpaid wages, earned commissions and bonuses, earned but not used vacation or PTO (paid time off) and reimbursement for expenses which an employer refuses to pay. Call Abramson Employment Law at 267-470-4742 or contact us online to discuss your legal options for any claim for unpaid wages and benefits under the Pennsylvania Wage Payment and Collection Law.

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