How best to collect back pay with damages?

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How best to collect back pay with damages?

My former employer has owed me money for a couple of months now, plus a partial payment from last year. I sent a demand letter with the terms for the use of my money if not paid by a certain time – 2% interest per day until paid. Is this legal on my part and how can I recover my unpaid salary with the damages I’m incurring? The reason I resigned my position is because often they could not make payroll but the CEO and VP are away going on ski trips a cruises.

Asked on April 7, 2012 under Employment Labor Law, Texas

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

You must be paid for all the time you worked up through when you quit or resigned; there are no legal grounds for not paying you your salary or wages. If they will not pay voluntarily, you could sue them for the money; depending on how much is owed, you may wish to sue in small claims court, where you can act as your own attorney, thereby saving on legal fees (also, small claims cases tend to move faster, leading to quicker resolutions).

You may not however recover 2% interest per day--or any interest. Interest is only recoverable if there was some agreement in place (e.g. a contract) stating that in the event of late or nonpayment, you would be owed interest. Otherwise, you have no legal basis for  the claim--you may only recover the actual wages owed. (Besides--2% interest per day would be usury, or a criminally high level of interest, beyond that permitted by law, as well as being completely unwarranted, even if it were legal, at time when mortgages go for 4% per year.)


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