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Limits to Enhanced Damages under Maryland’s Wage Law: Peters v. Early Healthcare Giver, Inc. (2014)

Maryland employers are particularly wary of employee wage claims because Maryland’s Wage Payment and Collection Law (“WPCL”) provides for enhanced damages (i.e., three times the amount of withheld wages) and attorney’s fees to a prevailing plaintiff in certain situations. However, the Maryland Court of Appeals has recently placed restrictions on a plaintiff’s right to enhanced damages.  Specifically, the Court stated that, before a trial court can grant enhanced damages, it is required to make an explicit determination as to whether an employee’s wages were withheld by the employer pursuant to a bona fide dispute. This finding is related to, yet still separate from the trial court’s initial determination that an employee is owed wages.  Moreover, an employee is not automatically entitled to an award of enhanced damages, even if the trial court concludes that an employer withheld wages not pursuant to a bona fide dispute. Finally, the Court refused to accept the argument that enhanced damages should be added to the award of withheld wages, which could effectively create a final judgment that is four times the withheld wages. The Court explained that the plain language of the WPCL establishes that the total award available to an employee is three times the withheld wage.

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