If a company fails to pay an employee, the usual reasons are that it believes the employee did not perform the work to justify the pay or that it is experiencing financial difficulties and is unable to pay.

An employee has certain rights, if he or she believes he or she is not being compensated fairly. The employee can file a claim against the employer with the U.S. Department of Labor. The department may investigate, and if it rules in the employee’s favor, it will send a letter to the employer demanding that the employee be paid.

What happens if the employer fails to pay in a specified amount of time? A lawyer can file a lawsuit against the employer for unpaid wages under the Fair Labor Standards Act. This law, which requires all employers to pay employees a minimum wage plus overtime for any hours worked over 40 per week, includes a provision that enables an employee to recover attorney's fees. The act covers nonexempt employees, i.e., unskilled laborers, minors and those who work by the hour. Exempt employees, who are not covered by the act, include professionals, skilled workers, volunteers, independent contractors, farm workers, mechanics, and computer programmers, among many other skilled workers.

Another option to filing a lawsuit is to file in small claims court if the amount is under $5,000. In small claims court, you often represent yourself. The filing and pre-trial procedures for small claims cases are simpler than in other types of cases. However, the court can order a judgment only for money. If the company goes into bankruptcy, you may still be able to collect the amount due to you. You can file a claim with the U.S. Bankruptcy Court. Wages have priority over other pending business debts. Be aware that the bankruptcy law, which affects consumers, will also make it tougher for businesses that file for bankruptcy protection.

Note: This information was prepared as a public service by the Illinois State Bar Association and is a joint project with the Illinois Press Association. Its purpose is to inform citizens of their legal rights and obligations.